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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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2018
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Notice of
Annual General Meeting
of Shareholders and Proxy Statement
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1.
|
By separate resolutions, to elect as Directors for a period of one year, expiring at the end of the Company’s Annual General Meeting of Shareholders in
2019
, the following individuals:
|
(a)
|
David R. Carlucci
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(e)
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JoAnn A. Reed
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(i)
|
Kneeland C. Youngblood, M.D.
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(b)
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J. Martin Carroll
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(f)
|
Angus C. Russell
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(j)
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Joseph A. Zaccagnino
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(c)
|
Paul R. Carter
|
(g)
|
Mark C. Trudeau
|
|
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(d)
|
David Y. Norton
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(h)
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Anne C. Whitaker
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|
|
2.
|
To hold an advisory non-binding vote to approve the re-appointment of Deloitte & Touche LLP as the independent auditors of the Company and, by binding vote, to authorize the Audit Committee of the Board of Directors (also referred to in this Proxy Statement as the Board)
to set the independent auditors’ remuneration.
|
3.
|
To hold an advisory vote to approve the Company’s executive compensation.
|
4.
|
To approve the Amended and Restated Mallinckrodt Pharmaceuticals Stock and Incentive Plan.
|
5.
|
To approve the Board’s authority to issue shares.
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6.
|
To approve the waiver of pre-emption rights (Special Resolution).
|
7.
|
To authorize the Company and/or any subsidiary of the Company to make market purchases or overseas market purchases of Company shares.
|
8.
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To authorize the price range at which the Company can re-allot shares that it holds as treasury shares (Special Resolution).
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9.
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To act on such other business as may properly come before the meeting or any adjournment thereof.
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TABLE OF CONTENTS
|
Proxy Statement Summary
|
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General Information
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Questions and Answers about Proxy Materials, Voting, Attending the Meeting and Other General Information
|
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Corporate Governance
|
|
Corporate Governance Guidelines
|
|
Independence of Nominees for Director
|
|
Director Nominations Process
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|
Majority Vote for Election of Directors
|
|
Executive Sessions of the Board
|
|
Board Leadership Structure
|
|
Code of Ethics
|
|
Board Risk Oversight
|
|
Compensation Risk Assessment
|
|
Transactions with Related Persons
|
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Communications with the Board of Directors
|
|
Board of Directors and Board Committees
|
|
General
|
|
Board Committees
|
|
Compensation of Non-Employee Directors
|
|
Compensation of Executive Officers
|
|
Compensation Discussion and Analysis
|
|
Compensation Committee Report on Executive Compensation
|
|
Executive Compensation Tables
|
|
Security Ownership and Reporting
|
|
Security Ownership of Management and Certain Beneficial Owners
|
|
Section 16(a) Beneficial Ownership Reporting Compliance
|
|
Audit and Audit Committee Matters
|
|
Audit and Non-Audit Fees
|
|
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
|
|
Audit Committee Report
|
|
Equity Compensation Plan Information
|
|
Proposals Requiring Your Vote
|
|
Proposals 1(a) through 1(j): Election of Directors
|
|
Proposal 2: Advisory Non-Binding Vote to Approve the Re-Appointment of the Independent Auditors and a Binding Vote to Authorize the Audit Committee to Set Their Remuneration
|
|
Proposal 3: Advisory Vote to Approve Executive Compensation
|
|
Proposal 4: Approve the Amended and Restated Mallinckrodt Pharmaceuticals Stock and Incentive Plan
|
|
Proposal 5: Approve the Board’s Authority to Issue Shares
|
|
Proposal 6: Approve the Waiver of Pre-emption Rights
|
|
Proposal 7: Authorize the Company and/or any Subsidiary of the Company to Make Market Purchases or Overseas Market Purchases of Company Shares
|
|
Proposal 8: Authorize the Price Range at Which the Company can Re-Allot Shares That It Holds As Treasury Shares
|
Other Matters
|
|
Presentation of Irish Statutory Accounts
|
|
Registered and Principal Executive Offices
|
|
Shareholder Proposals for the 2019 Annual General Meeting
|
|
United States Securities and Exchange Commission Reports
|
|
Delivery of Documents to Shareholders Sharing an Address
|
|
General
|
|
Appendix A
|
|
|
|
|
|
PROXY STATEMENT SUMMARY
|
PROXY STATEMENT SUMMARY
|
•
|
Date and Time:
May 16, 2018
, at 9:30 a.m., local time
|
•
|
Place:
Sofitel London Heathrow Hotel, Terminal 5, London Heathrow Airport, London TW6 2GD, United Kingdom
. Shareholders in Ireland may participate in the Annual General Meeting by audio link at the offices of Arthur Cox, Earlsfort Centre, Dublin 2, Ireland.
|
•
|
Record Date:
March 12, 2018
|
•
|
Voting:
If you owned Mallinckrodt ordinary shares at the close of business on the record date, then you may vote at the Annual General Meeting by following the procedures outlined in this Proxy Statement. Each ordinary share is entitled to one vote on each matter properly brought before the Annual General Meeting.
|
•
|
Ordinary Shares Outstanding as of Record Date:
86,387,326
|
•
|
Transfer Agent:
Computershare Inc. (“Computershare”)
|
•
|
Place of Incorporation:
Ireland
|
|
Proposal
|
|
Our Board’s Recommendation
|
1.
|
Elect directors (page
56
)
|
|
FOR each nominee
|
2.
|
Advisory non-binding vote to approve the re-appointment of the independent auditors and binding vote to authorize the Audit Committee of the Board to set the independent auditors’ remuneration (page
59
)
|
|
FOR
|
3.
|
Advisory vote to approve executive compensation (page
60
)
|
|
FOR
|
4.
|
Approval of the Amended and Restated Mallinckrodt Pharmaceuticals Stock and Incentive Plan (page
61
)
|
|
FOR
|
5.
|
Approval of the Board’s authority to issue shares (page
71
)
|
|
FOR
|
6.
|
Approval of waiver of pre-emption rights (Special Resolution) (page
72
)
|
|
FOR
|
7.
|
Authorization to make market purchases or overseas market purchases of Company Shares (page
73
)
|
|
FOR
|
8.
|
Authorization of the price range at which the Company can re-allot shares held as treasury shares (Special Resolution) (page
74
)
|
|
FOR
|
|
|
|
PROXY STATEMENT SUMMARY
|
|
|
Name
|
Age
|
Director Since
|
Principal Occupation
|
Committee
Memberships
|
Other Public Company Boards
|
David R. Carlucci*
|
63
|
2013
|
Former Chairman, Chief Executive Officer and President of IMS Health
|
Human Resources and Compensation (Chair)
|
1
|
J. Martin Carroll*
|
68
|
2013
|
Former President and Chief Executive Officer of Boehringer Ingelheim Corporation
|
Compliance (Chair); Nominating and Governance; Portfolio
|
2
|
Paul R. Carter*
|
57
|
Nominee
|
Former Executive Vice President, Commercial Operations of Gilead Sciences, Inc.
|
N/A - First time nominee
|
2
|
David Y. Norton*
|
66
|
2017
|
Former Company Group Chairman, Global Pharmaceuticals of Johnson & Johnson
|
Human Resources and Compensation; Portfolio
|
1
|
JoAnn A. Reed*
|
62
|
2013
|
Healthcare services consultant and former Senior Vice President, Finance and Chief Financial Officer of Medco Health Solutions
|
Audit (Chair)
|
2
|
Angus C. Russell*
|
62
|
2014
|
Former Chief Executive Officer of Shire plc
|
Portfolio (Chair); Audit
|
3
|
Mark C. Trudeau
|
56
|
2013
|
President and Chief Executive Officer of Mallinckrodt plc
|
|
1
|
Anne C. Whitaker*
|
50
|
Nominee
|
President and Chief Executive Officer of KNOW Bio, LLC
|
N/A - First time nominee
|
1
|
Kneeland C. Youngblood, M.D.*
|
62
|
2013
|
Founding Partner of Pharos Capital Group
|
Compliance; Nominating and Governance
|
2
|
Joseph A. Zaccagnino*
|
71
|
2013
|
Former President and Chief Executive Officer of Yale New Haven Health System
|
Nominating and Governance (Chair); Compliance
|
0
|
* Independent Director or Director Nominee
|
|
|
|
|
GENERAL INFORMATION
|
GENERAL INFORMATION
Questions and Answers about Proxy Materials, Voting, Attending the Meeting and Other General Information
|
•
|
Our Notice of Internet Availability of Proxy Materials;
|
•
|
Our Annual Report on Form 10-K for the fiscal year ended
December 29, 2017
; and
|
•
|
Our Irish Statutory Accounts for the fifteen months ended
December 29, 2017
and the reports of the Directors and auditors thereon.
|
|
|
GENERAL INFORMATION
|
|
•
|
Indicate when voting by internet or by telephone that you wish to vote as recommended by our Board of Directors; or
|
•
|
If you sign and return a proxy card without giving specific voting instructions,
|
|
|
|
GENERAL INFORMATION
|
•
|
Are present and vote in person at the meeting;
|
•
|
Have voted by internet or by telephone; or
|
•
|
Have submitted a proxy card or voting instruction form by mail.
|
|
Proposal
|
|
Vote Required
|
1.
|
Elect directors
|
|
Majority of votes cast
|
2.
|
Advisory non-binding vote to approve the re-appointment of the independent auditors and binding vote to authorize the Audit Committee of the Board to set the independent auditors’ remuneration
|
|
Majority of votes cast
|
3.
|
Advisory vote to approve executive compensation
|
|
Majority of votes cast
|
4.
|
Approve the Amended and Restated Mallinckrodt Pharmaceuticals Stock and Incentive Plan
|
|
Majority of votes cast
|
5.
|
Approve the Board’s authority to issue ordinary shares
|
|
Majority of votes cast
|
6.
|
Approve the waiver of pre-emption rights (Special Resolution)
|
|
75% of votes cast
|
7.
|
Authorization to make market purchases or overseas market purchases of Company shares
|
|
Majority of votes cast
|
8.
|
Authorization of the price range at which the Company can re-allot shares held as treasury shares (Special Resolution)
|
|
75% of votes cast
|
|
|
GENERAL INFORMATION
|
|
|
|
|
GENERAL INFORMATION
|
|
|
CORPORATE GOVERNANCE
|
|
CORPORATE GOVERNANCE
|
•
|
Director responsibilities;
|
•
|
Composition and selection of the Board, including qualification standards and independence guidelines;
|
•
|
Majority voting for directors;
|
•
|
The role of the Chairman of the Board or of an independent Lead Director;
|
•
|
Board committee establishment, structure and guidelines;
|
•
|
Officer and director share ownership requirements;
|
•
|
Meetings of non-employee directors;
|
•
|
Director orientation and continuing education;
|
•
|
Board access to management and independent advisors;
|
•
|
Communication with directors;
|
•
|
Board and committee self-evaluations;
|
•
|
Succession planning and management development reviews;
|
•
|
CEO performance reviews;
|
•
|
Recoupment, or “clawback”, of executive compensation; and
|
•
|
Ethics and conflicts of interest.
|
|
|
|
CORPORATE GOVERNANCE
|
•
|
Is, or has been within the prior three years, an employee of Mallinckrodt or any of its subsidiaries;
|
•
|
Has an immediate family member who is, or has been within the prior three years, an executive officer of Mallinckrodt;
|
•
|
Is a current partner or employee of our external auditor;
|
•
|
Has an immediate family member who is a current partner of our external auditor or who is an employee of our external auditor and personally works on our audit;
|
•
|
Has been, or has an immediate family member who has been, within the prior three years, a partner or employee of our external auditor who personally worked on our audit during that time;
|
•
|
Is, or has an immediate family member who is, or has been within the prior three years, employed as an executive officer of another company that has or had on the compensation committee of its board of directors one of our executive officers (during the same period of time);
|
•
|
Has, or has an immediate family member who has, received more than $120,000 in direct compensation from Mallinckrodt, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), in any 12-month period within the prior three years (compensation received by an immediate family member for service as an employee, other than as an executive officer, is not included for purposes of this determination);
|
•
|
Is a current employee, or has an immediate family member who is a current executive officer, of a company that does business with Mallinckrodt and has made payments to, or received payments from, Mallinckrodt for property or services in an amount that, in any of the prior three fiscal years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues; or
|
•
|
Is, or his or her spouse is, an executive officer, director or trustee of a charitable organization to which our contributions, not including our matching of charitable contributions by employees, exceed, in any single fiscal year within the prior three years, the greater of $1 million or 2% of such organization’s total charitable receipts during that year.
|
|
|
CORPORATE GOVERNANCE
|
|
•
|
Directors should be individuals of the highest ethical character and integrity;
|
•
|
Directors should have demonstrated management ability at senior levels in successful organizations, including as the chief executive officer of a public company or as the leader of a large, multifaceted organization, including government, educational and other non-profit organizations;
|
•
|
Each director should have the ability to provide wise, informed and thoughtful counsel to senior management on a range of issues and be able to express independent opinions, while at the same time working as a member of a team;
|
•
|
Directors should be free from any conflict of interest or business or personal relationship that would interfere with the duty of loyalty owed to us; and
|
•
|
Directors should be independent of any particular constituency and be able to represent all of our shareholders.
|
•
|
The name and address of the candidate;
|
•
|
A brief biographical description, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements set forth above; and
|
•
|
The candidate’s signed consent to serve as a director if elected and to be named in our Proxy Statement.
|
|
|
|
CORPORATE GOVERNANCE
|
|
|
CORPORATE GOVERNANCE
|
|
•
|
Our use of different types of compensation vehicles that provide a balance of long- and short-term incentives with fixed and variable components;
|
•
|
Our use of a variety of performance metrics, both absolute (e.g., adjusted earnings per share (“EPS”)) and relative to our peers (e.g., total shareholder return);
|
•
|
Our practice of looking beyond results-oriented performance in assessing the contributions of a particular executive;
|
•
|
Our share ownership requirements;
|
•
|
Our executive compensation clawback policy; and
|
•
|
The ability of the Human Resources and Compensation Committee to reduce incentive payouts if deemed appropriate.
|
|
|
|
CORPORATE GOVERNANCE
|
|
|
BOARD OF DIRECTORS AND BOARD COMMITTEES
|
|
BOARD OF DIRECTORS AND BOARD COMMITTEES
|
|
|
Audit
Committee
|
|
Human
Resources
and
Compensation
Committee
|
|
Nominating and
Governance
Committee
|
|
Compliance
Committee
|
|
Portfolio
Committee
|
Non-Employee Directors
|
|
|
|
|
|
|
|
|
|
|
Melvin D. Booth
|
|
|
|
|
|
|
|
|
|
|
David R. Carlucci
|
|
|
|
|
|
|
|
|
|
|
J. Martin Carroll
|
|
|
|
|
|
|
|
|
|
|
Diane H. Gulyas
|
|
|
|
|
|
|
|
|
|
|
David Y. Norton
|
|
|
|
|
|
|
|
|
|
|
JoAnn A. Reed
|
|
|
|
|
|
|
|
|
|
|
Angus C. Russell
|
|
|
|
|
|
|
|
|
|
|
Kneeland C. Youngblood, M.D.
|
|
|
|
|
|
|
|
|
|
|
Joseph A. Zaccagnino
|
|
|
|
|
|
|
|
|
|
|
Employee Director
|
||||||||||
Mark C. Trudeau
|
|
|
|
|
|
|
|
|
|
|
Number of Meetings Held in Transition Period
|
|
2
|
|
2
|
|
1
|
|
1
|
|
1
|
Number of Meetings Held in Fiscal 2017
|
|
11
|
|
4
|
|
5
|
|
4
|
|
8
|
|
|
|
|
|
Chairman of the Board
|
|
Chairperson
|
|
Member
|
|
|
|
BOARD OF DIRECTORS AND BOARD COMMITTEES
|
|
|
BOARD OF DIRECTORS AND BOARD COMMITTEES
|
|
|
|
|
COMPENSATION OF NON-EMPLOYEE DIRECTORS
|
COMPENSATION OF NON-EMPLOYEE DIRECTORS
|
|
|
COMPENSATION OF NON-EMPLOYEE DIRECTORS
|
|
Name
|
|
Period
|
|
Fees Earned or
Paid in Cash
($)
|
|
Stock
Awards
($)
(1)
|
|
All Other
Compensation
($)
(2)
|
|
Total
($)
|
||||
Melvin D. Booth
|
|
2017
|
|
160,000
|
|
|
407,000
|
|
|
3,000
|
|
|
570,000
|
|
|
|
Transition Period
|
|
40,000
|
|
|
73,750
|
|
|
—
|
|
|
113,750
|
|
David R. Carlucci
|
|
2017
|
|
120,000
|
|
|
295,000
|
|
|
—
|
|
|
415,000
|
|
|
|
Transition Period
|
|
30,000
|
|
|
73,750
|
|
|
—
|
|
|
103,750
|
|
J. Martin Carroll
|
|
2017
|
|
124,167
|
|
|
295,000
|
|
|
1,750
|
|
|
420,917
|
|
|
|
Transition Period
|
|
30,000
|
|
|
73,750
|
|
|
1,250
|
|
|
105,000
|
|
Diane H. Gulyas
|
|
2017
|
|
105,000
|
|
|
295,000
|
|
|
3,000
|
|
|
403,000
|
|
|
|
Transition Period
|
|
26,250
|
|
|
73,750
|
|
|
—
|
|
|
100,000
|
|
David Y. Norton
(3)
|
|
2017
|
|
30,522
|
|
|
193,179
|
|
|
—
|
|
|
223,701
|
|
|
|
Transition Period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
JoAnn A. Reed
|
|
2017
|
|
125,000
|
|
|
295,000
|
|
|
—
|
|
|
420,000
|
|
|
|
Transition Period
|
|
31,250
|
|
|
73,750
|
|
|
—
|
|
|
105,000
|
|
Angus C. Russell
|
|
2017
|
|
120,000
|
|
|
295,000
|
|
|
—
|
|
|
415,000
|
|
|
|
Transition Period
|
|
30,000
|
|
|
73,750
|
|
|
—
|
|
|
103,750
|
|
Virgil D. Thompson
(4)
|
|
2017
|
|
17,500
|
|
|
—
|
|
|
—
|
|
|
17,500
|
|
|
|
Transition Period
|
|
26,250
|
|
|
73,750
|
|
|
—
|
|
|
100,000
|
|
Kneeland C. Youngblood, M.D.
|
|
2017
|
|
110,000
|
|
|
295,000
|
|
|
—
|
|
|
405,000
|
|
|
|
Transition Period
|
|
27,500
|
|
|
73,750
|
|
|
—
|
|
|
101,250
|
|
Joseph A. Zaccagnino
|
|
2017
|
|
120,000
|
|
|
295,000
|
|
|
—
|
|
|
415,000
|
|
|
|
Transition Period
|
|
30,000
|
|
|
73,750
|
|
|
—
|
|
|
103,750
|
|
(1)
|
The amounts reported reflect the aggregate grant date fair value of restricted units granted in fiscal
2017
, calculated in accordance with Accounting Standards Codification 718. The grant date fair value does not necessarily correspond to the actual value that will be recognized by each director, which will likely vary based on a number of factors, including our financial performance, stock price fluctuations and applicable vesting. As of
December 29, 2017
, Mr. Booth had 7,896 unvested restricted units outstanding, Mr. Norton had 5,601 unvested restricted units outstanding and each other current director listed in the table above had 5,723 unvested restricted units outstanding.
|
(2)
|
Reflects Company match of directors’ charitable contributions pursuant to Mallinckrodt’s Matching Gift Program.
|
(3)
|
Mr. Norton was appointed to the Board on September 20, 2017.
|
(4)
|
Mr. Thompson retired from the Board on March 1, 2017.
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Mark C. Trudeau, President and Chief Executive Officer
.
|
•
|
Matthew K. Harbaugh, Executive Vice President and Chief Financial Officer
.
|
•
|
Steven Romano, M.D., Executive Vice President and Chief Scientific Officer.
|
•
|
Dr. Frank Scholz, Executive Vice President of Global Operations and President, Specialty Generics
.
|
•
|
Hugh M. O’Neill, Executive Vice President and President, Autoimmune and Rare Diseases
.
|
•
|
Net sales were $3.222 billion, compared with $3.381 billion in the prior year, representing a 4.7% decrease.
|
•
|
Income from continuing operations was $1.771.2 million, compared with $489.0 million in fiscal 2016.
|
•
|
Reduced interest-bearing deferred tax liabilities to $554 million from $1,801 million at December 30, 2016.
|
•
|
Diluted earnings per share from continuing operations were $18.09, compared with $4.39 in fiscal 2016.
|
•
|
Net cash provided by operating activities was $727.3 million, compared with $1,184.6 million in fiscal 2016.
|
•
|
Expanded our Specialty Brands business through the acquisitions of InfaCare Pharmaceutical Corporation, Ocera Therapeutics, Inc. and Sucampo Pharmaceuticals, Inc., including their commercial and developmental products MNK-6105 (OCR-002), AMITIZA
®
(lubiprostone), RESCULA
®
(unoprostone isopropyl ophthalmic solution) 0.15%, VTS-270 and CPP-1X/sulindac and the license of NeuroproteXeon Inc.’s investigational, pharmaceutical-grade xenon gas for inhalation therapy.
|
•
|
Completed the divestiture of our Nuclear Imaging and Intrathecal businesses and entered into an agreement to sell two of our hemostasis products. Further, we made preparations for and announced in early 2018 the commencement of a process to dispose a portion of our business which is referred to as “the Specialty Generics Disposal Group” to further our strategic evolution to being a brands-focused innovation-driven specialty pharmaceutical growth company.
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
ü
|
Align to a peer group that reflects our business model
|
ü
|
Engage Independent and expert compensation committee consultants
|
ü
|
Ensure the majority of compensation is at risk and paid on performance
|
ü
|
Link a substantial portion of total executive compensation to performance and shareholder value creation
|
ü
|
Establish challenging threshold performance goals and maximum performance goals that reflect stretch levels of performance
|
ü
|
Cap annual cash incentive and long-term performance unit payouts for corporate performance measures at 200% of the target award
|
ü
|
Allow for little overlap in performance metrics between annual and long-term incentives, with the exception of revenue which is key strategic focus for the company
|
ü
|
Include both relative and absolute performance metrics in our long-term performance units program
|
ü
|
Provide minimum vesting of three years on equity awards for executives
|
ü
|
Require robust stock ownership guidelines with retention requirement
|
ü
|
Require termination of employment in addition to a change in control for accelerated equity vesting (double trigger)
|
ü
|
Require non-competition, non-solicitation and confidentiality agreement for eligibility in severance and change in control plans
|
ü
|
Ensure freedom for Human Resources and Compensation Committee (“HRCC”) discretion to apply negative adjustments to incentive awards
|
ü
|
Have an executive compensation clawback policy that allows us to recover performance-based cash and equity incentive compensation paid to executives in various circumstances, including for misconduct
|
ü
|
Review annually our compensation programs and policies to ensure they do not encourage excessive risk-taking
|
ü
|
Conduct annual “say-on-pay” advisory votes
|
û
|
Enter into long-term employment contracts with our executive officers (except as required outside the United States)
|
û
|
Provide excessive executive perquisites
|
û
|
Reprice or exchange equity awards without shareholder approval
|
û
|
Allow hedging and pledging of company securities
|
û
|
Provide change of control excise tax gross-ups
|
û
|
Provide any other tax gross-ups to our executives, with the exception of relocation expenses, limited business-related benefits or in connection with expatriate / international assignments
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Compensation should strongly align the interests of executive officers with those of patients, employees and shareholders;
|
•
|
Compensation policies and practices should support effective governance;
|
•
|
Compensation should align management with the long-term financial interests of shareholders through the use of stock-based compensation and executive stock ownership;
|
•
|
The focus should be on total compensation opportunity (base salary, annual incentive compensation and long-term incentive compensation) with an explicit role for each element;
|
•
|
Compensation should be competitive, but not excessive, in order to attract and retain talented executive officers who can achieve our long-term strategic goals and create shareholder value;
|
•
|
Compensation earned should be aligned with company performance and investor returns;
|
•
|
Compensation should reward corporate, group and individual performance to encourage collaboration and collective interests, while rewarding key contributors;
|
•
|
Compensation should support our business strategy in the areas of patient focus, customer focus, globalization, operational excellence and innovation, as well as our talent strategy;
|
•
|
The reward elements should be balanced, with an emphasis on performance-based compensation;
|
•
|
Compensation goals and practices should be transparent and easy to communicate, both internally and externally;
|
•
|
Goal setting is a key activity and should be conducted in a rigorous manner resulting in targets that reflect stretch, yet achievable, levels of performance; and
|
•
|
Pay programs and oversight of these programs should avoid excessive compensation risk that could adversely impact the Company.
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
Element
|
Key Features
|
Objective
|
Base salary
|
Fixed cash compensation
|
Offer a stable income, intended to reflect the market value of the executive’s role, with differentiation for strategic significance, individual capability and experience
|
Annual incentive compensation
|
Market-competitive, performance-based cash bonus opportunity tied to achievement of Company and individual goals
Initial calculation for each executive’s annual cash incentive is based on performance versus pre-determined goals tied to financial performance measures. In addition, each executive’s individual performance can modify the amount received |
Focus executives on pre-set patient, employee and shareholder value objectives each year and drive specific behaviors that foster short- and long-term growth and profitability
|
Long-term incentive compensation
|
Awards of stock options, restricted units and performance units
Stock options generally have ten-year terms and vest in four equal installments on each anniversary of the grant date
Restricted units generally vest in four equal installments on each anniversary of the grant date. Each unit is converted into one ordinary share at vesting
Performance units may be earned from 0% to 200% of the target number of units, based on performance over a three-year performance period. For the fiscal 2017-2019 performance period, half of the performance units are based on our adjusted Net Revenue Compound Annual Growth Rate, while the other half are based on our relative total shareholder return versus a Total Shareholder Return (TSR) performance peer group, in each case over the performance period. To the extent earned, performance units are delivered as ordinary shares after the end of the performance period.
|
Align the interests of executives with the interests of shareholders in long-term growth and stock performance, reward executives for the achievement of multi-year performance objectives and shareholder value creation and promote retention
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Company, business unit and individual performance;
|
•
|
Market data on compensation opportunities of officers with similar responsibilities at comparable companies;
|
•
|
The officer’s current and future responsibilities and potential contribution to our performance;
|
•
|
Retention considerations; and
|
•
|
Compensation levels of our executives with similar levels of responsibility (“internal equity”).
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
Alexion Pharmaceuticals, Inc.
|
|
Endo International plc
|
|
Perrigo Company plc
|
Biogen Inc.
|
|
Impax Laboratories
|
|
Shire plc
|
BioMarin Pharmaceutical Inc.
|
|
Incyte Corp.
|
|
United Therapeutics Corporation
|
Celgene Corporation
|
|
Jazz Pharmaceuticals plc
|
|
Valeant Pharmaceuticals International, Inc.
|
CSL Limited
|
|
Medivation, Inc.*
|
|
Vertex Pharmaceuticals Incorporated
|
|
|
Mylan N.V.
|
|
|
Peer Companies Removed
|
|
Peer Companies Added
|
Celgene Corporation
1
|
|
Horizon Pharma plc
|
Biogen Inc.
1
|
|
Regeneron Pharmaceuticals, Inc.
|
|
|
Zoetis Inc.
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
Measure
|
|
Weighting
|
|
Threshold
(50% Payout)
|
|
Target
(100%
Payout)
|
|
Maximum
(150%
Payout)
|
|
Trans.
Period
Results
|
|
Funding
|
|
Net Sales Revenue
(in millions)
|
|
100%
|
|
$753.7
|
|
$795.5-879.3
|
|
$921.2
|
|
$829.9
|
|
100
|
%
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Individual Annual
Incentive Target
|
|
×
|
|
Individual Funding based on Company Performance
|
|
×
|
|
Individual
Performance Multiplier (0 to 150%) |
|
=
|
|
Final 2017 Global
Bonus Plan Amount to CEO
|
Individual Annual
Incentive Target
|
|
×
|
|
Assess Achievement Against Performance Targets adjusted up or down (0-200% of target)
|
|
×
|
|
Individual
Performance
Multiplier
(0 to 150%)
|
|
=
|
|
Final 2017 Global
Bonus Plan Amount to Individual NEO
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
•
|
Adjusted EPS is defined as diluted earnings per share calculated in accordance with GAAP, as adjusted for certain items and their related tax effects. Adjusted EPS is an important measure because it provides a focus on profitable growth and expense control, and is viewed as a strong indicator of sustained performance over the long term.
|
•
|
Net sales revenue represents net sales calculated in accordance with GAAP, as adjusted for certain items. Net sales revenue is an important measure because it is a leading indicator of performance and value creation and provides a clear focus on top-line growth.
|
•
|
Free cash flow is defined as cash flow from operating activities less net capital expenditures, both calculated in accordance with GAAP, as adjusted for the impacts to operating cash flows from certain items. Free cash flow is an important measure because it provides focus on generating cash to fund operations and research, focuses executives on expense control and is expected to lead to long-term shareholder value creation.
|
•
|
Operating income is defined as operating income calculated in accordance with GAAP, as adjusted for certain items and their related tax effects. Operating income is an important measure because it provides a focus on profitable performance, appropriate investment and judicious expense control, and is viewed as a strong indicator of the strength of the business during uncertain market conditions.
|
•
|
Net sales revenue represents net sales calculated in accordance with GAAP, as adjusted for certain items. Net sales revenue is an important measure because it is a leading indicator of performance and value creation and provides a clear focus on top-line performance.
|
Measure
|
|
Weighting
|
|
Threshold
(50% Payout)
|
|
Target
(100%
Payout)
|
|
Maximum
(200%
Payout)
|
|
Fiscal
2017
Results
(1)
|
|
Weighted
Average Funding |
|
Adjusted EPS
|
|
50%
|
|
$7.11
|
|
$7.65
|
|
$8.18
|
|
$7.49
|
|
85.0
|
%
|
Net Sales Revenue
(in millions) |
|
30%
|
|
$3,135
|
|
$3,300
|
|
$3,465
|
|
$3,225
|
|
77.0
|
%
|
Free Cash Flow
(in millions) |
|
20%
|
|
$692
|
|
$714
|
|
$739
|
|
$543
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66.0
|
%
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
(1)
|
The performance measures used for compensation purposes include non-GAAP financial measures which exclude the effects of certain items which the HRCC believes do not represent ongoing operating results and/or business trends. The categories of these items include: restructuring and related charges, net; amortization and impairment charges; discontinued operations; acquisition-related expenses; changes in fair value of contingent consideration obligations; inventory step-up expenses; pension settlement charges; recurrent cash tax payments to the IRS associated with internal installment sales transactions; and other items identified by the company. In addition, these measures are calculated using the share count, tax rate and foreign exchange rates used in our fiscal year
2017
budget. In calculating fiscal 2017 results, the HRCC also excluded certain costs incurred in connection with actions taken as part of our ongoing transformation to become an innovation-driven specialty pharmaceuticals growth company.
|
•
|
Maximize growth;
|
•
|
Transform the portfolio;
|
•
|
Drive Value; and
|
•
|
Build a patient and customer centric high-performing organization.
|
Full Year Results
|
||
Strategic Imperatives
|
Fiscal 2017 Imperatives
|
Results
|
Maximize Growth
|
Achieve or exceed net sales target
Achieve or exceed branded net sales of 75% of total revenue
Accelerate patient access to key products
|
Overall rating - Partially Achieved:
•
Below targeted net sales goal
•
Achieved portfolio mix objective
•
Behind patient access target
|
Transform the Portfolio
|
Accelerate BD&L
Progress development and life cycle programs
Strengthen evidence generation and dissemination
|
Overall rating - Achieved
•
Expanded pipeline through completed M&A transactions
•
Completed divestiture of legacy and non-core businesses
•
Announced other accretive acquisition and divestiture of non-core assets
•
Achieved key portfolio development milestones
•
Generated over 130 scientific and HEOR studies
|
Drive Value
|
Achieve or exceed SG&A and operating efficiency targets
Maximize portfolio durability and competitive position
Optimize Specialty Generics performance
|
Overall rating - Partially Achieved
•
Year over year SG&A spend reduction
•
Unfavorable Inomax patent ruling
•
Successful Specialty Generics optimization
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
Build a Patient and Customer-Centric High Performing Organization
|
Enhance customer centricity
Strengthen competitive capabilities
Build compelling employee value proposition and operationalize footprint
|
Overall rating - Achieved
•
Completed Customer Centricity baseline survey
•
Enhanced clinical, medical and commercial capabilities
•
Completed organizational footprint transformation
•
Further enhanced employee engagement
•
National recognition for inclusion and diversity programs
|
NEO
|
Individual Goal Achievement
|
Matthew Harbaugh
|
•
Tax restructuring delivering significant value
•
Leadership of SAP implementation
|
Steven Romano, M.D.
|
•
Achieved key portfolio development milestones relating to Terlipressin, Acthar and Stratagraft
•
Achieved 20 key portfolio Life Cycle Management milestones
•
Generated 130 scientific and Health Economic studies
•
Recruited key talent and added critical capabilities
|
Dr. Frank Scholz
|
•
Exceeded revenue and operating income objectives
•
Established specialty generics as a stand-alone business
•
Improved generics R&D pipeline
•
Recruited certain key talent to the generics and brands organizations
•
Achieved key milestones in biologics modernization program
|
Hugh O’Neill
|
•
Recruited key talent and added critical commercial capabilities
•
Slower than planned patient access improvement
•
Decline in Acthar revenue
|
|
Target and Performance Multiplier
|
|
Individual Modifier
|
|
Final 2017
Global
Bonus Plan
Payout
|
||||
|
Target Bonus
Opportunity
|
x
|
Multiplier
|
=
|
Preliminary
Payout
|
x
|
Multiplier
|
|
|
Mark Trudeau
|
$1,312,500
|
x
|
66%
|
=
|
$866,250
|
x
|
100%
|
=
|
$866,250
|
Matthew Harbaugh
|
$399,000
|
|
66%
|
|
$263,340
|
|
115%
|
|
$302,800
|
Steven Romano, M.D.
|
$357,500
|
|
66%
|
|
$235,950
|
|
145%
|
|
$342,100
|
Dr. Frank Scholz
(1)
|
$357,500
|
|
117.2%
|
|
$418,990
|
|
115%
|
|
$481,800
|
Hugh O’Neill
|
$357,500
|
|
66%
|
|
$235,950
|
|
85%
|
|
$200,600
|
(1)
|
For Dr. Scholz, the performance multiplier of 117.2% reflects performance of 130.0% against the Specialty Generics performance measures (which were weighted at 80%) and performance of 66.0% against the corporate performance measures (which were weighted at 20%).
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
Annual Equity Grants
|
|
Grants to Reflect Transition Period
|
|
Special Performance Grants
|
|||||||||||||||||||||||||||
Name
|
|
Target Performance Units($)
|
|
Stock Options($)
|
|
Restricted Units($)
|
|
Total($)
|
|
Target Performance Units($)
|
|
Stock Options($)
|
|
Restricted Units($)
|
|
Total($)
|
|
Target Performance Units($)
|
|
Stock Options($)
|
|
Total($)
|
|||||||||||
Mark Trudeau
|
|
4,600,000
|
|
|
4,600,000
|
|
|
2,300,000
|
|
|
11,500,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Matthew Harbaugh
|
|
1,100,000
|
|
|
1,100,000
|
|
|
550,000
|
|
|
2,750,000
|
|
|
275,200
|
|
|
275,200
|
|
|
137,600
|
|
|
688,000
|
|
|
1,167,500
|
|
|
1,167,500
|
|
|
2,335,000
|
|
Steven Romano, M.D.
|
|
880,000
|
|
|
880,000
|
|
|
440,000
|
|
|
2,200,000
|
|
|
220,000
|
|
|
220,000
|
|
|
110,000
|
|
|
550,000
|
|
|
1,100,000
|
|
|
1,100,000
|
|
|
2,200,000
|
|
Dr. Frank Scholz
|
|
800,000
|
|
|
800,000
|
|
|
400,000
|
|
|
2,000,000
|
|
|
200,000
|
|
|
200,000
|
|
|
100,000
|
|
|
500,000
|
|
|
1,000,000
|
|
|
1,000,000
|
|
|
2,000,000
|
|
Hugh O'Neill
|
|
800,000
|
|
|
800,000
|
|
|
400,000
|
|
|
2,000,000
|
|
|
200,000
|
|
|
200,000
|
|
|
100,000
|
|
|
500,000
|
|
|
1,000,000
|
|
|
1,000,000
|
|
|
2,000,000
|
|
•
|
Net Revenue CAGR for the Company will be calculated for fiscal 2017 - fiscal 2019 (December 31, 2016 - December 27, 2019) using non-GAAP Net Sales Revenue where GAAP Net Sales Revenue has been adjusted to exclude the impact of both acquisitions and divestitures during the performance period.
|
•
|
Relative TSR means our total shareholder return as compared against a broad performance peer group of pharmaceutical and life sciences companies, listed below. This group of companies is broader than the peer group of companies used for competitive comparisons of executive compensation, and it includes some companies that are much larger or much smaller than Mallinckrodt. The HRCC believes that use of a larger comparison group for measuring our TSR better reflects our market performance against the broad industry, even though some of the companies in the performance group would not be reasonable comparators for the compensation peer group because of extreme differences in size. The HRCC periodically reviews the TSR peer group and approves changes, based on the recommendation of WTW. The relative TSR measure provides a “total picture” of our performance and will balance the achievement of
absolute
internal goals (Net Revenue CAGR) with
relative
performance against our peers in a measure that is directly linked with long-term shareholder value creation. The relative TSR peer group companies approved by the HRCC for the 2017 grants are:
|
Abbvie Inc.
|
|
Eli Lilly and Company
|
|
Novo Nordisk A/A
|
Actelion Ltd. *
|
|
Endo International plc
|
|
Opko Health, Inc.
|
Akorn, Inc. *
|
|
Genus plc
|
|
Orion Oyj
|
Alexion Pharmaceuticals
|
|
Gilead Sciences Inc.
|
|
Pacira Pharmaceuticals, Inc.
|
Alkermes plc
|
|
Hikma Pharmaceuticals plc
|
|
Perrigo Company plc
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
Allergan plc
|
|
Horizon Pharma plc
|
|
Philbro Animal Health Corporation
|
Almirall, S.A.
|
|
Impax Laboratories Inc.
|
|
Regeneron Pharmaceuticals Inc.
|
Amgen Inc.
|
|
Incyte Corporation
|
|
Sanofi
|
AstraZeneca plc
|
|
Indivior plc
|
|
Shire plc
|
Biogen Inc.
|
|
Intrexon Corporation
|
|
Swedish Ophan Biovitrum AB
|
BioMarin Pharmaceutical Inc.
|
|
Ionis Pharmaceuticals, Inc.
|
|
Taro Pharmaceutical Industries Ltd.
|
Boiron SA
|
|
Ipsen S.A.
|
|
Teva Pharmaceutical Industries Ltd.
|
Bristol-Myers Squibb
|
|
Jazz Pharmaceuticals plc
|
|
United Therapeutics Corporation
|
Catalent, Inc.
|
|
Merck & Co., Inc.
|
|
Valeant Pharmaceuticals Intl.
|
Celgene Corporation
|
|
Merck KGaA
|
|
Vertex Pharmaceuticals Inc.
|
Cepheid *
|
|
Mylan N.V.
|
|
Virbac SA
|
Depomed, Inc.
|
|
Myriad Genetics, Inc.
|
|
Zoetis, Inc.
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
|
Target
($)
|
|
Target Number of
Performance
Units (#)
|
|
Number of Stock
Options (#)
|
|
Number of
Restricted Units (#)
|
Mark Trudeau
|
|
11,500,000
|
|
76,681
|
|
249,785
|
|
44,462
|
Matthew Harbaugh
|
|
2,750,000
|
|
18,338
|
|
59,731
|
|
10,633
|
Steven Romano, M.D.
|
|
2,200,000
|
|
14,670
|
|
47,785
|
|
8,506
|
Dr. Frank Scholz
|
|
2,000,000
|
|
13,337
|
|
43,441
|
|
7,733
|
Hugh O’Neill
|
|
2,000,000
|
|
13,337
|
|
43,441
|
|
7,733
|
(1)
|
Adjusted EBITDA Margin represents net income before interest, income taxes, depreciation and amortization, adjusted to exclude certain items including discontinued operations; other income; net separation costs; restructuring charges; net immediately expensed up-front and milestone payments; acquisition related costs and non-cash impairment charges.
|
(1)
|
On the date of grant, the closing sales price per share of our ordinary shares as reported on the NYSE was $97.00.
|
(2)
|
On the date of vesting, the closing sales price per share of our ordinary shares as reported on the NYSE was $23.52.
|
(3)
|
Dr. Romano was not employed at the time the Fiscal 2015 Performance Share Awards were issued.
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
CEO
|
|
5 times base salary
|
Other Executive Officers
|
|
3 times base salary
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
Name and Principal Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
(1)
|
|
Option
Awards
($)
(1)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(2)
|
|
All Other
Compensation
($)
(3)
|
|
Total
($)
|
|||||||
Mark C. Trudeau
|
|
2017
|
|
1,050,000
|
|
|
—
|
|
|
7,813,805
|
|
|
4,600,016
|
|
|
866,250
|
|
|
696,639
|
|
|
15,026,710
|
|
President and
Chief Executive Officer |
|
Trans. Period
|
|
230,769
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
328,250
|
|
|
55,761
|
|
|
614,780
|
|
|
2016
|
|
1,038,461
|
|
|
—
|
|
|
5,876,436
|
|
|
3,900,004
|
|
|
1,587,500
|
|
|
245,065
|
|
|
12,647,466
|
|
|
|
|
2015
|
|
1,005,769
|
|
|
—
|
|
|
4,445,289
|
|
|
2,995,289
|
|
|
1,053,750
|
|
|
228,409
|
|
|
9,728,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Matthew K. Harbaugh
|
|
2017
|
|
570,000
|
|
|
—
|
|
|
3,731,411
|
|
|
2,542,720
|
|
|
302,800
|
|
|
56,262
|
|
|
7,203,193
|
|
Executive Vice President and Chief Financial Officer
|
|
Trans. Period
|
|
131,538
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99,800
|
|
|
12,909
|
|
|
244,247
|
|
2016
|
|
581,154
|
|
|
—
|
|
|
1,661,817
|
|
|
1,100,003
|
|
|
557,400
|
|
|
96,456
|
|
|
3,996,830
|
|
||
|
|
2015
|
|
533,462
|
|
|
—
|
|
|
1,064,059
|
|
|
716,946
|
|
|
312,753
|
|
|
72,256
|
|
|
2,699,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Steven Romano, M.D.
|
|
2017
|
|
550,000
|
|
|
—
|
|
|
3,168,250
|
|
|
2,200,000
|
|
|
342,100
|
|
|
53,956
|
|
|
6,314,306
|
|
Executive Vice President and Chief Science Officer
|
|
Trans. Period
|
|
126,923
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,400
|
|
|
7,615
|
|
|
223,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Dr. Frank Scholz
|
|
2017
|
|
549,038
|
|
|
—
|
|
|
2,880,221
|
|
|
2,000,004
|
|
|
481,800
|
|
|
104,983
|
|
|
6,016,046
|
|
Executive Vice President of Global Operations and President, Specialty Generics
|
|
Trans. Period
|
|
115,385
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,300
|
|
|
19,669
|
|
|
216,354
|
|
2016
|
|
469,616
|
|
|
—
|
|
|
914,151
|
|
|
600,016
|
|
|
417,700
|
|
|
122,897
|
|
|
2,524,380
|
|
||
|
|
2015
|
|
430,000
|
|
|
—
|
|
|
616,732
|
|
|
415,487
|
|
|
254,000
|
|
|
57,366
|
|
|
1,773,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Hugh M. O’Neill
|
|
2017
|
|
550,000
|
|
|
—
|
|
|
2,880,221
|
|
|
2,000,004
|
|
|
200,600
|
|
|
63,407
|
|
|
5,694,232
|
|
Executive Vice President and
President, Autoimmune and Rare Diseases |
|
Trans. Period
|
|
109,615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,400
|
|
|
36,007
|
|
|
235,022
|
|
|
2016
|
|
493,270
|
|
|
—
|
|
|
1,020,076
|
|
|
680,003
|
|
|
490,500
|
|
|
104,632
|
|
|
2,788,481
|
|
|
|
|
2015
|
|
454,808
|
|
|
—
|
|
|
681,283
|
|
|
458,968
|
|
|
207,869
|
|
|
459,032
|
|
|
2,261,960
|
|
(1)
|
The amounts reported represent the aggregate grant date fair value, computed in accordance with Accounting Standards Codification 718 (“ASC 718”), of restricted units, performance units and stock option awards granted to each of our NEOs during fiscal 2017. For performance units, the values shown reflect the grant date fair value based on the probable outcome of the performance conditions. If the highest level of achievement of the performance conditions were assumed, the value of the performance units at the grant date for the proxy officers (other than Dr. Romano) for fiscal years 2017, 2016 and 2015, respectively, would be: Mr. Trudeau, $10,948,114, $9,792,445 and $10,226,177; Mr. Harbaugh, $6,051,938, $2,762,014 and $2,447,658; Dr. Scholz, $4,760,397, $1,506,609 and $1,418,719; and Mr. O’Neill, $4,760,397, $1,707,490 and $1,567,261. If the highest level of achievement of the performance conditions were assumed, the value of the performance units at the grant date for Dr. Romano for fiscal year 2017 would be $5,236,408. Further information regarding the fiscal 2017 awards is included in the Fiscal 2017 Grants of Plan-Based Awards Table, the Outstanding Equity Awards at 2017 Fiscal Year-End Table and the CD&A.
|
(2)
|
The amounts reported represent incentive cash awards paid to the NEOs under our
2017
Global Bonus Plan and our short-term incentive plan for the transition period. For information regarding the calculation of these awards, see the CD&A.
|
(3)
|
The amounts reported represent the aggregate dollar amount for each NEO for employer contributions to the Retirement Savings Plan, employer credits to the Supplemental Savings Plan, executive financial planning, relocation benefits, expatriate and international assignment benefits, executive physicals, executive financial planning and tax reimbursements. We also have Company-purchased tickets to athletic or other events which are generally used for business purposes. In limited instances our named executive officers may have personal use of Company-purchased event tickets when they are not being used for business purposes. No amounts are included because there is no incremental cost to us of such personal use. The following table shows the specific amounts included in the All Other Compensation column of the Summary Compensation Table for the transition period and fiscal
2017
.
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
Period
|
|
Contributions
to Retirement
Savings Plan
($)
|
|
Credits to
Supple-mental
Savings Plan
($)
|
|
Relocation Benefits ($)
|
|
International Assignments
($)
(1)
|
|
Tax
Reimburse-ment
Payments
($)
(2)(3)(4)
|
|
Other
($)
(5)
|
|
Total
($)
|
|||||||
Mark C. Trudeau
|
Fiscal 2017
|
|
16,090
|
|
|
66,495
|
|
|
—
|
|
|
20,355
|
|
|
576,159
|
|
|
17,540
|
|
|
696,639
|
|
|
Transition Period
|
|
—
|
|
|
13,846
|
|
|
—
|
|
|
—
|
|
|
41,915
|
|
|
—
|
|
|
55,761
|
|
Matthew K. Harbaugh
|
Fiscal 2017
|
|
15,880
|
|
|
23,988
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
16,356
|
|
|
56,262
|
|
|
Transition Period
|
|
—
|
|
|
12,909
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,909
|
|
Steven Romano, M.D.
|
Fiscal 2017
|
|
16,200
|
|
|
22,164
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
15,465
|
|
|
53,956
|
|
|
Transition Period
|
|
—
|
|
|
7,615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,615
|
|
Dr. Frank Scholz
|
Fiscal 2017
|
|
14,904
|
|
|
21,621
|
|
|
—
|
|
|
—
|
|
|
53,318
|
|
|
15,140
|
|
|
104,983
|
|
|
Transition Period
|
|
—
|
|
|
8,427
|
|
|
—
|
|
|
—
|
|
|
11,080
|
|
|
162
|
|
|
19,669
|
|
Hugh M. O’Neill
|
Fiscal 2017
|
|
13,955
|
|
|
24,409
|
|
|
—
|
|
|
—
|
|
|
8,406
|
|
|
16,637
|
|
|
63,407
|
|
|
Transition Period
|
|
—
|
|
|
36,007
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,007
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
•
|
“GBP” is the annual cash incentive award payable pursuant to our
2017
Global Bonus Plan.
|
•
|
“PSUs” are restricted unit awards subject to performance-based vesting.
|
•
|
“RSUs” are restricted unit awards subject to time-based vesting.
|
•
|
“Options” are nonqualified stock options subject to time-based vesting.
|
Name
|
|
Grant
Date
|
|
Date of
Commit-tee
Action
|
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
(1)
|
|
Estimated Future Payouts
Under Equity
Incentive Plan Awards
(2)
|
|
All other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
|
|
All other
Option
Awards:
Number of
Securities
Under-lying
Options
(#)
|
|
Exercise or
Base Price
of Option
Awards
($/Sh)
|
|
Grant Date
Fair
Value of
Stock and
Option
Awards
($)
(3)
|
||||||||||||||||||||
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|||||||||||||||||||||||||
Mark C. Trudeau
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
GBP
|
|
|
|
|
|
656,250
|
|
|
1,312,500
|
|
|
3,937,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
19,170
|
|
|
76,681
|
|
|
153,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,474,057
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,462
|
|
(4
|
)
|
|
|
|
|
|
|
2,300,019
|
|
RSUs
|
|
1/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
768
|
|
(5
|
)
|
|
|
|
|
|
|
39,729
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
249,785
|
|
(4)
|
51.73
|
|
|
4,600,016
|
|
Matthew K. Harbaugh
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
GBP
|
|
|
|
|
|
199,500
|
|
|
399,000
|
|
|
1,197,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
4,585
|
|
|
18,338
|
|
|
36,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,309,102
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
1,147
|
|
|
4,587
|
|
|
9,174
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
327,454
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
4,866
|
|
|
19,463
|
|
|
38,926
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
1,389,413
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,633
|
|
(4)
|
|
|
|
|
|
|
|
550,045
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,660
|
|
(8
|
)
|
|
|
|
|
|
|
137,602
|
|
RSUs
|
|
1/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
344
|
|
(5
|
)
|
|
|
|
|
|
|
17,795
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,731
|
|
(4)
|
51.73
|
|
|
1,100,000
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,944
|
|
(9)
|
51.73
|
|
|
275,207
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63,397
|
|
(10)
|
51.73
|
|
|
1,167,513
|
|
Steven Romano, M.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
GBP
|
|
|
|
|
|
178,750
|
|
|
357,500
|
|
|
1,072,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
3,668
|
|
|
14,670
|
|
|
29,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,047,253
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
917
|
|
|
3,668
|
|
|
7,336
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
261,849
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
4,585
|
|
|
18,338
|
|
|
36,676
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
1,309,102
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,506
|
|
(4
|
)
|
|
|
|
|
|
|
440,015
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,127
|
|
(8
|
)
|
|
|
|
|
|
|
110,030
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,785
|
|
(4)
|
51.73
|
|
|
880,004
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,946
|
|
(9)
|
51.73
|
|
|
219,996
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,731
|
|
(10)
|
51.73
|
|
|
1,100,000
|
|
Dr. Frank Scholz
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
GBP
|
|
|
|
|
|
178,750
|
|
|
357,500
|
|
|
1,072,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
3,334
|
|
|
13,337
|
|
|
26,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
952,094
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
834
|
|
|
3,334
|
|
|
6,668
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
238,006
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
4,168
|
|
|
16,671
|
|
|
33,342
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
1,190,099
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,733
|
|
(4
|
)
|
|
|
|
|
|
|
400,028
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,933
|
|
(8
|
)
|
|
|
|
|
|
|
99,994
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,441
|
|
(4)
|
51.73
|
|
|
800,005
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,860
|
|
(9)
|
51.73
|
|
|
199,997
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,301
|
|
(10)
|
51.73
|
|
|
1,000,002
|
|
Hugh M. O’Neill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
GBP
|
|
|
|
|
|
178,750
|
|
|
357,500
|
|
|
1,072,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
3,334
|
|
|
13,337
|
|
|
26,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
952,094
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
834
|
|
|
3,334
|
|
|
6,668
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
238,006
|
|
PSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
4,168
|
|
|
16,671
|
|
|
33,342
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
1,190,099
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,733
|
|
(4
|
)
|
|
|
|
|
|
|
400,028
|
|
RSUs
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,933
|
|
(8
|
)
|
|
|
|
|
|
|
99,994
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,441
|
|
(4)
|
51.73
|
|
|
800,005
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,860
|
|
(9)
|
51.73
|
|
|
199,997
|
|
Options
|
|
1/3/2017
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,301
|
|
(10)
|
51.73
|
|
|
1,000,002
|
|
(1)
|
The amounts reported reflect threshold, target and maximum award amounts for fiscal
2017
that were set in fiscal
2017
under the Global Bonus Plan, which is an element of our Stock and Incentive Plan. The actual amounts earned by each NEO pursuant to such awards are reported under the Non-Equity Plan Incentive Compensation column of the Summary Compensation Table.
|
(2)
|
The amounts reported reflect threshold, target and maximum award amounts for performance units granted to each of our NEOs during fiscal
2017
. The actual amounts are contingent upon the satisfaction of performance-based vesting requirements of Net Revenue CAGR and relative TSR, each weighted at 50%, over a three-year performance period (fiscal
2017
— fiscal
2019
).
|
(3)
|
The amounts reported represent the aggregate grant date fair value, computed in accordance with ASC 718 of performance units, restricted units and stock option awards issued to each of our NEOs during fiscal
2017
.
|
(4)
|
Grants of stock options and restricted units scheduled to vest in four equal amounts on each of January 3, 2018, 2019, 2020 and 2021.
|
(5)
|
Company match grants of restricted units made to participants in the Bonus for Stock Exchange Program on January 3, 2017 which vest one third each on January 3, 2018, January 3, 2019 and January 3, 2020.
|
(6)
|
The amounts reported reflect threshold, target and maximum award amounts for performance units granted for the transition period.
|
(7)
|
The amounts reported reflect threshold, target and maximum award amounts for performance units granted to specific NEOs during fiscal 2017 for retention purposes. The actual amounts are contingent upon the satisfaction of performance-based vesting requirements of Net Revenue CAGR and relative TSR, each weighted at 50%, over a three-year performance period (fiscal 2017 - fiscal 2019).
|
(8)
|
Grants of restricted stock units for the transition period.
|
(9)
|
Grants of stock options for the transition period.
|
(10)
|
Grants of stock options to certain NEOs during fiscal 2017 for retention purposes. Scheduled to vest in its entirety on January 3, 2021.
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||||
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or Units
of Stock That
Have Not Vested
(#)
|
|
Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have Not Vested
(#)
|
|
Equity
Incentive
Plan Awards:
Market or Payout Value of
Unearned Shares, Units or Other Rights
That Have Not
Vested
($)
|
|||||||
Mark C. Trudeau
|
|
17,904
|
|
|
—
|
|
(1)
|
37.85
|
|
|
1/31/2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
38,875
|
|
|
—
|
|
(2)
|
41.73
|
|
|
12/2/2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
234,437
|
|
|
—
|
|
(3)
|
44.00
|
|
|
6/30/2023
|
|
81,819
|
|
(4)
|
1,845,837
|
|
|
—
|
|
|
—
|
|
|
|
42,361
|
|
|
21,181
|
|
(5)
|
51.35
|
|
|
1/1/2024
|
|
3,506
|
|
(6)
|
79,095
|
|
|
—
|
|
|
—
|
|
|
|
54,007
|
|
|
54,007
|
|
(7)
|
96.96
|
|
|
1/2/2025
|
|
7,993
|
|
(8)
|
180,322
|
|
|
52,734
|
|
(9)
|
1,189,679
|
|
|
|
43,882
|
|
|
131,646
|
|
(10)
|
72.61
|
|
|
1/4/2026
|
|
20,142
|
|
(11)
|
454,404
|
|
|
95,350
|
|
(12)
|
2,151,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,210
|
|
(13)
|
27,298
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
249,785
|
|
(14)
|
51.73
|
|
|
1/3/2027
|
|
44,462
|
|
(15)
|
1,003,063
|
|
|
153,362
|
|
(16)
|
3,459,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,837
|
|
(17)
|
86,563
|
|
|
—
|
|
|
—
|
|
Matthew K. Harbaugh
|
|
9,728
|
|
|
—
|
|
(18)
|
33.67
|
|
|
11/30/2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
12,934
|
|
|
—
|
|
(18)
|
33.67
|
|
|
11/30/2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2,104
|
|
|
—
|
|
(19)
|
37.85
|
|
|
1/31/2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
4,808
|
|
|
—
|
|
(19)
|
37.85
|
|
|
1/31/2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
15,958
|
|
|
—
|
|
(2)
|
41.73
|
|
|
12/2/2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
25,072
|
|
|
—
|
|
(3)
|
44.00
|
|
|
6/30/2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
14,526
|
|
|
4,843
|
|
(5)
|
51.35
|
|
|
1/1/2024
|
|
802
|
|
(6)
|
18,093
|
|
|
—
|
|
|
—
|
|
|
|
12,927
|
|
|
12,927
|
|
(7)
|
96.96
|
|
|
1/2/2025
|
|
1,914
|
|
(8)
|
43,180
|
|
|
12,622
|
|
(9)
|
284,752
|
|
|
|
12,377
|
|
|
37,131
|
|
(10)
|
72.61
|
|
|
1/4/2026
|
|
5,682
|
|
(11)
|
128,186
|
|
|
26,894
|
|
(12)
|
606,729
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
539
|
|
(13)
|
12,160
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
59,731
|
|
(14)
|
51.73
|
|
|
1/3/2027
|
|
10,633
|
|
(15)
|
239,880
|
|
|
36,676
|
|
(16)
|
827,411
|
|
|
|
—
|
|
|
14,944
|
|
(20)
|
51.73
|
|
|
1/3/2027
|
|
2,660
|
|
(21)
|
60,010
|
|
|
9,174
|
|
(22)
|
206,965
|
|
|
|
—
|
|
|
63,397
|
|
(23)
|
51.73
|
|
|
1/3/2027
|
|
1,718
|
|
(17)
|
38,758
|
|
|
38,926
|
|
(24)
|
878,171
|
|
Steven Romano, M.D.
|
|
5,637
|
|
|
5,638
|
|
(25)
|
120.27
|
|
|
7/1/2025
|
|
1,663
|
|
(25)
|
37,517
|
|
|
—
|
|
|
—
|
|
|
|
5,572
|
|
|
16,716
|
|
(10)
|
72.61
|
|
|
1/4/2026
|
|
2,558
|
|
(11)
|
57,708
|
|
|
12,108
|
|
(12)
|
273,156
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
636
|
|
(13)
|
14,348
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
47,785
|
|
(14)
|
51.73
|
|
|
1/3/2027
|
|
8,506
|
|
(15)
|
191,895
|
|
|
29,340
|
|
(16)
|
661,910
|
|
|
|
—
|
|
|
11,946
|
|
(20)
|
51.73
|
|
|
1/3/2027
|
|
2,127
|
|
(21)
|
47,985
|
|
|
7,336
|
|
(22)
|
165,500
|
|
|
|
—
|
|
|
59,731
|
|
(23)
|
51.73
|
|
|
1/3/2027
|
|
—
|
|
|
—
|
|
|
36,676
|
|
(24)
|
827,411
|
|
Dr. Frank Scholz
|
|
7,472
|
|
|
2,491
|
|
(25)
|
62.59
|
|
|
4/1/2024
|
|
413
|
|
(26)
|
9,317
|
|
|
—
|
|
|
—
|
|
|
|
3,113
|
|
|
3,114
|
|
(25)
|
62.59
|
|
|
4/1/2024
|
|
1,031
|
|
(26)
|
23,259
|
|
|
—
|
|
|
—
|
|
|
|
7,491
|
|
|
7,492
|
|
(7)
|
96.96
|
|
|
1/2/2025
|
|
1,109
|
|
(8)
|
25,019
|
|
|
7,316
|
|
(9)
|
165,049
|
|
|
|
6,751
|
|
|
20,254
|
|
(10)
|
72.61
|
|
|
1/4/2026
|
|
3,099
|
|
(11)
|
69,913
|
|
|
14,670
|
|
(12)
|
330,955
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
645
|
|
(13)
|
14,551
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
43,441
|
|
(14)
|
51.73
|
|
|
1/3/2027
|
|
7,733
|
|
(15)
|
174,456
|
|
|
26,674
|
|
(16)
|
601,765
|
|
|
|
—
|
|
|
10,860
|
|
(20)
|
51.73
|
|
|
1/3/2027
|
|
1,933
|
|
(21)
|
43,608
|
|
|
6,668
|
|
(22)
|
150,430
|
|
|
|
—
|
|
|
54,301
|
|
(23)
|
51.73
|
|
|
1/3/2027
|
|
—
|
|
|
—
|
|
|
33,342
|
|
(24)
|
752,196
|
|
Hugh M. O’Neill
|
|
11,296
|
|
|
3,766
|
|
(5)
|
51.35
|
|
|
1/1/2024
|
|
624
|
|
(6)
|
14,077
|
|
|
—
|
|
|
—
|
|
|
|
4,707
|
|
|
4,707
|
|
(27)
|
51.35
|
|
|
1/1/2024
|
|
1,558
|
|
(28)
|
35,148
|
|
|
—
|
|
|
—
|
|
|
|
8,275
|
|
|
8,276
|
|
(7)
|
96.96
|
|
|
1/2/2025
|
|
1,225
|
|
(8)
|
27,636
|
|
|
8,082
|
|
(9)
|
182,330
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
7,651
|
|
|
22,954
|
|
(10)
|
72.61
|
|
|
1/4/2026
|
|
3,513
|
|
(11)
|
79,253
|
|
|
16,626
|
|
(12)
|
375,083
|
|
|
|
—
|
|
|
43,441
|
|
(14)
|
51.73
|
|
|
1/3/2027
|
|
7,733
|
|
(15)
|
174,456
|
|
|
26,674
|
|
(16)
|
601,765
|
|
|
|
—
|
|
|
10,860
|
|
(20)
|
51.73
|
|
|
1/3/2027
|
|
1,933
|
|
(21)
|
43,608
|
|
|
6,668
|
|
(22)
|
150,430
|
|
|
|
—
|
|
|
54,301
|
|
(23)
|
51.73
|
|
|
1/3/2027
|
|
—
|
|
|
—
|
|
|
33,342
|
|
(24)
|
752,196
|
|
(1)
|
Represents stock options granted on February 1, 2012 to Mr. Trudeau in connection with his commencement of employment with Covidien as President of its Pharmaceuticals business, which vest 50% on each of the 3
rd
and 4
th
anniversaries of the grant date.
|
(2)
|
Represents stock options granted on December 3, 2012, which vest one third on each of the 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(3)
|
Represents stock options granted on July 1, 2013 in connection with the separation from Covidien, which vest 50% on each of the 3
rd
and 4
th
anniversaries of the grant date.
|
(4)
|
Represents restricted units granted on July 1, 2013 in connection with the separation from Covidien, which vest 50% on each of the 3
rd
and 4
th
anniversaries of the grant date; except for the grant to Mr. Trudeau, which vests in full on the 5
th
anniversary of the grant date.
|
(5)
|
Represents stock options granted on January 2, 2014, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(6)
|
Represents restricted units granted on January 2, 2014, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(7)
|
Represents stock options granted on January 2, 2015, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(8)
|
Represents restricted units granted on January 2, 2015, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(9)
|
Represents performance units granted on January 2, 2015, which cover the fiscal 2015 — 2017 performance cycle. The amounts reported in this column are based on achievement at the 200% level. Payment of shares earned will occur during January 2018.
|
(10)
|
Represents stock options granted on January 4, 2016, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(11)
|
Represents restricted units granted on January 4, 2016, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(12)
|
Represents performance units granted on January 4, 2016, which cover the fiscal 2016 — 2018 performance cycle. The amounts reported in this column are based on achievement at the 200% level. Payment of shares earned will occur during January 2019.
|
(13)
|
Represents restricted units granted to participants in the Bonus for Stock Exchange Program on January 4, 2016 which vest one third each on the 1
st
, 2
nd
and 3
rd
anniversaries of the grant date.
|
(14)
|
Represents stock options granted on January 3, 2017, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(15)
|
Represents restricted units granted on January 3, 2017, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(16)
|
Represents performance units granted on January 3, 2017, which cover the fiscal 2017 - 2019 performance cycle. The amounts reported in this column are based on achievement at the 200% level. Payment of shares earned will occur during January 2020.
|
(17)
|
Represents restricted units granted to participants in the Bonus for Stock Exchange Program on January 3, 2017 which vest one third each on the 1
st
, 2
nd
and 3
rd
anniversaries of the grant date.
|
(18)
|
Represents stock options granted on December 1, 2011, which vest 50% on each of the 3
rd
and 4
th
anniversaries of the grant date.
|
(19)
|
Represents stock options granted on February 1, 2012 to Mr. Harbaugh as a supplemental award, which vest 50% on each of the 3
rd
and 4
th
anniversaries of the grant date.
|
(20)
|
Represents stock options granted on January 3, 2017 for the transition period, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(21)
|
Represents restricted units granted on January 3, 2017 for the transition period, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(22)
|
Represents performance units granted on January 3, 2017 for the transition period, which cover the fiscal 2017 - 2019 performance cycle. The amounts reported in this column are based on achievement at the 200% level. Payment of shares earned will occur during January 2020.
|
(23)
|
Represents stock options granted to certain NEOs on January 3, 2017, which fully vest on the 4
th
anniversary of the grant date.
|
(24)
|
Represents performance units granted to certain NEOs on January 3, 2017, which cover the fiscal 2017 - 2019 performance cycle. The amounts reported in this column are based on achievement at the 200% level. Payment of shares earned will occur during January 2020.
|
(25)
|
Represents stock options granted on April 1, 2014, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(26)
|
Represents restricted units granted on April 1, 2014, which vest 25% on each of the 1
st
, 2
nd
, 3
rd
and 4
th
anniversaries of the grant date.
|
(27)
|
Represents stock options granted on January 2, 2014, which vest 50% each on the 3
rd
and 4
th
anniversaries of the grant date.
|
(28)
|
Represents restricted units granted on January 2, 2014, which vest 50% each on the 3
rd
and 4
th
anniversaries of the grant date.
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||
Name
|
|
Number of
Shares
Acquired on
Exercise
(#)
|
|
Value
Realized
on Exercise
($)
|
|
Number of
Shares Acquired
on Vesting
(#)
|
|
Value Realized
on Vesting
($)
|
||||
Mark C. Trudeau
|
|
|
|
|
|
|
|
|
||||
Transition Period
|
|
__
|
|
|
__
|
|
|
4,321
|
|
|
231,649
|
|
Fiscal 2017
|
|
—
|
|
|
—
|
|
|
62,339
|
|
|
3,130,394
|
|
Matthew K. Harbaugh
|
|
|
|
|
|
|
|
|
||||
Transition Period
|
|
__
|
|
|
__
|
|
|
886
|
|
|
47,498
|
|
Fiscal 2017
|
|
—
|
|
|
—
|
|
|
19,160
|
|
|
939,922
|
|
Steven Romano, M.D.
|
|
|
|
|
|
|
|
|
||||
Transition Period
|
|
__
|
|
|
__
|
|
|
__
|
|
|
__
|
|
Fiscal 2017
|
|
—
|
|
|
—
|
|
|
2,003
|
|
|
99,567
|
|
Dr. Frank Scholz
|
|
|
|
|
|
|
|
|
||||
Transition Period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Fiscal 2017
|
|
—
|
|
|
—
|
|
|
8,943
|
|
|
413,201
|
|
Hugh M. O’Neill
|
|
|
|
|
|
|
|
|
||||
Transition Period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Fiscal 2017
|
|
—
|
|
|
—
|
|
|
12,412
|
|
|
622,309
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
|
Executive
Contributions
in Last FY
($)
(1)
|
|
Registrant
Contributions
in Last FY
($)
(2)
|
|
Aggregate
Earnings(Loss) in
Last FY
($)
(3)
|
|
Aggregate
Withdrawals /
Distributions
($)
|
|
Aggregate
Balance at
Last FYE
($)
(4)
|
|||||
Mark C. Trudeau
|
|
—
|
|
|
166,066
|
|
|
203,428
|
|
|
—
|
|
|
1,152,347
|
|
Matthew K. Harbaugh
|
|
125,702
|
|
|
66,077
|
|
|
127,347
|
|
|
—
|
|
|
636,605
|
|
Steven Romano, M.D.
|
|
—
|
|
|
61,214
|
|
|
14,185
|
|
|
—
|
|
|
93,325
|
|
Dr. Frank Scholz
|
|
64,928
|
|
|
53,606
|
|
|
137,219
|
|
|
—
|
|
|
914,466
|
|
Hugh M. O’Neill
|
|
150,097
|
|
|
60,416
|
|
|
67,858
|
|
|
—
|
|
|
528,520
|
|
(1)
|
The amounts reported include amounts deferred by the NEOs during the transition period and fiscal
2017
under our Supplemental Savings Plan. All amounts reported in this column are also included in the Salary and/or Non-Equity Incentive Plan Compensation columns in the Summary Compensation Table.
|
(2)
|
The amounts reported include amounts that we credited to our Supplemental Savings Plan on behalf of the NEOs during the transition period and fiscal
2017
. These amounts are included in the amounts set forth in the All Other Compensation column of the Summary Compensation Table for fiscal
2017
and are specifically broken out in footnote 3 to the Summary Compensation Table.
|
(3)
|
The amounts reported include earnings credited to the NEO’s account in the Supplemental Savings Plan. Earnings on amounts credited to the Supplemental Savings Plan are determined by investment selections made by each NEO in investment alternatives that generally mirror investment choices offered under the Retirement Savings Plan (our 401(k) plan).
|
(4)
|
The amounts reported for each NEO includes the NEO’s total balance in our Supplemental Savings Plan as of
December 29, 2017
.
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
•
|
Continuation of base salary for a period of 18 months (24 months for our CEO);
|
•
|
Payment of 1.5 times the average of the executive’s bonus for the previous three fiscal years (two times the average of the previous three fiscal year bonuses for our CEO);
|
•
|
Continuation of health and dental benefits at active employee rates for a period of up to 18 months (24 months for our CEO);
|
•
|
12 months accelerated vesting of unvested stock options;
|
•
|
12 months to exercise vested stock options (unless a longer period is provided in the applicable award agreement);
|
•
|
12 months accelerated vesting of unvested restricted unit awards that are subject solely to time-based vesting;
|
•
|
12 months accelerated vesting of unvested performance unit awards if, and to the extent that, the HRCC determines that the applicable performance criteria have been attained;
|
•
|
Outplacement services, at our discretion, for up to 12 months; and
|
•
|
Payment of a pro-rata portion of the executive’s annual incentive cash award for the fiscal year in which such executive’s employment terminates.
|
•
|
A single lump sum payment equal to 18 months of the executive’s base salary (24 months for our CEO);
|
•
|
A single lump sum payment equal to 1.5 times the average of the executive’s bonus for the previous three fiscal years (two times the average of the previous three fiscal year bonuses for our CEO);
|
•
|
Continuation of health and dental benefits at active employee rates for a period of up to 18 months (24 months for our CEO);
|
•
|
Full vesting of unvested stock options;
|
•
|
12 months to exercise vested stock options (unless a longer period is provided in the applicable option agreement);
|
•
|
Full vesting of unvested restricted unit awards that are subject solely to time-based vesting;
|
•
|
Full vesting of unvested performance unit awards if, and to the extent that, the HRCC determines that the applicable performance criteria have been or will be attained or would have been attained during the 18-month period after the executive’s employment terminates (24-month period for our CEO);
|
•
|
Outplacement services, at our discretion, for up to 12 months; and
|
•
|
Payment of a pro-rata portion of the executive’s annual incentive cash award for the fiscal year in which such executive’s employment terminates.
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
Name and Termination Scenario
|
|
Cash
Severance
($)
|
|
Bonus
($)
|
|
Option
Awards
($)
|
|
Stock
Awards
($)
|
|
Welfare
Benefits and
Outplacement
($)
|
|
Cutback
(1)
($)
|
|
Total
($)
|
|
|
|||||||
Mark C. Trudeau
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Involuntary Termination (other than for cause)
|
|
5,094,167
|
|
|
1,312,500
|
|
|
—
|
|
|
2,686,445
|
|
|
74,797
|
|
|
—
|
|
|
9,167,909
|
|
|
|
Involuntary Termination (for cause)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Voluntary Termination
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Death or Disability
|
|
—
|
|
|
1,312,500
|
|
|
—
|
|
|
6,708,690
|
|
|
—
|
|
|
—
|
|
|
8,021,190
|
|
|
|
Change in Control Termination
|
|
5,094,167
|
|
|
1,312,500
|
|
|
—
|
|
|
6,708,690
|
|
|
74,797
|
|
|
—
|
|
|
13,190,154
|
|
|
|
Matthew K. Harbaugh
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Involuntary Termination (other than for cause)
|
|
1,616,712
|
|
|
399,000
|
|
|
—
|
|
|
230,608
|
|
|
65,891
|
|
|
—
|
|
|
2,312,211
|
|
|
|
Involuntary Termination (for cause)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Voluntary Termination
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Death or Disability
|
|
—
|
|
|
399,000
|
|
|
—
|
|
|
1,854,139
|
|
|
—
|
|
|
—
|
|
|
2,253,139
|
|
|
|
Change in Control Termination
|
|
1,616,712
|
|
|
399,000
|
|
|
—
|
|
|
1,854,139
|
|
|
65,891
|
|
|
—
|
|
|
3,935,742
|
|
|
|
Steven Romano, M.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Involuntary Termination (other than for cause)
|
|
1,539,057
|
|
|
357,500
|
|
|
—
|
|
|
105,152
|
|
|
36,388
|
|
|
—
|
|
|
2,038,097
|
|
|
|
Involuntary Termination (for cause)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Voluntary Termination
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Death or Disability
|
|
—
|
|
|
357,500
|
|
|
—
|
|
|
1,313,488
|
|
|
—
|
|
|
—
|
|
|
1,670,988
|
|
|
|
Change in Control Termination
|
|
1,539,057
|
|
|
357,500
|
|
|
—
|
|
|
1,313,488
|
|
|
36,388
|
|
|
(107,838
|
)
|
|
3,138,595
|
|
|
|
Dr. Frank Scholz
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Involuntary Termination (other than for cause)
|
|
1,392,208
|
|
|
357,500
|
|
|
—
|
|
|
161,597
|
|
|
62,348
|
|
|
—
|
|
|
1,973,653
|
|
|
|
Involuntary Termination (for cause)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Voluntary Termination
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Death or Disability
|
|
—
|
|
|
357,500
|
|
|
—
|
|
|
1,309,247
|
|
|
—
|
|
|
—
|
|
|
1,666,747
|
|
|
|
Change in Control Termination
|
|
1,393,027
|
|
|
357,500
|
|
|
—
|
|
|
1,309,247
|
|
|
62,348
|
|
|
(818
|
)
|
|
3,121,304
|
|
|
|
Hugh M. O’Neill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Involuntary Termination (other than for cause)
|
|
1,414,185
|
|
|
357,500
|
|
|
—
|
|
|
178,698
|
|
|
63,779
|
|
|
—
|
|
|
2,014,162
|
|
|
|
Involuntary Termination (for cause)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Voluntary Termination
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Death or Disability
|
|
—
|
|
|
357,500
|
|
|
—
|
|
|
1,348,659
|
|
|
—
|
|
|
—
|
|
|
1,706,159
|
|
|
|
Change in Control Termination
|
|
1,414,185
|
|
|
357,500
|
|
|
—
|
|
|
1,348,659
|
|
|
63,779
|
|
|
(313,244
|
)
|
|
2,870,879
|
|
|
|
(1)
|
The amount reflected assumes best net treatment of parachute amounts that exceed the limit under Section 280G of the Code. Benefits are either cutback to just below the limit under Section 280G of the Code, or the executive pays any excise tax due (whichever is better for the executive on an after-tax basis). The calculations assume that payments to Messrs. Trudeau and O’Neill and Dr. Romano would be subject to cutbacks in the amounts as indicated.
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
SECURITY OWNERSHIP AND REPORTING
|
Name of Beneficial Owner
|
Number of Mallinckrodt
Ordinary Shares
Beneficially Owned
|
Percentage
Ownership
|
|
Directors, Director Nominees and Executive Officers
|
|
|
|
Melvin D. Booth
|
38,202
|
|
*
|
David R. Carlucci
|
26,020
|
|
*
|
J. Martin Carroll
|
20,978
|
|
*
|
Paul R. Carter
|
—
|
|
*
|
|
|
|
SECURITY OWNERSHIP AND REPORTING
|
Diane H. Gulyas
|
17,344
|
|
*
|
David Y. Norton
|
5,080
|
|
*
|
JoAnn A. Reed
|
12,978
|
|
*
|
Angus C. Russell
|
22,695
|
|
*
|
Mark C. Trudeau
(1)
|
716,123
|
|
*
|
Anne C. Whitaker
|
—
|
|
*
|
Kneeland C. Youngblood, M.D.
|
17,213
|
|
*
|
Joseph A. Zaccagnino
|
26,061
|
|
*
|
Matthew Harbaugh
(2)
|
210,095
|
|
*
|
Steven Romano
(3)
|
42,640
|
|
*
|
Frank Scholz
(4)
|
80,336
|
|
*
|
Hugh M. O’Neill
(5)
|
92,639
|
|
*
|
All directors and executive officers as a group (20 persons)
(6)
|
1,594,172
|
|
1.8%
|
|
|
|
|
Name of Beneficial Owner
|
Number of Mallinckrodt
Ordinary Shares
Beneficially Owned
|
Percentage
Ownership
|
|
Other Beneficial Owners
|
|
|
|
Scopia Capital Management LP
(7)
152 West 57th Street, 33rd Floor New York, New York 10019 |
8,372,876
|
9.7
|
%
|
Deerfield Partners, L.P.
(8)
780 Third Avenue, 37th Floor New York, New York 10017 |
8,244,863
|
9.5
|
%
|
The Vanguard Group
(9)
100 Vanguard Blvd. Malvern, Pennsylvania 19355 |
8,047,704
|
9.3
|
%
|
BlackRock, Inc.
(10)
55 East 52nd Street New York, New York 10022 |
7,571,139
|
8.8
|
%
|
The Goldman Sachs Group, Inc.
(11)
200 West Street New York, New York 10282 |
4,710,521
|
5.5
|
%
|
*
|
Represents less than 1% of outstanding ordinary shares.
|
(1)
|
Excludes 135,754 restricted units that vest more than 60 days after
March 12, 2018
.
|
(2)
|
Excludes 16,130 restricted units that vest more than 60 days after
March 12, 2018
.
|
(3)
|
Excludes 11,662 restricted units that vest more than 60 days after
March 12, 2018
.
|
(4)
|
Excludes 10,194 restricted units that vest more than 60 days after
March 12, 2018
.
|
(5)
|
Excludes 10,205 restricted units that vest more than 60 days after
March 12, 2018
.
|
(6)
|
Includes 1,444 restricted units and 3,113 ordinary shares issuable upon the exercise of stock options presently exercisable or exercisable within 60 days of
March 12, 2018
. Excludes 231,290 restricted units that vest more than 60 days after
March 12, 2018
.
|
(7)
|
Based on information contained in a notice pursuant to Section 1061 of the Irish Companies Act sent to us by Scopia Capital Management LP, which discloses the number of shares in which Scopia Capital Management LP is interested as of February 27, 2018.
|
(8)
|
Based on information contained in a notice pursuant to Section 1061 of the Irish Companies Act sent to us by Deerfield Management Company, L.P., for and on behalf of Deerfield Partners, L.P., which discloses the number of shares in which Deerfield Parters, L.P. is interested as of March 2, 2018.
|
(9)
|
Based on information contained in a Schedule 13G/A filed with the SEC on February 8, 2018, by The Vanguard Group, which discloses the number of shares beneficially owned by The Vanguard Group as of December 31, 2017.
|
(10)
|
Based on information contained in a notice pursuant to Section 1061 of the Irish Companies Act sent to us by BlackRock, Inc., which discloses the number of shares in which BlackRock, Inc. is interested as of March 16, 2018.
|
(11)
|
Based on information contained in a notice pursuant to Section 1061 of the Irish Companies Act sent to us by The Goldman Sachs Group, Inc., which discloses the number of shares in which The Goldman Sachs Group, Inc. is interested as of January 18, 2018.
|
|
|
SECURITY OWNERSHIP AND REPORTING
|
|
|
|
|
AUDIT AND AUDIT COMMITTEE MATTERS
|
AUDIT AND AUDIT COMMITTEE MATTERS
|
|
Fiscal 2016
|
Transition Period
|
Fiscal 2017
|
||||||
Audit Fees
|
$
|
6,084,240
|
|
$
|
2,002,850
|
|
$
|
6,592,690
|
|
Audit-Related Fees
|
1,000,000
|
|
15,100
|
|
1,741,000
|
|
|||
Tax Fees
|
772,000
|
|
—
|
|
414,478
|
|
|||
All Other Fees
|
—
|
|
—
|
|
—
|
|
|||
Total
|
$
|
7,856,240
|
|
$
|
2,017,950
|
|
$
|
8,748,168
|
|
|
|
AUDIT AND AUDIT COMMITTEE MATTERS
|
|
•
|
Discussed with the independent auditors the matters required to be discussed pursuant to the applicable Auditing Standards relating to communication with audit committees;
|
•
|
Received from the independent auditors the written disclosures and letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence;
|
•
|
Discussed with the independent auditors their independence from the Company and its management; and
|
•
|
Considered whether the independent auditors’ provision of non-audit services to the Company is compatible with maintaining the auditors’ independence.
|
|
|
EQUITY COMPENSATION PLAN INFORMATION
|
EQUITY COMPENSATION PLAN INFORMATION
|
|
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
(a)
(1)(2)
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
(3)
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(excluding securities
reflected in column (a))
(c)
(4)
|
Equity compensation plans approved by security holders
|
5,448,520
|
$61.71
|
13,924,390
|
Equity compensation plans not approved by security holders
|
—
|
—
|
—
|
TOTAL
|
5,448,520
|
$61.71
|
13,924,390
|
(1)
|
As of
December 29, 2017
, there were 3,899,732 ordinary shares to be issued upon exercise of outstanding options with a weighted-average exercise price of $61.71, 1,548,788 ordinary shares to be issued upon settlement of restricted units and performance units granted pursuant to our Stock and Incentive Plan.
|
(2)
|
This table does not include information regarding:
|
*
|
Options converted from Covidien awards in connection with our separation from Covidien in June 2013. We did not assume any equity compensation plans from Covidien, and no grants of Mallinckrodt equity may be made pursuant to any Covidien plans. As of
December 29, 2017
, there were 744,252 ordinary shares to be issued upon exercise of these converted options with a weighted-average exercise price of $37.19.
|
*
|
Options, RSAs and RSUs converted from Questcor Pharmaceuticals, Inc. (“Questcor”) awards in connection with our acquisition of Questcor in August 2014. We did not assume any equity compensation plans from Questcor, and no grants of Mallinckrodt equity may be made pursuant to any Questcor plans. As of
December 29, 2017
, there were 113,437 ordinary shares to be issued upon exercise of these converted options with a weighted-average exercise price of $27.60 and 4,897 ordinary shares to be issued upon settlement of converted RSA and RSU awards.
|
(3)
|
Does not take into account restricted units and performance units, which do not have an exercise price.
|
(4)
|
As of
December 29, 2017
, there were 9,088,183 ordinary shares available for issuance pursuant to the Stock and Incentive Plan and 4,836,207 ordinary shares subject to purchase pursuant to the Mallinckrodt Employee Stock Purchase Plan. Ordinary shares purchased under the Mallinckrodt Employee Stock Purchase Plan. Ordinary shares subject to the Mallinckrodt Employee Stock Purchase Plan may be unissued shares or reacquired shares.
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
•
|
Minimum Vesting Provision.
The amendments to the plan impose a minimum one-year vesting requirement on all equity awards (except with respect to a carve-out of 5% of the shares available to be issued).
|
•
|
Limitations on dividend and dividend equivalent payments on unvested awards.
Dividends and dividend equivalents may not be paid on awards subject to vesting conditions unless and until such conditions are met.
|
•
|
Reasonable limit on full value awards.
The amendment to the plan maintain existing share counting rules and updates the fungible share ratio for full value awards (i.e., restricted stock, restricted units, deferred stock units or performance units), which, as described further below, decreases the number of ordinary shares available for grant by a margin of 1.61 per ordinary share issued and increases the number of ordinary shares available for grant by a margin of 1.61 per ordinary share subject to an award that expires or is forfeited, cancelled or terminated.
|
•
|
No repricing without shareholder approval.
The amendments to the plan further clarify the existing prohibition on the repricing or other exchange of underwater stock options and stock appreciation rights for new awards or cash without shareholder approval.
|
Ordinary shares to be issued upon exercise of outstanding options
(1)
|
|
|
4,579,826
|
|
Weighted average exercise price of outstanding options
|
|
|
$57.36
|
|
Weighted average contractual term of outstanding options
|
|
|
6.69 years
|
|
Ordinary shares to be issued upon settlement of outstanding restricted units, performance units
(2)
and accompanying dividend equivalent units
|
|
|
3,826,931
|
|
Total ordinary shares outstanding
|
|
|
86,387,326
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
•
|
Incorporates a “fungible” ratio for counting full value awards
|
•
|
No liberal share counting or “recycling” of shares
|
•
|
No dividends or dividend equivalents on unvested awards
|
•
|
No automatic share replenishment or “evergreen” provision
|
•
|
No repricing of stock options or stock appreciation rights
|
•
|
No discounted or reload stock options or stock appreciation rights
|
•
|
One-year minimum vesting requirements
|
•
|
No liberal change in control definition
|
•
|
No automatic acceleration of awards upon a change in control
|
•
|
No tax gross-ups
|
•
|
interpret and administer the Mallinckrodt SIP;
|
•
|
prescribe the rules and regulations that it deems necessary for the proper operation and administration of the Mallinckrodt SIP;
|
•
|
select employees to receive awards and determine the form of awards, the number of ordinary shares subject to an award and the terms and conditions of each award;
|
•
|
waive or amend any terms, conditions, restrictions or limitations on an award and/or vest awards upon a participant’s termination of employment, except that the Mallinckrodt SIP’s prohibition on the repricing of stock options and stock appreciation rights cannot be waived; and
|
•
|
delegate its duties and appoint agents to help administer the Mallinckrodt SIP.
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
•
|
Exercise Price.
The HRCC will set the exercise price at the time of grant, which will be no less than the fair market value of an ordinary share as of the date of grant. Under the Mallinckrodt SIP, fair market value is the closing sales price of an ordinary share of Mallinckrodt stock as reported on the NYSE on the date for which fair market value is being determined which, in the case of establishing the exercise price of an option, is the grant date. On March 21, 2018, the closing sales price per share of our ordinary shares as reported on the NYSE was $14.57.
|
•
|
No Repricing.
Other than in connection with required Mallinckrodt SIP adjustments such as recapitalizations or a change in control, the terms of outstanding awards may not be amended to reduce the exercise price of such awards or cancel such awards in exchange for cash, other awards, or stock options or stock appreciation rights with an exercise price that is less than the exercise price of the original stock options or stock appreciation rights, without shareholder approval.
|
•
|
Vesting.
Subject to the minimum vesting requirements, stock options and stock appreciation rights will vest at such time and in the manner as determined at the time of grant by the HRCC. Unless otherwise provided in the award certificate, and subject to the minimum vesting requirements, stock options and stock appreciation
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
•
|
Post-Termination Exercise.
Subject to the term of the award, any vested stock option or stock appreciation right that has not already been exercised will remain exercisable for a period of three years after termination of employment because of early or normal retirement, death or disability, and any vested stock option or stock appreciation right that has not already been exercised will remain exercisable for a period of 90 days after termination of employment for any other reason except for a termination for cause.
|
•
|
Performance Cycles.
Annual performance bonuses will be awarded in connection with a 12-month performance cycle, which will coincide with our fiscal year. Long-term performance awards will be awarded in connection with a performance cycle that will not be shorter than 12 months. The annual performance bonus amount and the number of shares or units that are earned will be determined by the level of performance attained in relation to the applicable performance measures, as certified by the HRCC following completion of the performance period.
|
•
|
Target Awards and Award Criteria.
The HRCC will set a target amount or target number of shares or units for each participant receiving an annual performance bonus or long-term performance award within 90 days after the start of a performance cycle. At that time, the HRCC will also establish criteria for these awards, including the minimum level of performance that must be attained before any annual performance bonuses and long-term performance awards will be paid or vest and the annual performance bonus amounts and the number of shares or units that will become payable upon attainment of various levels of performance. The HRCC may select as the performance measure(s) any operating and maintenance expense targets or financial goals as interpreted by the HRCC, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or subsidiary, either individually, alternatively or in any combination, and that are absolute or relative to the performance of one or more comparable companies or an index of comparable companies, and are measured during the performance cycle, provided that, as to an annual performance bonus or long-term performance award granted to a covered employee (which is defined in the Mallinckrodt SIP as being a “covered employee” for purposes of Section 162(m) of the Code), performance measures are limited to the following criteria (subject to the last sentence of this section), and with respect to such awards granted to an employee other than a covered employee, performance measures may include, but not be limited to the following: net sales; return on sales; revenue, net revenue, product revenue or system-wide revenue (including growth of such revenue measures); operating income (before or after taxes) or net operating income; pre- or after-tax income or loss (before or after allocation of corporate overhead and bonus); earnings or loss per share; income or loss, or net income or loss (before or after taxes); return on equity; total stockholder return; share price performance; return on assets or net assets; appreciation in and/or maintenance of the price of the Shares or any other publicly-traded securities of the Company; market share; gross profits; gross or net profit margin; gross profit growth; operating profit or net operating profit (before or after taxes); operating earnings; earnings or losses or net earnings or losses (including earnings or losses before taxes, before interest and taxes, or before interest, taxes, depreciation and amortization); return on operating revenue; economic value-added models or equivalent metrics; comparisons with various stock market indices; reductions in costs; cash flow (including operating cash flow and free cash flow) or cash flow per share (before or after dividends); return on capital (including return on total capital or return on invested capital); cash flow return on investment; cash flow return on capital; improvement in or attainment of expense levels or working capital levels, including cash, inventory and accounts receivable; general and administrative expense savings; inventory control; operating margin; profit margin; gross margin; year-end cash; cash margin; debt reduction; stockholders equity; operating efficiencies; cost reductions or savings; market share; market segment share; customer satisfaction; customer growth; employee satisfaction; productivity or productivity ratios; regulatory achievements (including submitting or filing applications or other documents with regulatory authorities or receiving approval of any such applications or other documents and passing pre-approval inspections (whether of the Company or the Company’s third-party manufacturer) and validation of manufacturing processes (whether the Company’s or the Company’s third-party manufacturer’s)); clinical achievements (including initiating clinical studies; initiating
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
•
|
Dividends and Dividend Equivalents.
At the discretion of the HRCC and as set forth in the applicable award certificate, dividends paid on shares may be paid immediately or withheld and deferred in the participant’s account. In the event of a payment of dividends on ordinary shares, the HRCC may credit long-term performance awards denominated in ordinary shares with dividend equivalent units, which may be withheld and deferred in the participant’s account or credited in the form of additional share units. However, dividend equivalents on long-term performance awards shall be payable at the same time and only to the extent the underlying long-term performance awards become earned, vested, and payable.
|
•
|
Vesting.
Unless the award certificate provides otherwise, any restrictions on restricted stock, restricted units or deferred stock units that have not vested or been satisfied on the date of a participant’s termination of employment will immediately vest in full or in part upon early or normal retirement, death or disability of the participant or certain terminations of employment following a change in control. Upon a termination of employment for any other reason, any unvested restricted units, deferred stock units or shares of restricted stock will be forfeited.
|
•
|
Dividends and Dividend Equivalents.
At the discretion of the HRCC, dividends paid on shares may, to the extent the underlying award to which the shares relate have become fully vested, be paid immediately or withheld and deferred in the participant’s account. In the event of a payment of dividends on ordinary shares, the HRCC may credit restricted units and deferred stock units with dividend equivalent units, which may be distributed immediately, withheld and deferred in the participant’s account or credited in the form of additional share units. Notwithstanding anything herein to the contrary, payments of any dividends, dividend equivalents
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
(a)
|
The maximum number of shares authorized to be acquired by the Company and/or any subsidiary of the Company pursuant to this resolution shall not exceed, in the aggregate, 8,633,623 ordinary shares of US$0.20 each (which represents 10% of the Company’s issued ordinary shares as of our 2017 fiscal year end).
|
(b)
|
The maximum price to be paid for any ordinary share shall be an amount equal to 110% of the closing price on the New York Stock Exchange for the ordinary shares on the trading day preceding the day on which the relevant share is purchased by the Company or the relevant subsidiary of the Company, and the minimum price to be paid for any ordinary share shall be the nominal value of such share.
|
(c)
|
This general authority will be effective from the date of passing of this resolution and will expire eighteen months from the date of the passing of this resolution, unless previously varied, revoked or renewed by ordinary resolution in accordance with the provisions of section 1074 of the Companies Act 2014. The Company or any such subsidiary may, before such expiry, enter into a contract for the purchase of shares which would or might be executed wholly or partly after such expiry and may complete any such contract as if the authority conferred hereby had not expired.
|
|
|
PROPOSALS REQUIRING YOUR VOTE
|
|
(a)
|
the maximum price at which such treasury share may be re-alloted shall be an amount equal to 120% of the “market price”; and
|
(b)
|
the minimum price at which a treasury share may be re-alloted shall be the nominal value of the share where such a share is required to satisfy an obligation under an employees’ share scheme operated by the Company or, in all other cases, an amount equal to 95% of the “market price”; and
|
(c)
|
for the purposes of this resolution, the “market price” shall mean the average closing price per ordinary share of the Company, as reported by the New York Stock Exchange, for the thirty (30) trading days immediately preceding the proposed date of re-issuance.
|
|
|
|
OTHER MATTERS
|
OTHER MATTERS
|
|
|
OTHER MATTERS
|
|
|
|
|
APPENDIX A
|
APPENDIX A
|
|
|
APPENDIX A
|
|
(a)
|
“
Stock Options”
awarded pursuant to Section 4.3;
|
(b)
|
“
Stock Appreciation Rights”
awarded pursuant to Section 4.3;
|
(c)
|
“
Annual Performance Bonuses”
awarded pursuant to Section 4.4;
|
(d)
|
“Long-Term Performance Awards”
awarded pursuant to Section 4.5;
|
|
|
|
APPENDIX A
|
(e)
|
“Other Stock-Based Awards”
awarded pursuant to Section 4.6;
|
(f)
|
“Director Awards”
awarded pursuant to Section 4.7; and
|
(g)
|
“Substitute Awards”
awarded pursuant to Section 4.8.
|
(a)
|
any “person” (as defined in Section 13(d) and 14(d) of the Exchange Act, excluding for this purpose, (i) the Company or any Subsidiary or (ii) any employee benefit plan of the Company or any Subsidiary (or any person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan that acquires beneficial ownership of voting securities of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities of the Company representing more than 30 percent of the combined voting power of the Company's then outstanding securities; provided, however, that no Change in Control will be deemed to have occurred as a result of a change in ownership percentage resulting solely from an acquisition of securities by the Company; or
|
(b)
|
persons who, as of the Effective Date constitute the Board (the “Incumbent Directors”) cease for any reason (including without limitation, as a result of a tender offer, proxy contest, merger or similar transaction) to constitute at least a majority thereof, provided that any person becoming a Director of the Company subsequent to the Effective Date shall be considered an Incumbent Director if such person's election or nomination for election was approved by a vote of at least 50 percent of the Incumbent Directors; but provided further, that any such person whose initial assumption of office is in connection with an actual or threatened proxy contest relating to the election of members of the Board or other actual or threatened solicitation of proxies or consents by or on behalf of a “person” (as defined in Section 13(d) and 14(d) of the Exchange Act) other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation, shall not be considered an Incumbent Director; or
|
(c)
|
consummation of a reorganization, merger or consolidation or sale or other disposition of at least 80 percent by value of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of outstanding voting securities of the Company immediately prior to such Business Combination beneficially own directly or indirectly more than 50 percent of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the company resulting from such Business Combination (including, without limitation, a company which, as a result of such transaction, owns the Company or all or substantially all of the
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|
|
APPENDIX A
|
|
(d)
|
a a complete liquidation or dissolution of the Company.
|
(a)
|
termination of the Participant’s employment by the Company for any reason other than for Cause, Disability or death;
|
(b)
|
termination of the Participant’s employment by the Participant after one of the following events, provided that the Participant’s termination of employment occurs within sixty (60) days after the occurrence of any such event:
|
(i)
|
the Company, without the Participant’s consent, requires the Participant to relocate to a principal place of employment more than fifty (50) miles from his or her existing place of employment, which materially increases the Participant’s commuting time; or
|
(ii)
|
the Company, without the Participant’s consent, materially reduces the Participant’s base salary, target annual bonus opportunity, or retirement, welfare, target share incentive opportunity, and other benefits taken as a whole, as in effect immediately prior to the Change in Control;
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|
|
|
APPENDIX A
|
|
|
APPENDIX A
|
|
|
|
|
APPENDIX A
|
|
|
APPENDIX A
|
|
(a)
|
Interpret and administer the Plan and any instrument or agreement relating to the Plan;
|
(b)
|
Prescribe the rules and regulations that it deems necessary for the proper operation and administration of the Plan, and amend or rescind any existing rules or regulations relating to the Plan;
|
(c)
|
Select Employees to receive Awards under the Plan;
|
(d)
|
Determine the form of an Award, the number of Shares subject to each Award, all the terms and conditions of an Award, including, without limitation, the conditions on exercise or vesting, the designation of Stock Options as Incentive Stock Options or Nonqualified Stock Options, and the circumstances under which an Award may be settled in cash or Shares or may be cancelled, forfeited or suspended, and the terms of each Award Certificate;
|
(e)
|
Determine whether Awards will be granted singly, in combination or in tandem;
|
(f)
|
Establish and interpret Performance Measures (or, as applicable, other performance criteria) in connection with Annual Performance Bonuses and Long-Term Performance Awards, evaluate the level of performance over a Performance Cycle and certify the level of performance attained with respect to Performance Measures (or other performance criteria, as applicable);
|
(g)
|
Subject to Sections 6.1 and 7.12, waive or amend any terms, conditions, restriction or limitation on an Award, except that the prohibition on the repricing of Stock Options and Stock Appreciation Rights without shareholder approval, as described in Section 4.3(g), may not be waived;
|
(h)
|
Make any adjustments to the Plan (including but not limited to adjustment of the number of Shares available under the Plan or any Award) and any Award granted under the Plan as shall be appropriate pursuant to Section 5.3;
|
(i)
|
Determine and set forth in the applicable Award Certificate the circumstances under which Awards may be deferred and the extent to which a deferral will be credited with Dividend Equivalents and interest thereon;
|
(j)
|
In accordance with Section 7.1, determine and set forth in the applicable Award Certificate whether a Nonqualified Stock Option, Restricted Share or other Award may be transferable to family members, a family trust or a family partnership;
|
(k)
|
Establish any subplans and make any modifications to the Plan, without amending the Plan, or to Awards made hereunder (including the establishment of terms and conditions in the Award Certificate not otherwise inconsistent with the terms of the Plan) that the Committee may determine to be necessary or advisable for grants made in countries outside the United States to comply with, or to achieve favorable tax treatment under, applicable foreign laws or regulations or tax policies or customs;
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|
|
|
APPENDIX A
|
(l)
|
Appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
|
(m)
|
Take any and all other actions it deems necessary or advisable for the proper operation or administration of the Plan.
|
(a)
|
Form.
Stock Options granted under the Plan will, at the discretion of the Committee and as set forth in the Award Certificate, be in the form of Incentive Stock Options, Nonqualified Stock Options or a combination of the two. If an Incentive Stock Option and a Nonqualified Stock Option are granted to the same Participant under the Plan at the same time, the form of each will be clearly identified, and they will be deemed to have been granted in separate grants. In no event will the exercise of one Stock Option affect the right to exercise the other Stock Option. Stock Appreciation Rights may be granted either alone or concurrently with Nonqualified Stock Options and the amount of Shares attributable to each Stock Appreciation Right shall be set forth in the applicable Award Certificate on or before the grant date.
|
(b)
|
Exercise Price.
Other than with respect to Substitute Awards described in Section 4.8, the Committee will set the Exercise Price of Stock Options or Stock Appreciation Rights granted under the Plan at a price that is equal to or greater than the Fair Market Value of a Share on the date of grant, subject to
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|
|
APPENDIX A
|
|
(c)
|
Term and Timing of Exercise.
Each Stock Option or Stock Appreciation Right granted under the Plan will be exercisable in whole or in part, subject to the following conditions, unless determined otherwise by the Committee:
|
(i)
|
The term of each Stock Option and Stock Appreciation Right shall be determined by the Committee and set forth in the applicable Award Certificate, but in no event shall the term thereof exceed ten (10) years from the date of its grant. Notwithstanding the foregoing, in the event that on the last business day of the term of a Stock Option (other than an Incentive Stock Option) or Stock Appreciation Right (i) the exercise of the Award is prohibited by applicable law or (ii) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Stock Option or Stock Appreciation Right shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement. Moreover, notwithstanding the foregoing, an Award Certificate may provide that if on the last day of the term of a Stock Option or Stock Appreciation Right the Fair Market Value of one Share exceeds the option or grant price per Share, the Participant has not exercised the Stock Option, Stock Appreciation Right or tandem Award, and the Award has not expired, the Stock Option or Stock Appreciation Right shall be deemed to have been exercised by the Participant on such day with payment made by withholding Shares otherwise issuable in connection with the exercise of the Stock Option or Stock Appreciation Right. In such event, the Company shall deliver to the Participant the number of Shares for which the Stock Option or Stock Appreciation Right was deemed exercised, less the number of Shares required to be withheld for the payment of the total purchase price for a Stock Option and required withholding taxes for both Stock Options and Stock Appreciation Rights; provided, however, any fractional Share shall be settled in cash.
|
(ii)
|
A Stock Option or Stock Appreciation Right will become exercisable at such times and in such manner as determined by the Committee and set forth in the applicable Award Certificate, subject to the minimum vesting limitations of Section 4.10.
|
(iii)
|
Unless the applicable Award Certificate provides otherwise, and subject to the minimum vesting limitations of Section 4.10, upon the death, Disability, Normal Retirement or a Change in Control Termination of a Participant who has outstanding Stock Options or Stock Appreciation Rights, the unvested Stock Options or Stock Appreciation Rights will fully vest. Unless the applicable Award Certificate or the remainder of this Section 4.3(c) provides otherwise, the Participant’s Stock Options and Stock Appreciation Rights will lapse, and will not thereafter be exercisable, upon the earlier of (A) their original expiration date or (B) the date that is three (3) years after the date on which the Participant dies, incurs a Disability or retires due to Normal Retirement.
|
(iv)
|
Unless the applicable Award Certificate provides otherwise, and subject to the minimum vesting limitations of Section 4.10, upon the Termination of Employment of a Participant for any reason other than the Participant's death, Disability, Normal Retirement or a Change in Control Termination, if the Participant’s termination qualifies as Early Retirement, a pro rata portion of the Participant’s Stock Options and Stock Appreciation Rights will vest so that the total number of vested Stock Options or Stock Appreciation Rights held by the Participant at Termination of Employment (including those that have already vested as of such date) will be equal to the total number of Stock Options or Stock Appreciation Rights originally granted to the Participant under the applicable Award multiplied by a fraction, the numerator of which is the period of time (in whole
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|
|
|
APPENDIX A
|
(v)
|
Unless the applicable Award Certificate provides otherwise, upon the Termination of Employment of a Participant that does not meet the requirements of paragraphs (iii) or (iv) above, any unvested Stock Options or Stock Appreciation Rights will be forfeited. Unless the applicable Award Certificate provides otherwise, any Stock Options or Stock Appreciation Rights that are vested as of such Termination of Employment will lapse, and will not thereafter be exercisable, upon the earlier of (A) their original expiration date or (B) the date that is ninety (90) days after the date of such Termination of Employment.
|
(vi)
|
Stock Options and Stock Appreciation Rights of a deceased Participant may be exercised only by the estate of the Participant or by the person given authority to exercise the Stock Options or Stock Appreciation Rights by the Participant's will or by operation of law. If a Stock Option or Stock Appreciation Right is exercised by the executor or administrator of a deceased Participant, or by the person or persons to whom the Stock Option or Stock Appreciation Right has been transferred by the Participant's will or the applicable laws of descent and distribution, the Company will be under no obligation to deliver Shares or cash until the Company is satisfied that the person exercising the Stock Option or Stock Appreciation Right is the duly appointed executor or administrator of the deceased Participant or the person to whom the Stock Option or Stock Appreciation Right has been transferred by the Participant's will or by applicable laws of descent and distribution.
|
(vii)
|
A Stock Appreciation Right granted in tandem with a Stock Option is subject to the same terms and conditions as the related Stock Option and will be exercisable only to the extent that the related Stock Option is exercisable. When either a Stock Option or a Stock Appreciation Right granted in tandem with each other is exercised, the tandem Stock Option or Stock Appreciation Right, as applicable, shall expire.
|
(d)
|
Payment of Exercise Price.
The Exercise Price of a Stock Option must be paid in full when the Stock Option is exercised. Shares will be issued and delivered only upon receipt of payment. Payment of the Exercise Price may be made in cash or by certified check, bank draft, wire transfer, or postal or express money order, provided that the format is approved by the Company or a designated third-party administrator. The Committee, in its discretion may also allow payment to be made by any of the following methods, as set forth in the applicable Award Certificate:
|
(i)
|
Delivering a properly executed exercise notice to the Company or its agent, together with irrevocable instructions to a broker to deliver to the Company, within the typical settlement cycle for the sale of equity securities on the relevant trading market (or otherwise in accordance with the provisions of Regulation T issued by the Federal Reserve Board), the amount of sale proceeds with respect to the portion of the Shares to be acquired having a Fair Market Value on the date of exercise equal to the sum of the applicable portion of the Exercise Price being so paid;
|
(ii)
|
Subject to any requirements of applicable law and regulations, tendering (actually or by attestation) to the Company or its agent previously acquired Shares that have a Fair Market Value on the day prior to the date of exercise equal to the applicable portion of the Exercise Price being so paid; or
|
(iii)
|
Subject to any requirements of applicable law and regulations, instructing the Company to reduce the number of Shares that would otherwise be issued by such number of Shares as have in the aggregate a Fair Market Value on the date of exercise equal to the applicable portion of the Exercise Price being so paid.
|
(e)
|
Incentive Stock Options.
Incentive Stock Options granted under the Plan will be subject to the following additional conditions, limitations and restrictions:
|
|
|
APPENDIX A
|
|
(i)
|
Eligibility.
Incentive Stock Options may be granted only to Employees of the Company or a Subsidiary that is a subsidiary or parent corporation of the Company within the meaning of Code Section 424.
|
(ii)
|
Timing of Grant.
No Incentive Stock Option will be granted under the Plan after the 10-year anniversary of the date on which the Plan is adopted by the Board or, if earlier, the date on which the Plan was approved by shareholders.
|
(iii)
|
Amount of Award.
Subject to Section 5.3 of the Plan, no more than 10 million Shares may be available for grant in the form of Incentive Stock Options. The aggregate Fair Market Value (as of the date of grant) of the Shares with respect to which the Incentive Stock Options awarded to any Employee first become exercisable during any calendar year may not exceed $100,000 (U.S.). For purposes of this $100,000 (U.S.) limit, the Employee's Incentive Stock Options under this Plan and all other plans maintained by the Company and its Subsidiaries will be aggregated. To the extent any Incentive Stock Option would exceed the $100,000 (U.S.) limit, the Incentive Stock Option will afterwards be treated as a Nonqualified Stock Option to the extent required by the Code and underlying regulations and rulings.
|
(iv)
|
Timing of Exercise.
If the Committee exercises its discretion in the Award Certificate to permit an Incentive Stock Option to be exercised by a Participant more than three months after the Participant has ceased being an Employee (or more than 12 months if the Participant is permanently and totally disabled, within the meaning of Code Section 22(e)), the Incentive Stock Option will afterwards be treated as a Nonqualified Stock Option to the extent required by the Code and underlying regulations and rulings. For purposes of this paragraph (iv), an Employee's employment relationship will be treated as continuing intact while the Employee is on military leave, sick leave or another approved leave of absence if the period of leave does not exceed 90 days, or a longer period to the extent that the Employee's right to reemployment with the Company or a Subsidiary is guaranteed by statute or by contract. If the period of leave exceeds 90 days and the Employee's right to reemployment is not guaranteed by statute or contract, the employment relationship will be deemed to have ceased on the 91st day of the leave.
|
(v)
|
Transfer Restrictions.
In no event will the Committee permit an Incentive Stock Option to be transferred by an Employee other than by will or the laws of descent and distribution, and any Incentive Stock Option awarded under this Plan will be exercisable only by the Employee during the Employee's lifetime.
|
(f)
|
Exercise of Stock Appreciation Rights.
Upon exercise of a Participant's Stock Appreciation Rights, the Company will pay cash or Shares or a combination of cash and Shares, in the discretion of the Committee and as described in the Award Certificate. Cash payments will be equal to the excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price, for each Share for which a Stock Appreciation Right was exercised. If Shares are paid for the Stock Appreciation Right, the Participant will receive a number of whole Shares equal to the quotient of the cash payment amount divided by the Fair Market Value of a Share on the date of exercise.
|
(g)
|
No Repricing.
Except as otherwise provided in Section 5.3 or in connection with a Change in Control, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or cancel outstanding Stock Options or Stock Appreciation Rights in exchange for cash, other Awards, or Stock Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Stock Options or Stock Appreciation Rights without shareholder approval.
|
|
|
|
APPENDIX A
|
(a)
|
Section 162(m) of the Code.
The Committee may determine that Annual Performance Bonuses made to Covered Employees should be structured to be “performance-based compensation” for purposes of Section 162(m) of the Code. If the Committee action granting such Awards or the Award Certificates so provide, this Section 4.4 shall be interpreted in a manner that satisfies the applicable requirements of Section 162(m)(4)(C) of the Code and related regulations, and the Plan shall be operated so that the Company may take a full tax deduction for Annual Performance Bonuses. If any provision of this Plan or any Annual Performance Bonus would otherwise frustrate or conflict with this intent, the provision will be interpreted and deemed amended so as to avoid this conflict.
|
(b)
|
Performance Cycles.
Annual Performance Bonuses will be awarded in connection with a twelve (12) month Performance Cycle, which will be the fiscal year of the Company.
|
(c)
|
Eligible Participants.
Within ninety (90) days after the commencement of a Performance Cycle, the Committee will determine the Reporting Persons who will be eligible to receive an Annual Performance Bonus under the Plan. If an individual becomes a Reporting Person after this ninety (90) day period, the Committee may determine that such Reporting Person is eligible to receive a pro rata Annual Performance Bonus under the Plan.
|
(d)
|
Performance Measures; Targets; Award Criteria.
|
(i)
|
Within ninety (90) days after the commencement of the service period to which a Performance Cycle relates, the Committee will fix and establish in writing (A) the Performance Measures that will apply to that Performance Cycle; (B) the Target Bonus which may be earned by each Participant; and (C) subject to subsection (d) below, the criteria for computing the amount that will be paid with respect to each level of attained performance. The Committee will also set forth the minimum level of performance, based on the applicable Performance Measures, that must be attained during the Performance Cycle before any Annual Performance Bonus will be paid and the percentage of the Target Bonus that will become payable upon attainment of various levels of performance that equal or exceed the minimum required level.
|
(ii)
|
The Committee, in its discretion, may, on a case-by-case basis, reduce, but not increase, the amount otherwise payable to any Covered Employee with respect to any given Performance Cycle, provided, however, that no reduction will result in an increase in the amount payable under any Annual Performance Bonus of another Covered Employee.
|
(e)
|
Payment, Certification.
No Annual Performance Bonus will be paid to any Reporting Person until the Committee certifies in writing the level of performance attained for the Performance Cycle in relation to the applicable Performance Measures. In applying Performance Measures, the Committee (i) shall make adjustments for events listed in Section 5.3 in accordance therewith and (ii) may, in its discretion, exclude the effect of unusual or infrequently occurring items, including, but not limited to the following, as set forth in the Award Certificate or action of the Committee granting the Award: the cumulative effect of changes in the law, regulations or accounting rules, and other items, all determined in accordance with GAAP (to the extent applicable and unless specified otherwise in the Award Certificate or action of the Committee granting the Award) and identified in financial statements, notes to the financial statements or discussion and analysis of management; asset write downs; litigation or claim judgments or settlements; any reorganization and restructuring programs; acquisitions or divestitures; and foreign exchange gains and losses; provided that the determination by the Committee that Performance Measures shall be adjusted for items in accordance with this clause (ii) shall be made no later than ninety (90) days after the commencement of any applicable Performance Cycle in respect of Annual Performance Bonuses awarded to Covered Employees.
|
(f)
|
Form of Payment.
Annual Performance Bonuses will be paid in cash, Shares or such other Awards as determined by the Committee. All such Performance Bonuses shall be paid no later than the 15th day of the third month following the end of the calendar year (or, if later, following the end of the Company's
|
|
|
APPENDIX A
|
|
(g)
|
Acceleration.
Each Participant who is eligible to receive an Annual Performance Bonus with respect to a Performance Cycle during which a Change of Control occurs will, except as otherwise provided below, be deemed to have achieved a level of performance, as of the date of Change in Control, that would cause all (100%) of the Participant's Target Bonus to become payable at such times and in such manner as determined in the sole discretion of the Committee. Notwithstanding the previous sentence, if (i) a surviving entity maintains the Performance Cycle in which a Change in Control occurs, or otherwise provides for the payment of an Annual Performance Bonus based on the level of performance attained for such Performance Cycle in relation to the Performance Measures established for such Performance Cycle (including Performance Measures that were adjusted or modified as a result of the Change in Control) and (ii) the Annual Performance Bonus based on the level of performance attained for such Performance Cycle exceeds all (100%) of the Participant’s Target Bonus, then each Participant who is eligible to receive an Annual Performance Bonus with respect to such Performance Cycle shall receive an Annual Performance Bonus based on the level of performance attained for such Performance Cycle at such times and in such manner as determined in the sole discretion of the Committee, or successor to the Committee. If a Participant’s employment is terminated before the end of the original Performance Cycle due to death, Disability, Normal Retirement, or by the Company without Cause, the Award payable to such Participant may, in the discretion of the Committee, be proportionately reduced based on the period of actual employment during the applicable Performance Cycle. Notwithstanding the above, the time and manner of any payments made pursuant to this Section 4.4(g) shall comply with Section 4.4(e) above.
|
(a)
|
Section 162(m) of the Code.
The Committee may determine that Long-Term Performance Awards made to Covered Employees should be structured to be "performance-based compensation" for purposes of Section 162(m) of the Code. If the Committee action granting such Award or the Award Certificates so provide, this Section 4.5 shall be interpreted in a manner that satisfies the applicable requirements of Section 162(m)(4)(C) of the Code and related regulations with respect to Long-Term Performance awards made to Covered Employees, and the Plan shall be operated so that the Company may take a full tax deduction for Long-Term Performance Awards. If any provision of this Plan or any Long-Term Performance Award would otherwise frustrate or conflict with this intent, the provision will be interpreted and deemed amended so as to avoid this conflict.
|
(b)
|
Performance Cycles.
Long-Term Performance Awards will be awarded in connection with a Performance Cycle, as determined by the Committee in its discretion, provided, however, that a Performance Cycle may be no shorter than twelve (12) months.
|
(c)
|
Eligible Participants.
Within ninety (90) days after the commencement of a Performance Cycle, the Committee will determine the Employees who will be eligible to receive a Long-Term Performance Award for the Performance Cycle, provided that the Committee may determine the eligibility of any Employee other than a Covered Employee after the expiration of this ninety (90) day period.
|
|
|
|
APPENDIX A
|
(d)
|
Performance Measures; Targets; Award Criteria.
|
(i)
|
Within ninety (90) days after the commencement of the service period to which a Performance Cycle relates, the Committee will fix and establish in writing (A) the Performance Measures that will apply to that Performance Cycle; (B) with respect to Performance Units, the Target Amount payable to each Participant; (C) with respect to Restricted Units and Restricted Stock, the Target Vesting Percentage for each Participant; and (D) subject to subsection (d) below, the criteria for computing the amount that will be paid or will vest with respect to each level of attained performance. The Committee will also set forth the minimum level of performance, based on the applicable Performance Measures, that must be attained during the Performance Cycle before any Long-Term Performance Award will be paid or vest, and the percentage of Performance Units that will become payable and the percentage of performance-based Restricted Units or Shares of Restricted Stock that will vest upon attainment of various levels of performance that equal or exceed the minimum required level.
|
(ii)
|
The Committee, in its discretion, may, on a case-by-case basis, reduce, but not increase, the amount of Long-Term Performance Awards otherwise payable to any Covered Employee with respect to any given Performance Cycle, provided, however, that no reduction will result in an increase in the dollar amount or number of Shares payable under any Long-Term Performance Award of another Covered Employee.
|
(e)
|
Payment, Certification.
Long-Term Performance Awards shall only be paid if the Committee certifies in writing the level of performance attained for the Performance Cycle in relation to the applicable Performance Measures. Long-Term Performance Awards awarded to Participants who are not Covered Employees will be based on the Performance Measures, or other applicable performance criteria, and payment formulas that the Committee, in its discretion, may establish for these purposes. These Performance Measures, or other performance criteria, and formulas may be the same as or different than the Performance Measures and formulas that apply to Covered Employees. In applying Performance Measures, the Committee (i) shall make adjustments for events listed in Section 5.3 in accordance therewith and (ii) may, in its discretion, exclude the effect of unusual or infrequently occurring items, including, but not limited to the following, as set forth in the Award Certificate or action of the Committee granting the Award: the cumulative effect of changes in the law, regulations or accounting rules, and other items, all determined in accordance with GAAP (to the extent applicable and unless specified otherwise in the Award Certificate or action of the Committee granting the Award) and identified in financial statements, notes to the financial statements or discussion and analysis of management; asset write downs; litigation or claim judgments or settlements; any reorganization and restructuring programs; acquisitions or divestitures; and foreign exchange gains and losses.; provided that the determination by the Committee that Performance Measures shall be adjusted for items in accordance with this clause (ii) shall be made no later than ninety (90) days after the commencement of any applicable Performance Cycle in respect of Long-Term Performance Awards awarded to Covered Employees.
|
(f)
|
Form of Payment.
Long-Term Performance Awards in the form of Performance Units may be paid in cash or full Shares, in the discretion of the Committee, and as set forth in the applicable Award Certificate. Performance-based Restricted Units and Restricted Stock will be paid in full Shares. Payment with respect to any fractional Share will be in cash in an amount based on the Fair Market Value of the Share as of the date the Performance Unit becomes payable. All Long-Term Performance Awards shall be paid no later than the 15th day of the third month following the end of the calendar year (or, if later, following the end of the Company’s fiscal year) in which such Long-Term Performance Awards are no longer subject to a substantial risk of forfeiture (within the meaning of Code Section 409A), except to the extent that a Participant has elected to defer payment under the terms of a duly authorized deferred compensation arrangement, in which case the terms of such arrangement shall govern, or as otherwise provided in Section 4.5(g) below.
|
(g)
|
Dividend Equivalents
. At the discretion of the Committee and as set forth in the applicable Award Certificate, dividend equivalents may be earned on Long-Term Performance Awards denominated in
|
|
|
APPENDIX A
|
|
(h)
|
Special Vesting Provisions.
Unless the applicable Award Certificate provides otherwise, and subject to the minimum vesting limitations of Section 4.10, upon the death, Disability, Normal Retirement or a Change in Control Termination of a Participant who has an outstanding Long-Term Performance Award, the unvested Long-Term Performance Award will fully vest and be paid as if the Participant had continued in active employment with the Company through the date such Long-Term Performance Award would have vested and been paid in the absence of such event. Unless the applicable Award Certificate provides otherwise, upon the Termination of Employment of a Participant for any reason other than the Participant's death, Disability, Normal Retirement or a Change in Control Termination, the unvested Long-Term Performance Award will be forfeited unless the Participant qualifies for Early Retirement, in which case (subject to the minimum vesting limitations of Section 4.10), a pro rata portion of the Participant’s Long-Term Performance Awards will vest and be paid as if the Participant had continued in active employment with the Company through the date such Long-Term Performance Award would have vested and been paid in the absence of such event; provided that the number of Long-Term Performance Awards held by the Participant which shall vest under those circumstances shall equal the total number of Long-Term Performance Awards in which such Participant would have vested multiplied by a fraction, the numerator of which is the period of time (in whole months) that have elapsed since the date of grant, and the denominator of which is the number of total months set forth in the applicable Award Certificate for such Performance Period.
|
(a)
|
Vesting.
Restrictions on Other Stock-Based Awards granted under this Section 4.6 will lapse at such times and in such manner as determined by the Committee and set forth in the applicable Award Certificate, subject to the minimum vesting limitations of Section 4.10. Unless the applicable Award Certificate provides otherwise, if the restrictions on Other Stock-Based Awards have not lapsed or been satisfied as of the Participant's Termination of Employment, the Shares will be forfeited by the Participant if the termination is for any reason other than the Normal Retirement, death or Disability of the Participant or a Change in Control Termination, except that the Award will vest pro rata with respect to the portion of the vesting term set forth in the applicable Award Certificate that the Participant has completed if the Participant qualified for Early Retirement (subject to the minimum vesting limitations of Section 4.10). All restrictions on Other Stock-Based Awards granted pursuant to this Section 4.6, subject to the minimum vesting limitations of Section 4.10, will lapse upon the Normal Retirement, death or Disability of the Participant or a Change in Control Termination.
|
(b)
|
Grant of Restricted Stock.
The Committee may grant Restricted Stock to any Employee, which Shares will be registered in the name of the Participant and held for the Participant by the Company. The Participant will have all rights of a shareholder with respect to the Shares, including the right to vote and to receive dividends or other distributions (subject to Section 4.6(e)), except that the Shares may be subject to a vesting schedule and will be forfeited if the Participant attempts to sell, transfer, assign, pledge or otherwise encumber or dispose of the Shares before the restrictions are satisfied or lapse.
|
(c)
|
Grant of Restricted Units.
The Committee may grant Restricted Units to any Employee, which Units will be paid in cash or whole Shares or a combination of cash and Shares, in the discretion of the Committee, when the restrictions on the Units lapse and any other conditions set forth in the Award Certificate have been satisfied. For each Restricted Unit that vests, one Share will be paid or an amount in cash equal to the Fair Market Value of a Share as of the date on which the Restricted Unit vests.
|
|
|
|
APPENDIX A
|
(d)
|
Grant of Deferred Stock Units.
The Committee may grant Deferred Stock Units to any Employee, which Units will be paid in whole Shares upon the Employee's Termination of Employment if the restrictions on the Units have lapsed. One Share will be paid for each Deferred Stock Unit that becomes payable.
|
(e)
|
Dividends and Dividend Equivalents.
At the discretion of the Committee and as set forth in the applicable Award Certificate, dividends paid on Shares may, to the extent the underlying Award to which the Shares relate have become fully vested, be paid immediately or withheld and deferred in the Participant's account. In the event of a payment of dividends on the Ordinary Shares, the Committee may credit Restricted Units with Dividend Equivalents in accordance with terms and conditions established in the discretion of the Committee. Dividend Equivalents will be subject to such vesting terms as determined by the Committee and may be distributed immediately or withheld and deferred in the Participant's account as determined by the Committee and set forth in the applicable Award Certificate. Deferred Stock Units may, in the discretion of the Committee and as set forth in the Award Certificate, be credited with Dividend Equivalents or additional Deferred Stock Units. The number of any Deferred Stock Units credited to a Participant’s account upon the payment of a dividend will be equal to the quotient produced by dividing the cash value of the dividend by the Fair Market Value of one Share as of the date the dividend is paid. The Committee will determine any terms and conditions on deferral of a dividend or Dividend Equivalent, including the rate of interest to be credited on deferral and whether interest will be compounded. Notwithstanding anything herein to the contrary, payment of any dividends, Dividend Equivalents or additional Deferred Stock Units granted with respect to an Award shall be subject to the same vesting or performance conditions, as applicable, as the underlying Award.
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(a)
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Notwithstanding anything herein to the contrary, the Nominating Committee shall have the exclusive authority to issue awards to Directors who are not also employees of the Company or any Subsidiary (Director Awards), which may consist of, but not be limited to, Stock Options, Stock Appreciation Rights, or Other Stock-Based Awards. Each Director Award shall be governed by an Award Certificate approved by the Nominating Committee.
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(b)
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The Nominating Committee shall have the exclusive authority to administer Director Awards, and shall have the authority set forth in Section 3.2 and the indemnification set forth in Section 7.7, solely as such provisions apply to the Director Awards. All determinations made by the Nominating Committee hereunder shall be final, binding and conclusive.
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(c)
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Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date Fair Market Value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any Director during any single fiscal year (excluding Awards made at the election of the Director in lieu of all or a portion of annual and committee cash retainers) shall not exceed $750,000.00.
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APPENDIX A
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(a)
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The Shares issuable under the Plan will be authorized but unissued Shares, and, to the extent permissible under applicable law, Shares acquired by the Company, any Subsidiary or any other person or entity designated by the Company and held as treasury shares.
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(b)
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Subject to the counting rules set forth in Section 5.2 and adjustment in accordance with Section 5.3, the total number of Shares with respect to which Awards may be issued under the Plan shall be 26,769,489.
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(c)
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Incentive Stock Options may be granted under the Plan in respect of no more than 10 million Shares.
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APPENDIX A
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(a)
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The total number of Shares with respect to which Awards may be issued under the Plan, as described in Section 5.1(b), shall be reduced by 1.61 Shares per each Share subject to an Award of Restricted Stock, Restricted Units, Deferred Stock Units, Performance Units or Other Stock-Based Awards, or as payment of an Annual Performance Bonus.
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(b)
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The following Shares related to Awards under the Plan will again be available for issuance under the Plan:
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(i)
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Shares related to Awards paid in cash; and
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(ii)
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Shares related to Awards that expire, are forfeited or cancelled or terminate for any other reason without issuance of Shares and any Shares of Restricted Stock that are returned to the Company upon a Participant’s Termination of Employment or, if applicable, a Director’s Termination of Directorship (including, for clarity, at a rate of 1.61 Shares per each Share related to such an Award in the form of Restricted Stock, Restricted Units, Deferred Stock Units, Performance Units or Other Stock-Based Awards, or as payment of an Annual Performance Bonus).
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(c)
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Any Shares issued in connection with Awards that are assumed, converted or substituted as a result of the acquisition of an Acquired Company by the Company or a combination of the Company with another company shall not count against the total number of Shares set forth in Section 5.1(b). Shares available under a stockholder approved plan of an Acquired Company (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan to individuals who were not employees or directors of the Company or a subsidiary prior to the transaction (subject to the stock exchange’s listing requirements)
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(a)
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Acceleration.
Unless the applicable Award Certificate provides otherwise, (i) all outstanding Stock Options and Stock Appreciation Rights will become exercisable as of the effective date of a Participant’s Change in Control Termination if the Awards are not otherwise vested, and all conditions will be waived with respect to outstanding Restricted Stock and Restricted Units (other than Long-Term Performance Awards) and Deferred Stock Units and (ii) each Participant who has been granted a Long-Term Performance Award that is outstanding as of the date of such Participant’s Change in Control Termination will be deemed to have achieved a level of performance, as of the Change in Control Termination, that would cause all (100%) of the Participant's Target Amounts to become payable and all restrictions on the Participant's performance-based Restricted Units and Shares of Restricted Stock to lapse. Unless the Committee determines otherwise in its discretion (either when an Award is granted or any time thereafter), in the event that Awards outstanding as of the date of a Change in Control that are payable in Ordinary Shares of the Company will not be substituted with comparable awards payable or redeemable in shares of publicly-traded stock after the Change in Control, each such outstanding Award (A) will become fully vested (at target, where applicable) immediately prior to the Change in Control and (B)(i) each such Award that is a Stock Option or Stock Appreciation Right with an exercise price below the Fair Market Value of the Shares subject to such Award will be settled in cash, without the Participant’s consent, for an amount equal to the amount that could have been attained upon the exercise of such Award immediately prior to the Change in Control had such Award been exercisable or payable at such time, and (ii) each such Award that is a Stock Option or Stock Appreciation Right with an exercise or grant price above the Fair Market Value of the Shares subject to such Award may be cancelled with no payment without the Participant’s consent.
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APPENDIX A
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(b)
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Permissive Actions
. In addition to the actions described in Section 5.4(a)(A) and (B), in the event of a Change in Control, the Committee may take any one or more of the following actions with respect to any or all outstanding Awards, without the consent of Participants: (i) the Committee may determine that outstanding Stock Options and Stock Appreciation Rights shall be fully vested and exercisable and restrictions on Restricted Stock, Restricted Units, Deferred Stock Units and Other Stock-Based Awards shall lapse as of the date of the Change in Control or such other time (prior to a Participant’s Change in Control Termination) as the Committee determines; (ii) the Committee may require that a Participant surrender his or her outstanding Stock Options and Stock Appreciation Rights in exchange for one or more payments by the Company, in cash or Ordinary Shares, as determined by the Committee, in an amount equal to the amount by which the then Fair Market Value of the Shares subject to the Participant’s unexercised Stock Options and Stock Appreciation Rights exceeds the Exercise Price, if any, and on such terms as the Committee determines; (iii) after giving Participants an opportunity to exercise any outstanding Stock Options and Stock Appreciation Rights, the Committee may terminate any or all unexercised Stock Options and Stock Appreciation Rights at such time as the Committee deems appropriate; (iv) the Committee may determine that Annual Performance Bonuses and/or Long-Term Performance Awards will be paid out at their target level, in cash or Ordinary Shares as determined by the Committee; or (v) the Committee may determine that Awards that remain outstanding after the Change in Control shall be converted to similar grants of, or assumed by, the surviving corporation (or a parent or subsidiary of the surviving corporation or successor). Such acceleration, surrender, termination, settlement, payment or conversion shall take place as of the date of the Change in Control or such other date as the Committee determines. The Committee may specify how an Award will be treated in the event of a Change in Control either when the Award is granted or at any time thereafter.
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(a)
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The adoption of a resolution of the Board terminating the Plan; or
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(b)
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The day before the tenth (10
th
) anniversary of the approval of the Plan by the Company’s shareholders as described in Section 1.2.
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APPENDIX A
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(a)
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Any Award may be transferred by will or by the laws of descent or distribution.
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(b)
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Unless the applicable Award Certificate provides otherwise, all or any part of a Nonqualified Stock Option or Shares of Restricted Stock may be transferred to a family member without consideration. For purposes of this subsection (b), "family member" includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Participant, including adoptive relationships, any person sharing the Participant's household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting interests.
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(c)
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Unless the applicable Award Certificate provides otherwise, any Nonqualified Stock Option transferred by a Participant pursuant to subsection (b) may be exercised by the transferee only to the extent that the Award would have been exercisable by the Participant had no transfer occurred. The transfer of Shares upon exercise of the Award will be conditioned on the payment of any withholding tax.
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(d)
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Restricted Stock may be freely transferred after the restrictions lapse or are satisfied and the Shares are delivered, provided, however, that Restricted Stock awarded to an affiliate of the Company may be transferred only pursuant to Rule 144 under the Securities Act, or pursuant to an effective registration for resale under the Securities Act. For purposes of this subsection (d), "affiliate" will have the meaning assigned to that term under Rule 144.
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(e)
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In no event may a Participant transfer an Incentive Stock Option other than by will or the laws of descent and distribution.
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(a)
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Stock Options and Stock Appreciation Rights.
As a condition to the delivery of Shares pursuant to the exercise of a Stock Option or Stock Appreciation Right, the Committee may require that the Participant, at the time of exercise, pay to the Company by cash, certified check, bank draft, wire transfer or postal or express money order an amount sufficient to satisfy any applicable tax withholding obligations. The Committee may also, in its discretion, accept payment of the minimum tax withholding obligations through any of the Exercise Price payment methods described in Section 4.3(d).
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(b)
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Other Awards Payable in Shares.
The Participant shall satisfy the Participant's tax withholding obligations arising in connection with the release of restrictions on Restricted Units, Restricted Stock and Other Stock-Based Awards by payment to the Company in cash or by certified check, bank draft,
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APPENDIX A
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(c)
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Cash Awards.
The Company may satisfy a Participant's tax withholding obligation arising in connection with the payment of any Award in cash by withholding cash from such payment.
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APPENDIX A
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(a)
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Modifications to or Adjustments of Awards
. Any modifications to an Award pursuant to Subsection 3.2(g) or adjustments of an Award pursuant to Subsections 4.8 or 5.3 shall comply with the requirements of Section 409A.
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(b)
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Specified Employees
. Payments to any Participant who is a “specified employee” of deferred compensation that is subject to Code Section 409A(a)(2) and that becomes payable upon, or that is accelerated upon, such Participant’s Termination of Employment (as modified by Subsection 7.12(b)(iv)), shall not be made on or before the date which is six (6) months following such Participant’s Termination of Employment (or, if earlier, such Participant’s death). A specified employee for this purpose shall be determined by the Committee or its delegate in accordance with the provisions of Code Section 409A and the regulations and rulings thereunder.
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APPENDIX A
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Address Changes/Comments:
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
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c/o Mallinckrodt plc
Company Secretary
3 Lotus Park, The Causeway,
Staines-Upon-Thames, Surrey TW18 3AG
United Kingdom
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VOTE BY INTERNET - www.proxyvote.com
Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. U.S. Eastern Time on May 15, 2018. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please follow the instructions above to vote using the internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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VOTE BY PHONE – 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. U.S. Eastern Time on May 15, 2018. Have your proxy card in hand when you call and then follow the instructions.
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to Mallinckrodt plc, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, or to Mallinckrodt plc, College Business & Technology Park, Cruiserath, Blanchardstown, Dublin 15, Ireland, in each case at least 48 hours before the meeting.
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If you transmit your voting instructions by the internet or by telephone, you do NOT need to mail back your proxy card
.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS
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KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
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For
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Against
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Abstain
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NOMINEES:
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||||
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1a. David R. Carlucci
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¨
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¨
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¨
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1b. J. Martin Carroll
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¨
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¨
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¨
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1c. Paul R. Carter
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¨
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¨
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¨
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1d. David Y. Norton
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¨
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¨
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¨
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1e. JoAnn A. Reed
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¨
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¨
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¨
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1f. Angus C. Russell
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¨
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¨
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¨
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1g. Mark C. Trudeau
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¨
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¨
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¨
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1h. Anne C. Whitaker
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¨
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¨
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¨
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1i. Kneeland C. Youngblood, M.D.
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¨
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¨
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¨
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1j. Joseph A. Zaccagnino
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¨
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¨
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¨
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For
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Against
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Abstain
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Item 2
- Approve, in a non-binding vote, the re-appointment of the Independent Auditors and to authorize, in a binding vote, the Audit Committee to set the auditors’ remuneration.
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¨
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¨
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¨
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Item 3
- Approve, in a non-binding advisory vote, the compensation of named executive officers.
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¨
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¨
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¨
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Item 4
- Approve the Amended and Restated Mallinckrodt Pharmaceuticals Stock and Incentive Plan
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¨
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¨
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¨
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Item 5
- Approve the authority of the Board to issue shares.
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¨
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¨
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¨
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Item 6
- Approve the waiver of pre-emption rights. (Special Resolution).
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¨
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¨
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¨
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Item 7
- Authorize the Company and/or any subsidiary to make market purchases or overseas market purchases of Company shares.
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¨
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¨
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¨
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Item 8
- Authorize the price range at which the Company can re-allot shares it holds as treasury shares. (Special Resolution).
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¨
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¨
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¨
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Please indicate if you plan to attend the meeting.
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Yes
¨
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No
¨
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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