UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14C

(Rule 14c-101)

 

INFORMATION REQUIRED IN INFORMATION STATEMENT

 

SCHEDULE 14C INFORMATION

 

Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934

Check the appropriate box:

x

Preliminary Information Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))

o

Definitive Information Statement

 

RADIUS HEALTH, INC.

 

(Name of Registrant As Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

x

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o

Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11

(1)

Title of each class of securities to which transaction applies:

 

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(2)

Aggregate number of securities to which transaction applies:

 

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(3)

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(4)

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(5)

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o

Fee paid previously with preliminary materials.

o

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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(4)

Date Filed:

 

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Radius Health, Inc.

201 Broadway, 6th Floor
Cambridge, MA 02139

 

INFORMATION STATEMENT NOTICE

 

WE ARE NOT ASKING YOU FOR A PROXY AND

YOU ARE REQUESTED NOT TO SEND US A PROXY

 

Dear Stockholders:

 

The purpose of this notice and attached Information Statement is to inform you of the following actions taken by the Board of Directors of Radius Health, Inc. (the “Company,” “we” or “us”) and the majority stockholders of the Company as discussed below, each of which will become effective on or after February      , 2012, the date that is twenty-one (21) calendar days after the date this Information Statement was first mailed to our stockholders:

 

1.               On January 31, 2012, the Company’s Board of Directors (the “Board”) adopted and approved:

 

·                  amendments (collectively, the “Charter Amendment”) to the Certificate of Designations of the Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock, Series A-5 Convertible Preferred Stock and Series A-6 Convertible Preferred Stock of the Company relating to, among other things, the dividend rights of the Company’s Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and Series A-3 Convertible Preferred Stock and the conversion of the Company’s preferred stock, all as more specifically set forth in the Charter Amendment;

 

·                  an amendment (the “Plan Amendment”) to the Company’s 2011 Equity Incentive Plan (as amended, the “2011 Plan”), providing for an increase, effective on the date on which the Company’s common stock becomes listed on a national securities exchange, in the number of shares of Common Stock eligible for issuance thereunder from 4,252,953 to 5,002,953, as further described in the Information Statement; and

 

·                  the Restated Certificate of Incorporation of the Company (the “Restated Certificate”) to serve as the certificate of incorporation for the Company from and after the date on which the Company’s common stock becomes listed on a national securities exchange, which Restated Certificate will, among other things, (i) authorize the Board to establish the rights, preferences and restrictions on any unissued series of preferred stock, (ii) provide for a classified board of directors, and (iii) require that all stockholder action be taken by a vote of the stockholders at an annual or special meeting and deny the right of stockholders to call a special meeting of stockholders, all as more specifically set forth in the Restated Certificate

 

2.               On February      , 2012, we received the written consent, in lieu of a meeting of stockholders, of (i) the holders of shares of the Company’s Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and/or Series A-3 Convertible Preferred Stock representing at least 70% of the voting power of the shares of the Company’s Series A-1 Convertible

 



 

Preferred Stock, Series A-2 Convertible Preferred Stock and Series A-3 Convertible Preferred Stock then outstanding and (ii) a majority of the outstanding shares of the Company’s common stock, on an as-converted basis, approving the Charter Amendment, the Plan Amendment and the Restated Certificate.

 

A copy of each of the stockholder consent, the Charter Amendment, the 2011 Plan and the Restated Certificate is attached to this Information Statement as Exhibit A, Exhibit B, Exhibit C and Exhibit D, respectively.  We anticipate filing a Certificate of Amendment setting forth the Charter Amendment with the Secretary of State of the State of Delaware on or about February      , 2012.  We do not anticipate filing the Restated Certificate with the Secretary of State of the State of Delaware until the date on which the Company’s common stock becomes listed on a national securities exchange.

 

Pursuant to the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), an Information Statement must be provided to the holders of voting stock of the Company who did not receive a consent solicitation pursuant to section 14(a) of the Exchange Act regarding the actions set forth in the consent.  This notice and Information Statement will also be considered the notice required by Section 228(e) of the General Corporation Law of the State of Delaware (“DGCL”).  You are encouraged to read the attached Information Statement, including the exhibits, for further information regarding this action.

 

This Information Statement is solely for your information and does not require or request you to do anything.  This is not a notice of a meeting of stockholders and no stockholders’ meeting will be held to consider the matters described in the Information Statement.

 

 

By Order of the Board of Directors,

 

 

 

 

 

Michael S. Wyzga

 

President and Chief Executive Officer

 

Cambridge, Massachusetts

February      , 2012

 



 

INFORMATION STATEMENT

 

Radius Health, Inc. (the “Company,” “we” or “us”) is mailing this Information Statement to you, as a holder of shares of our capital stock, to provide you with information regarding the actions described below that were taken by written consent in lieu of a special meeting of stockholders by the holders of shares of our Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and/or Series A-3 Convertible Preferred Stock representing at least 70% of the voting power of the shares of our Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and Series A-3 Convertible Preferred Stock outstanding (the “Senior Majority”) and a majority of the outstanding shares of our common stock on an as-converted basis, each of which will become effective on or after February      , 2012, the date that is twenty-one (21) calendar days after the date this Information Statement was first mailed to our stockholders.

 

On January 31, 2012, the Company’s Board of Directors (the “Board”) adopted and approved:

 

·                  amendments (collectively, the “Charter Amendment”) to the Certificate of Designations of the Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock, Series A-5 Convertible Preferred Stock and Series A-6 Convertible Preferred Stock of the Company relating to, among other things, the dividend rights of the Company’s Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and Series A-3 Convertible Preferred Stock and the conversion of the Company’s preferred stock, all as more specifically set forth in the Charter Amendment;

 

·                  an amendment (the “Plan Amendment”) to the Company’s 2011 Equity Incentive Plan (as amended, the “2011 Plan”), providing for an increase, effective on the date on which the Company’s common stock becomes listed on a national securities exchange, in the number of shares of Common Stock eligible for issuance thereunder from 4,252,953 to 5,002,953, as further described in the Information Statement; and

 

·                  the Restated Certificate of Incorporation of the Company (the “Restated Certificate”) to serve as the certificate of incorporation for the Company from and after the date on which the Company’s common stock becomes listed on a national securities exchange, which Restated Certificate will, among other things, (i) authorize the Board to establish the rights, preferences and restrictions on any unissued series of preferred stock, (ii) provide for a classified board of directors, and (iii) require that all stockholder action be taken by a vote of the stockholders at an annual or special meeting and deny the right of stockholders to call a special meeting of stockholders, all as more specifically set forth in the Restated Certificate.

 

On February      , 2012, the holders of:

 

·                  shares of the Company’s Series A-1 Convertible Preferred Stock outstanding on January      , 2012 (the “Record Date”);

 



 

·                  shares of the Company’s Series A-2 Convertible Preferred Stock outstanding on the Record Date; and

 

·                  shares of the Company’s Series A-3 Convertible Preferred Stock outstanding on the Record Date;

 

representing approximately      % of the outstanding shares, as of the Record Date, of the Company’s Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and Series A-3 Convertible Preferred Stock outstanding, collectively, and approximately      % of the outstanding shares, on the Record Date, of our common stock on an as-converted basis, executed a written consent in accordance with Section 228 of the DGCL and the Company’s bylaws approving the Charter Amendment, the Plan Amendment and the Restated Certificate.

 

WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.

 

This Information Statement is being mailed on or about February      , 2012 to stockholders of record on the Record Date.  On the Record Date, there were:

 

·                        675,897 shares of our common stock outstanding; and

 

·                        2,075,488 shares of our Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), outstanding, consisting of:

 

·                                          939,612 shares of Series A-1 Convertible Preferred Stock;

·                                          983,208 shares of Series A-2 Convertible Preferred Stock;

·                                          142,227 shares of Series A-3 Convertible Preferred Stock;

·                                          3,998 shares of Series A-4 Convertible Preferred Stock; and

·                                          6,443 shares of Series A-5 Convertible Preferred Stock.

 

Each share of Preferred Stock is convertible into 10 shares of common stock.  Under the terms of the DGCL and our certificate of incorporation, the affirmative vote of the holders of at least the Senior Majority and of a majority of our outstanding shares of common stock on an as-converted basis was required to approve the Charter Amendment and the Restated Certificate.  Under the terms of the 2011 Plan, the affirmative vote of the holders of a majority of our outstanding shares of common stock on an as-converted basis was required to approve the Plan Amendment and, under the terms of the Internal Revenue Code of 1986, as amended (the “Code”), the affirmative vote of the holders of a majority of our outstanding shares of common stock on an as-converted basis was required to enable us to grant incentive stock options (as defined in the Code) under the 2011 Plan.

 

On the Record Date:

 

·                  1,445,533 shares of Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and/or Series A-3 Convertible Preferred Stock constituted the Senior Majority; and

 

·                  10,715,389 shares of common stock constituted a majority of the outstanding shares of our common stock on an as-converted basis.

 

This is not a notice of a special meeting of stockholders and no stockholders meeting will be held to consider any matter described in this Information Statement.

 

2



 

The stockholders representing the Senior Majority and holding a majority of the outstanding shares of our common stock on an as-converted basis have voted to approve the Charter Amendment and the Restated Certificate, which vote is sufficient to satisfy the stockholder vote requirement for those actions.  The stockholders holding a majority of the outstanding shares of our common stock on an as-converted basis have voted to approve the Plan Amendment, which vote is sufficient to satisfy the stockholder vote requirement for that action.  Accordingly, no additional votes will be needed to approve these matters.

 

3



 

ACTION 1—CERTIFICATE OF AMENDMENT TO CERTIFICATE OF DESIGNATIONS

 

Proposal and Background Information

 

The Charter Amendment was adopted and approved by the Board on January 31, 2012, and approved by our stockholders on February      , 2012, as further described above, to:

 

·                  specify that dividends on outstanding shares of the Company’s Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock and Series A-3 Convertible Preferred Stock accrue on a daily basis;

 

·                  clarify that the Board has the discretion to pay such accrued dividends in cash or through the issuance of shares of the Company’s common stock upon the conversion of the Company’s preferred stock; and

 

·                  clarify procedural mechanics regarding the conversion of the Company’s preferred stock, including the treatment of fractional shares resulting from the application of conversion ratios and the manner in which shares of multiple series of preferred stock surrendered for conversion by a single holder are to be treated.

 

This description of the Charter Amendment is intended to be a summary only and is qualified in its entirety by the terms of the Charter Amendment attached to this Information Statement as Exhibit B, which is incorporated herein by reference.

 

Under the terms of the DGCL and our certificate of incorporation, the affirmative vote of the holders of at least the Senior Majority and of a majority of our outstanding shares of common stock on an as-converted basis was required to approve the Charter Amendment.

 

Reasons for the Charter Amendment

 

The Charter Amendment effects changes to our certificate of incorporation that are desirable to clarify the application of certain provisions thereof and address potential ambiguities in connection with the conversion of shares of convertible preferred stock.

 

Effectiveness of Restated Certificate

 

The Charter Amendment will become effective upon the filing of a Certificate of Amendment setting forth the Charter Amendment with the Secretary of State of the State of Delaware, which the Company intends to file on or after the date of expiration of the 20-day period commencing on the date of mailing of this Information Statement to our stockholders as required under Rule 14c-2 under the Exchange Act.

 

4



 

ACTION 2—AMENDMENT TO 2011 EQUITY INCENTIVE PLAN

 

Proposal and Background Information

 

The Plan Amendment was recommended by our Compensation Committee of the Board and adopted and approved by the Board on January 31, 2012, and approved by our stockholders on February        , 2012, as further described above, to increase the number of shares of our common stock eligible for issuance thereunder from 4,252,953 to 5,002,953.

 

This description of the Plan Amendment is intended to be a summary only and is qualified in its entirety by the terms of the 2011 Plan attached to this Information Statement as Exhibit C, which is incorporated herein by reference.

 

Under the terms of the 2011 Plan, the affirmative vote of the holders of a majority of our outstanding shares of common stock on an as-converted basis was required to approve the Plan Amendment and, under the terms of the Internal Revenue Code of 1986, as amended (the “Code”), the affirmative vote of the holders of a majority of our outstanding shares of common stock on an as-converted basis was required to enable us to grant incentive stock options (as defined in the Code) under the 2011 Plan.

 

Reasons for the Plan Amendment

 

The Plan Amendment will allow the Company to issue additional stock-based awards to employees, consultants and non-employee directors of the Company and its affiliates, allowing the Company to attract and retain qualified individuals to serve in these positions.

 

Effectiveness of Plan Amendment

 

The Plan Amendment will become effective upon the later to occur of (i) the date on which the Company’s common stock becomes listed on a national securities exchange and (ii) the expiration of the 20-day period commencing on the date of mailing of this Information Statement to our stockholders as required under Rule 14c-2 under the Exchange Act.

 

5



 

ACTION 3—RESTATED CERTIFICATE OF INCORPORATION

 

Proposal and Background Information

 

The Restated Certificate was adopted and approved by the Board on January 31, 2012, and approved by our stockholders on February      , 2012, as further described above, to, among other things, (i) authorize the Board to establish the rights, preferences and restrictions on any unissued series of preferred stock, (ii) provide for a classified board of directors, (iii) establish the vote required for the removal of directors, (iv) require that all stockholder action be taken by a vote of the stockholders at an annual or special meeting and deny the right of stockholders to call a special meeting of stockholders, (v) limit the personal liability of directors to the Company and its stockholders, and (vi) effect certain other changes, all as more specifically described below.  Under the terms of the DGCL and our certificate of incorporation, the affirmative vote of the holders of at least the Senior Majority and of a majority of our outstanding shares of common stock on an as-converted basis was required to approve the Restated Certificate.

 

The Restated Certificate includes several defensive provisions.  These defensive measures could have the effect of rendering more difficult or discouraging a merger, tender offer or other takeover attempt that some, or a majority, of the Company’s stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then current market price of such stock.  The Company’s management is not aware of any current effort to accumulate shares of the Company’s common stock or to otherwise obtain control of the Company.  Rather, the defensive provisions included in the Restated Certificate are being proposed at this time in order to protect our and our stockholders’ interests and preserve the long-term value of the Company.

 

The following description of the Restated Certificate is intended to be a summary only and is qualified in its entirety by the terms of the Restated Certificate attached to this Information Statement as Exhibit D, which is incorporated herein by reference.

 

Summary

 

Common Stock.  The Restated Certificate will provide that the holders of the Company’s common stock will be entitled to one vote for each share on all matters voted on by stockholders, including elections of directors.  However, because of the ability of the Board to designate shares of preferred stock, and to determine the rights of such shares of preferred stock, from time to time, the holders of common stock may in the future share voting power with any shares of any such series of preferred stock, which the Company may designate and issue.  The Restated Certificate does not provide for cumulative voting in the election of directors.

 

Subject to any preferential rights of any outstanding series of the Company’s preferred stock created by the Board from time to time, the holders of common stock will be entitled to such dividends as may be declared from time to time by the Board from funds available therefor and upon liquidation will be entitled to receive pro rata all assets available for distribution to such holders.  The holders of the Company’s common stock will have no preemptive rights.

 

The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which the Company may designate and issue in the future.

 

Preferred Stock.  The Restated Certificate authorizes the Board to establish one or more series of the Company’s preferred stock and to determine, with respect to any series of the Company’s preferred stock the terms, rights, preferences and limitations of such series.

 

6



 

The authorized shares of the Company’s preferred stock, as well as shares of the Company’s common stock, will be available for issuance without further action by the Company’s stockholders, unless such action is required by applicable law or the rules of any stock exchange on which the Company’s securities may be listed.  If the approval of the Company’s stockholders is not required for the issuance of shares of preferred stock or common stock, the Board may determine not to seek such stockholder approval.

 

Although the Board has no intention at the present time of doing so, the Board could issue a series of preferred stock that could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt.  The Board will make any determination to issue such shares based on its judgment as to the best interests of the Company and its stockholders.  The Board, in so acting, could issue a series of preferred stock having terms that could discourage an acquisition attempt through which an acquiror may be able to change the composition of the Board, including a tender offer or other transaction that some, or a majority, of the Company’s stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then current market price of such stock.

 

Bylaws.  The Restated Certificate provides that the Board will have the power to adopt, amend, alter or repeal the Company’s bylaws.  The stockholders may only adopt, amend, alter or repeal the Company’s bylaws by the affirmative vote of the holders of at least two-thirds in voting power of the shares of capital stock of the Company entitled to vote thereon.

 

Board of Directors.  The Restated Certificate provides that the number of the Company’s directors will be established by the Board.  The Company’s directors will be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 2012, another class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 2013 and another class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 2014, with each director to hold office until his or her successor is duly elected and qualified. Commencing with the 2012 annual meeting of stockholders, directors elected to succeed directors whose terms then expire will be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until such person’s successor is duly elected and qualified.

 

The Restated Certificate provides that, except as otherwise provided for in a certificate of designations setting forth the rights of the holders of any series of the Company’s preferred stock, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board resulting from death, resignation, removal or otherwise will be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, and not by the stockholders.  Any director elected in accordance with the preceding sentence will hold office for the remainder of the term and until such director’s successor shall have been duly elected and qualified.  Subject to the rights of holders of the Company’s preferred stock, no director may be removed from office by the stockholders except for cause and only by the affirmative vote of the holders of at least two-thirds in voting power of the shares of capital stock of the Company entitled to vote thereon.

 

These provisions would preclude a third party from removing incumbent directors and simultaneously gaining control of the Board by filling the vacancies created by removal with its own nominees.  Under the classified board provisions described above, it would take at least two elections of directors for any individual or group to gain control of the Board.  Accordingly, these provisions could discourage a third party from initiating a proxy contest, making a tender offer or otherwise attempting to gain control of the Company.  These provisions apply to all elections of directors and not just to elections

 

7



 

following a change of control.  As a result, these provisions also have the effect of making it more difficult for stockholders to change a majority of the directors even if the only reason for the change may be the performance of the present directors.

 

Special Meetings and Stockholder Action by Written Consent.  The Restated Certificate provides that any action required or permitted to be taken by the Company’s stockholders must be affected at a duly called annual or special meeting of such stockholders and may not be affected by any consent in writing by such stockholders.  Special meetings of the Company’s stockholders for any purpose or purposes may be called only by the Board, the chairperson of the Board, the chief executive officer or the president, and any power of stockholders to call a special meeting is specifically denied.  No business other than that stated in the notice shall be transacted at any special meeting.

 

Limitation of Liability.  The Restated Certificate provides, consistent with the DGCL, that a director of the Company shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent the DGCL prohibits the elimination of limitation of liability of directors for breaches of fiduciary duty.  Neither the amendment nor repeal of such provision will eliminate or reduce its effect in respect of any matter, cause of action, suit or claim arising or occurring prior to such amendment or repeal.

 

Future Changes to Restated Certificate.  In the Restated Certificate the Company reserves the right to amend, alter, change or repeal any provision of the Restated Certificate as prescribed by law and the Restated Certificate.  The Restated Certificate further provides that the affirmative vote of the holders of at least two-thirds in voting power of the capital stock of the Company entitled to vote thereon is required to amend provisions of the Restated Certificate relating to, among other things, (1) the adoption, amendment, alteration or repeal of the Company’s bylaws, (2) the number, election and term of the Company’s directors, (3) the nomination of director candidates and the proposal of business by stockholders, (4) the filling of vacancies on the Board of Directors, (5) the removal of directors, (6) action by written consent of stockholders, (7) calling of special meetings, and (8) the selection of the Court of Chancery of the State of Delaware as the exclusive forum for certain legal actions.

 

Reasons for the Restated Certificate

 

We believe the Restated Certificate will allow us to more effectively raise additional capital needed for the development of our business, attract and retain qualified candidates to serve as directors, officers and employees of the Company, and otherwise serve our and our stockholders’ best interests.

 

Effectiveness of Restated Certificate

 

The Restated Certificate will become effective upon filing with the Secretary of State of the State of Delaware, subject to the conversion of all outstanding shares of convertible preferred stock into common stock.  The Company intends to file the Restated Certificate with the Secretary of State of the State of Delaware upon the later to occur of (i) the date on which the Company’s common stock becomes listed on a national securities exchange and the conversion into common stock of all outstanding preferred stock and (ii) the expiration of 20 days after the mailing of this Information Statement to our stockholders as required under Rule 14c-2 under the Exchange Act.

 

8



 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information regarding beneficial ownership of our common stock as of February 1, 2012 by: (i) each person known by the Company to be the beneficial owner calculated in accordance with Rule 13d-3(d)(1) promulgated under the Exchange Act of more than 5% of the outstanding shares of common stock; (ii) each director and executive officer of the Company; and (iii) all officers and directors as a group.  Unless otherwise stated in the table or its footnotes, the person and entities listed below have the sole voting power and investment power with respect to the shares set forth next to one’s name. Unless otherwise noted, the address of each stockholder below is c/o Radius Health, Inc., 201 Broadway, 6th Floor, Cambridge, MA 02139.

 

Name, (Title) and Address

 

Shares Beneficially
Owned

 

Title of
Class

 

Percentage of
Class(1)(a)

 

Percentage of
Converted
Common
Stock(1)(b)

 

 

 

 

 

 

 

 

 

 

 

Michael S. Wyzga
(Chief Executive Officer, President and Director)

 

0

 

 

 

0

%

0

%

 

 

 

 

 

 

 

 

 

 

C. Richard Lyttle, Ph.D.
(Chief Scientific Officer)

 

608,009

(2)

Common Stock

 

49.9

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

2.8

%

 

 

 

 

 

 

 

 

 

 

B. Nicholas Harvey
(Senior Vice President, Chief Financial Officer, Treasurer and Secretary)

 

186,629

(3)

Common Stock

 

22.4

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

Louis Brenner
(Senior Vice President and Chief Medical Officer)

 

0

 

 

 

0

%

0

%

 

 

 

 

 

 

 

 

 

 

Gary Hattersley
(Vice President of Biology)

 

89,579

(4)

Common Stock

 

11.7

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.4

%

 

 

 

 

 

 

 

 

 

 

Dr. Ansbert K. Gadicke (Director)

 

8,397,070

(5)

Common Stock

 

92.6

%

 

 

 

 

384,261

(6)

Series A-1 Preferred Stock

 

40.9

%

 

 

 

 

402,155

(7)

Series A-2 Preferred Stock

 

40.9

%

 

 

 

 

53,331

(8)

Series A-3 Preferred Stock

 

37.5

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

39.2

%

 

 

 

 

 

 

 

 

 

 

Alan H. Auerbach (Director)

 

128,332

(9)

Common Stock

 

16.0

%

 

 

 

9



 

Name, (Title) and Address

 

Shares Beneficially
Owned

 

Title of
Class

 

Percentage of
Class(1)(a)

 

Percentage of
Converted
Common
Stock(1)(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.6

%

 

 

 

 

 

 

 

 

 

 

Jonathan J. Fleming (Director)

 

1,364,834

(10)

Common Stock

 

67.4

%

 

 

 

 

109,718

(11)

Series A-2 Preferred Stock

 

11.2

%

 

 

 

 

25,233

(12)

Series A-3 Preferred Stock

 

17.7

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

6.4

%

 

 

 

 

 

 

 

 

 

 

Kurt C. Graves (Director)

 

64,168

(13)

Common Stock

 

8.7

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

Dr. Martin Münchbach (Director)

 

1,896,980

(14)

Common Stock

 

73.7

%

 

 

 

 

84,536

(15)

Series A-1 Preferred Stock

 

9.0

%

 

 

 

 

105,162

(16)

Series A-2 Preferred Stock

 

10.7

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

8.9

%

 

 

 

 

 

 

 

 

 

 

Dr. Elizabeth Stoner (Director)

 

15,000

(17)

Common Stock

 

2.2

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

Entities affiliated with

 

 

 

 

 

 

 

 

 

MPM BioVentures III, L.P. 

c/o MPM Capital

200 Clarendon St., 54th Fl.

Boston, MA 02116

 

8,397,070

(18)

Common Stock

 

92.6

%

 

 

 

 

384,261

(19)

Series A-1 Preferred Stock

 

40.9

%

 

 

 

 

402,155

(20)

Series A-2 Preferred Stock

 

40.9

%

 

 

 

 

53,331

(21)

Series A-3 Preferred Stock

 

37.5

%

 

 

 

10



 

Name, (Title) and Address

 

Shares Beneficially
Owned

 

Title of
Class

 

Percentage of
Class(1)(a)

 

Percentage of
Converted
Common
Stock(1)(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Converted Common Stock

 

 

 

39.2

%

 

 

 

 

 

 

 

 

 

 

The Wellcome Trust Limited as trustee of The Wellcome Trust

215 Euston Road

London NW1 2BE

England

 

2,868,910

(22)

Common Stock

 

80.9

%

 

 

 

 

76,566

(23)

Series A-1 Preferred Stock

 

8.1

%

 

 

 

 

210,325

 

Series A-2 Preferred Stock

 

21.4

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

13.4

%

 

 

 

 

 

 

 

 

 

 

HealthCare Ventures VII, L.P. 

55 Cambridge Parkway

Suite 102

Cambridge, MA 02142

 

2,292,053

(24)

Common Stock

 

79.5

%

 

 

 

 

58,953

(25)

Series A-1 Preferred Stock

 

6.3

%

 

 

 

 

98,278

 

Series A-2 Preferred Stock

 

10.0

%

 

 

 

 

63,663

 

Series A-3 Preferred Stock

 

44.8

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

10.7

%

 

 

 

 

 

 

 

 

 

 

Entities affiliated with

 

 

 

 

 

 

 

 

 

Saints Capital VI, L.P. 

475 Sansome Street

Suite 1850

San Francisco, CA 94111

 

1,856,104

(26)

Common Stock

 

73.5

%

 

 

 

 

49,127

(27)

Series A-1 Preferred Stock

 

5.2

%

 

 

 

 

109,718

(28)

Series A-2 Preferred Stock

 

11.2

%

 

 

 

 

25,233

(29)

Series A-3 Preferred Stock

 

17.7

%

 

 

 

11



 

Name, (Title) and Address

 

Shares Beneficially
Owned

 

Title of
Class

 

Percentage of
Class(1)(a)

 

Percentage of
Converted
Common
Stock(1)(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Converted Common Stock

 

 

 

8.7

%

 

 

 

 

 

 

 

 

 

 

BB Biotech Ventures II, L.P.

Traflagar Court

Les Banques

St. Peter Port

Guernsey

Channel Islands

GY1 3QL

 

1,896,980

(30)

Common Stock

 

73.7

%

 

 

 

 

84,536

(31)

Series A-1 Preferred Stock

 

9.0

%

 

 

 

 

105,162

 

Series A-2 Preferred Stock

 

10.7

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

8.9

%

 

 

 

 

 

 

 

 

 

 

Entities affiliated with

 

 

 

 

 

 

 

 

 

Oxford Bioscience Partners

222 Berkley Street

Suite 1650

Boston, MA 02116

 

1,364,834

(32)

Common Stock

 

67.4

%

 

 

 

 

109,718

(33)

Series A-2 Preferred Stock

 

11.2

%

 

 

 

 

25,233

(34)

Series A-3 Preferred Stock

 

17.7

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

6.4

%

 

 

 

 

 

 

 

 

 

 

Healthcare Private Equity Limited Partnership

Edinburgh One

Morrison Street

Edinburgh EH3 8BE

U.K.

 

765,020

(35)

Common Stock

 

53.1

%

 

 

 

 

20,416

 

Series A-1 Preferred Stock

 

2.2

%

 

 

 

 

56,086

 

Series A-2 Preferred Stock

 

5.7

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

3.6%

 

 

12



 

Name, (Title) and Address

 

Shares Beneficially
Owned

 

Title of
Class

 

Percentage of
Class(1)(a)

 

Percentage of
Converted
Common
Stock(1)(b)

 

 

 

 

 

 

 

 

 

 

 

Brookside Capital Partners Fund, L.P.

Bain Capital, LLC

111 Huntington Avenue

Boston, MA 02199

 

1,228,200

(36)

Common Stock

 

64.5

%

 

 

 

 

122,820

 

Series A-1 Preferred Stock

 

13.1

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

Biotech Growth N.V. 
Asset Management BAB N.V.
Ara Hill Top Building,
Unit A-5
Pletterijweg Oost 1
Curaçao, Dutch Caribbean

 

1,228,200

(37)

Common Stock

 

64.5

%

 

 

 

 

122,820

 

Series A-1 Preferred Stock

 

13.1

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

Ipsen Pharma SAS
65, quai Georges Gorse
92100 Boulogne Billancourt
France

 

173,260

(38)

Common Stock

 

20.4

%

 

 

 

 

17,326

 

Series A-1 Preferred Stock

 

1.8

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.8

%

 

 

 

 

 

 

 

 

 

 

Stavros C. Manolagas
35 River Ridge Circle
Little Rock, AR 72227

 

91,040

 

Common Stock

 

13.5

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.4

%

 

 

 

 

 

 

 

 

 

 

Nordic Bioscience
Herlev Hovedgade 207
2730 Herlev
Denmark

 

64,430

(39)

Common Stock

 

8.7

%

 

 

 

 

6,443

 

Series A-5 Preferred Stock

 

100

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.3

%

 

13



 

Name, (Title) and Address

 

Shares Beneficially
Owned

 

Title of
Class

 

Percentage of
Class(1)(a)

 

Percentage of
Converted
Common
Stock(1)(b)

 

 

 

 

 

 

 

 

 

 

 

Louis O’Dea
566 Main Street
Hingham, MA 02043

 

193,087

(40)

Common Stock

 

23.0

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

Michael Rosenblatt
130 Lake Ave
Newton, MA 02459

 

44,768

(41)

Common Stock

 

6.6

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

Patricia Rosenblatt
876 Beacon Street, Apt. No. 5
Newton, MA 02459

 

41,357

 

Common Stock

 

6.1

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

John Katzenellenbogen Trust
704 West Pennsylvania Avenue
Urbana, Illinois 61801

 

56,065

(42)

Common Stock

 

6.0

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

Chris Miller
11 Edgar Walker Court
Hingham, MA 02043

 

63,853

 

Common Stock

 

9.4

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

John Thomas Potts, Jr.
Massachusetts General Hospital
149 13th Street, MC 1494005
Charlestown, MA 02129-2000

 

70,632

(43)

Common Stock

 

7.4

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

All Officers and Directors as a group (11 individuals)

 

12,750,601

 

Common Stock

 

95.8

%

 

 

 

 

 

 

Converted Common Stock

 

 

 

56.9

%

 


 (1)(a)                 Because shares of preferred stock vote together with common stock on an as-converted basis the percentages of beneficial ownership reported in this column do not reflect the beneficial owner’s voting percentage of our outstanding capital stock. See Note (1)(b).  Because each stockholder of the Company is a party to certain agreements with the other stockholders of the Company, which agreements contain, among other things, certain voting agreements and limitations on the sale of their shares of common stock, each stockholder of the Company may be deemed to be a member of a “group,” within the meaning of Section 13(d)(3) of the Exchange

 

14



 

Act.  The percentages of beneficial ownership presented in this column are calculated in accordance with Rule 13d-3(d)(1) promulgated under the Exchange Act, excluding in the case of each beneficial owner, the shares held by any other beneficial owner, as to which each beneficial owner disclaims beneficial ownership.

 

(1)(b)                   A more accurate reflection of each beneficial owner’s voting percentage is their percentage of the preferred stock and the common stock voting together as a single class (the “Converted Common Stock”), assuming the conversion of all issued and outstanding shares of preferred stock. In order to provide accurate disclosure of the relevant beneficial ownership percentage of each beneficial owner included in this table we have set forth each such beneficial owner’s ownership percentage (calculated in accordance with Rule 13d-3 of the Exchange Act) of the Converted Common Stock in this column. See Note (1)(a).

 

(2)                                  Includes 541,343 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(3)                                  Includes 156,629 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(4)                                  Consists of 89,579 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(5)                                  Includes 82,220 shares of common stock issuable upon conversion of 8,222 shares of Company Series A-1 Preferred Stock, 121,940 shares of common stock issuable upon conversion of 12,194 shares of Company Series A-2 Preferred Stock, 29,850 shares of common stock issuable upon conversion of 2,985 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III, L.P. (“BV III”), in the Merger (as defined below), and 68,740 shares of common stock issuable upon conversion of 6,874 shares of Company Series A-1 Preferred Stock issued to BV III at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 1,222,900 shares of common stock issuable upon conversion of 122,290 shares of Company Series A-1 Preferred Stock, 1,813,640 shares of common stock issuable upon conversion of 181,364 shares of Company Series A-2 Preferred Stock, and 443,950 shares of common stock issuable upon conversion of 44,395 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III-QP, L.P. (“BV III QP”), in the Merger, and 1,022,380 shares of common stock issuable upon conversion of 102,238 shares of Company Series A-1 Preferred Stock issued to BV III QP at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 103,350 shares of common stock issuable upon conversion of 10,335 shares of Company Series A-1 Preferred Stock, 153,270 shares of common stock issuable upon conversion of 15,327 shares of Company Series A-2 Preferred Stock, and 37,520 shares of common stock issuable upon conversion of 3,752 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III GmbH & Co. Beteiligungs K.G. (“BV III KG”), in the Merger, and 86,400 shares of common stock issuable upon conversion of 8,640 shares of Company Series A-1 Preferred Stock issued to BV III KG at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 36,930 shares of common stock issuable upon conversion of 3,693 shares of Company Series A-1 Preferred Stock, 54,770 shares of common stock issuable upon conversion of 5,477 shares of Company Series A-2 Preferred Stock, and 13,400 shares of common stock issuable upon conversion of 1,340 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III Parallel Fund, L.P. (“BV III PF”), in the Merger, and 30,860 shares of common stock issuable upon conversion of 3,086, shares of Company Series A-1 Preferred Stock issued to BV III PF at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 23,680 shares of common stock issuable upon conversion of 2,368 shares of Company Series A-1 Preferred Stock, 35,110 shares of common stock issuable upon conversion of 3,511 shares of Company Series A-2 Preferred Stock, and 8,590 shares of common stock issuable upon conversion of 859 shares of Company Series A-3 Preferred Stock issued to MPM Asset Management Investors 2003 BVIII LLC (“AM LLC”) in the Merger, and 19,780 shares of common stock issuable upon conversion of 1,978, shares of Company Series A-1 Preferred Stock issued to AM LLC at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 540,010 shares of common stock issuable upon conversion of 54,001 shares of Company Series A-1 Preferred Stock, and 1,842,420 shares of common stock issuable upon conversion of 184,242 shares of Company Series A-2 Preferred Stock issued to MPM Bio IV NVS Strategic Fund, L.P. (“MPM NVS”) in the Merger, and 605,360 shares of common stock issuable upon conversion of 60,536, shares of Company Series A-1 Preferred Stock issued to MPM NVS at subsequent closings of the Company’s Series A-1 Preferred Stock financing. MPM BioVentures III GP, L.P. (“BV III LP”) and MPM BioVentures III LLC (“BV3LLC”) are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. MPM BioVentures IV GP LLC (“BV IV GP”) and MPM BioVentures IV LLC (“BV4LLC”) are the direct and indirect general partners of MPM NVS. BV3LLC is the General Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members of BV3LLC share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Each entity mentioned above and Dr. Gadicke disclaim beneficial ownership of all shares not held by it or him of record. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(6)                              Includes of 8,222 shares of Company Series A-1 Preferred Stock issued to BV III in the Merger, and 6,874 shares of Company Series A-1 Preferred Stock issued to BV III at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 122,290 shares of Company Series A-1 Preferred Stock issued to BV III QP in the Merger, and 102,238 shares of Company Series A-1 Preferred Stock issued to BV III QP at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 10,335 shares of Company Series A-1 Preferred Stock issued to BV III KG in the Merger, and 8,640 shares of Company Series A-1 Preferred Stock issued to BV III KG at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 3,693 shares of Company Series A-1 Preferred Stock issued to BV III PF in the Merger, and 3,086 shares of Company Series A-1 Preferred Stock issued to BV III PF at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 2,368 shares of Company Series A-1 Preferred Stock, issued to AM LLC in the Merger, and 1,978 shares of Company Series A-1 Preferred Stock issued to AM LLC at subsequent closings of the Company’s Series A-1 Preferred Stock financing; and 54,001 shares of Company Series A-1 Preferred Stock issued to MPM NVS in the Merger, and 60,536 shares of Company Series A-1 Preferred Stock issued to MPM NVS at subsequent closings of the Company’s Series A-1 Preferred Stock financing. BV III LP and BV3LLC, are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. BV IV GP and BV4LLC are the direct and indirect general partners of MPM NVS. BV3LLC is the General

 

15



 

Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Each entity mentioned above and Dr. Gadicke disclaim beneficial ownership of all shares not held by it or him of record. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(7)                              Includes 12,194 shares of Company Series A-2 Preferred Stock issued BV III in the Merger; 181,364 shares of Company Series A-2 Preferred Stock issued to BV III QP in the Merger, 15,327 shares of Company Series A-2 Preferred Stock issued BV III KG in the Merger; 5,477 shares of Company Series A-2 Preferred Stock issued to BV III PF in the Merger; 3,511 shares of Company Series A-2 Preferred Stock issued to AM LLC in the Merger; and 184,242 shares of Company Series A-2 Preferred Stock issued to MPM NVS in the Merger. BV III LP and BV3LLC, are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. BV IV GP and BV4LLC are the direct and indirect general partners of MPM NVS. BV3LLC is the General Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Each entity mentioned above and Dr. Gadicke disclaim beneficial ownership of all shares not held by it or him of record. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(8)                                  Includes 2,985 shares of Company Series A-3 Preferred Stock issued to BV III in the Merger; 44,395 shares of Company Series A-3 Preferred Stock issued BV III QP, in the Merger; 3,752 shares of Company Series A-3 Preferred Stock issued to BV III KG, in the Merger; 1,340 shares of Company Series A-3 Preferred Stock issued to BV III PF, in the Merger; and 859 shares of Company Series A-3 Preferred Stock issued to AM LLC in the Merger. BV III LP and BV3LLC, are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. BV IV GP and BV4LLC are the direct and indirect general partners of MPM NVS. BV3LLC is the General Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Each entity mentioned above and Dr. Gadicke disclaim beneficial ownership of all shares not held by it or him of record. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(9)                                 Consists of 128,332 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(10)                            Includes 15,173 shares of common stock and 1,086,280 shares of common stock issuable upon conversion of 108,628 shares of Company Series A-2 Preferred Stock, 249,830 shares of common stock issuable upon conversion of 24,983 shares of Company Series A-3 Preferred Stock (the “OBP IV Shares”) held directly by OBP IV—Holdings LLC (“OBP IV”); and 151 shares of common stock and 10,900 shares of common stock issuable upon conversion of 1,090 shares of Company Series A-2 Preferred Stock, 2,500 shares of common stock issuable upon conversion of 250 shares of Company Series A-3 Preferred Stock (the “mRNA II Shares”) held directly by mRNA II—Holdings LLC (“mRNA II”). The OBP IV Shares and the mRNA II Shares are referred to herein as the “Oxford Shares.” The OBP IV Shares are indirectly held by Oxford Bioscience Partners IV L.P. (“OBP LP”), a member of OBP IV. The mRNA II Shares are indirectly held by mRNA Fund II L.P. (“mRNA LP”), a member of mRNA II. The Oxford Shares are indirectly held by OBP Management IV L.P. (“OBP Management IV”), the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints Capital Granite, L.P. (“Saints LP”), a member of OBP IV and mRNA II; Saints Capital Granite, LLC (“Saints LLC”), the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC, share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Oxford Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(11)                            Includes 108,628 shares of Company Series A-2 Preferred Stock held directly by OBP IV (the “OBP IV A-2 Shares”) and 1,090 shares of Company Series A-2 Preferred Stock held directly by mRNA II (the “mRNA II A-2 Shares”). The OBP IV A-2 Shares are

 

16



 

indirectly held by OBP LP, a member of OBP IV. The mRNA II A-2 Shares are indirectly held by mRNA LP, a member of mRNA II. The OBP IV A-2 Shares and the mRNA II A-2 Shares are referred to herein as the “Oxford A-2 Shares”. The Oxford A-2 Shares are indirectly held by OBP Management IV, the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints LP, a member of OBP IV and mRNA II; Saints LLC, the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC, share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints A-2 Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(12)                            Includes 24,983 shares of Company Series A-3 Preferred Stock held directly by OBP IV (the “OBP IV A-3 Shares”) and 250 shares of Company Series A-3 Preferred Stock held directly by mRNA II (the mRNA II A-3 Shares”). The OBP IV A-3 Shares are indirectly held by OBP LP, a member of OBP IV. The mRNA II A-3 Shares are indirectly held by mRNA LP, a member of mRNA II. The OBP IV A-3 Shares and the mRNA II A-3 Shares are referred to herein as the “Oxford A-3 Shares”. The Oxford A-3 Shares are indirectly held by OBP Management IV, the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints LP, a member of OBP IV and mRNA II; Saints LLC, the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC, share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints A-3 Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(13)                            Consists of 64,168 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(14)                            Includes 435,960 shares of common stock issuable upon conversion of 43,596 shares of Company Series A-1 Preferred Stock (the “BBBV LP A-1 Preferred Stock”), and 1,051,620 shares of common stock issuable upon conversion of 105,162 shares of Company Series A-2 Preferred Stock (together with the BBBV LP A-1 Preferred Stock the “BBBV LP Shares”) issued to BB Biotech Ventures II L.P. (“BBBV LP”) in the Merger, and 409,400 shares issuable upon conversion of 40,940 shares of Company Series A-1 Preferred Stock issued to BBBV LP at subsequent closings of the Company’s Series A-1 Preferred Stock financing. BB Biotech Ventures GP (Guernsey) Limited (“BBBV Limited”) is the General Partner of BBBV LP. Jan Bootsma, Pascal Mahieux, and Ben Morgan are the directors of BBBV Limited. Dr. Münchbach, the Senior Investment Advisor Private Equity at Bellevue Asset Management AG, advises Asset Management BAB N.V. (“AMB NV”) who, pursuant to a services agreement with BAM AG, advises the directors of BBBV Limited mentioned above. Jan Bootsma, Pascal Mahieux and Ben Morgan share all voting and investment power over the BBBV LP shares. Each of the foregoing, except BBBV LP in the case of the BBBV LP Shares, disclaims beneficial ownership of the BBBV LP Shares except to the extent of their pecuniary interest therein, if any. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 29, 2011 by BBBV LP, BBBV Limited, Jan Bootsma, Pascal Mahieux, Ben Morgan, and Martin Münchbach.

 

(15)                            Includes 43,596  shares of Company Series A-1 Preferred Stock issued to BBBV LP in the Merger, and 40,940 shares of Company Series A-1 Preferred Stock issued to BBBV LP at subsequent closings of the Company’s Series A-1 Preferred Stock financing. Voting and investment power with respect to these shares is shared by the general partners of this fund. BBBV Limited is the General Partner of BBBV LP. Jan Bootsma, Pascal Mahieux and Ben Morgan are the directors of BBBV Limited. Dr. Münchbach, the Senior Investment Advisor Private Equity at Bellevue Asset Management AG, advises Asset Management BAB N.V. (“AMB NV”) who, pursuant to a services agreement with BAM AG, advises the directors of BBBV Limited mentioned above. Jan Bootsma, Pascal Mahieux and Ben Morgan share all voting and investment power over the BBBV LP shares. Each of the foregoing, except BBBV LP in the case of the BBBV LP Shares, disclaims beneficial ownership of the BBBV LP Shares except to the extent of their pecuniary interest therein, if any. Beneficial ownership information is based on the information known to the Company and a Schedule 13D filed with the SEC on December 29, 2011 by BBBV LP, BBBV Limited, Jan Bootsma, Pascal Mahieux, Ben Morgan, and Martin Münchbach.

 

(16)                            Includes 105,162 shares of Company Series A-2 Preferred Stock issued to BBBV LP in the Merger. Voting and investment power with respect to these shares is shared by the general partners of this fund. BBBV Limited is the General Partner of BBBV LP. Jan Bootsma, Pascal Mahieux and Ben Morgan are the directors of BBBV Limited. Dr. Münchbach, the Senior Investment Advisor Private Equity at Bellevue Asset Management AG, advises Asset Management BAB N.V. (“AMB NV”) who, pursuant to a services agreement with BAM AG, advises the directors of BBBV Limited mentioned above. Jan Bootsma, Pascal Mahieux and Ben Morgan share all voting and investment power over the BBBV LP shares. Each of the foregoing, except BBBV LP in the case of the BBBV LP Shares, disclaims beneficial ownership of the BBBV LP Shares except to the extent of their pecuniary interest therein, if any. Beneficial ownership information is based on the information known to the Company and a Schedule 13D filed with the SEC on December 29, 2011 by BBBV LP, BBBV Limited, Jan Bootsma, Pascal Mahieux, Ben Morgan, and Martin Münchbach.

 

(17)                            Consists of 15,000 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(18)                            Includes 82,220 shares of common stock issuable upon conversion of 8,222 shares of Company Series A-1 Preferred Stock, 121,940 shares of common stock issuable upon conversion of 12,194 shares of Company Series A-2 Preferred Stock, 29,850 shares of common stock issuable upon conversion of 2,985 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III, L.P. (“BV III”), in the Merger, and 68,740 shares of common stock issuable upon conversion of 6,874 shares of Company Series A-1 Preferred Stock issued to BV III at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 1,222,900 shares of common stock issuable upon conversion of 122,290 shares of Company Series A-1 Preferred Stock, 1,813,640 shares of common stock issuable

 

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upon conversion of 181,364 shares of Company Series A-2 Preferred Stock, and 443,950 shares of common stock issuable upon conversion of 44,395 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III-QP, L.P. (“BV III QP”), in the Merger, and 1,022,380 shares of common stock issuable upon conversion of 102,238 shares of Company Series A-1 Preferred Stock issued to BV III QP at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 103,350 shares of common stock issuable upon conversion of 10,335 shares of Company Series A-1 Preferred Stock, 153,270 shares of common stock issuable upon conversion of 15,327 shares of Company Series A-2 Preferred Stock, and 37,520 shares of common stock issuable upon conversion of 3,752 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III GmbH & Co. Beteiligungs K.G. (“BV III KG”), in the Merger, and 86,400 shares of common stock issuable upon conversion of 8,640 shares of Company Series A-1 Preferred Stock issued to BV III KG at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 36,930 shares of common stock issuable upon conversion of 3,693 shares of Company Series A-1 Preferred Stock, 54,770 shares of common stock issuable upon conversion of 5,477 shares of Company Series A-2 Preferred Stock, and 13,400 shares of common stock issuable upon conversion of 1,340 shares of Company Series A-3 Preferred Stock issued to MPM BioVentures III Parallel Fund, L.P. (“BV III PF”), in the Merger, and 30,860 shares of common stock issuable upon conversion of 3,086, shares of Company Series A-1 Preferred Stock issued to BV III PF at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 23,680 shares of common stock issuable upon conversion of 2,368 shares of Company Series A-1 Preferred Stock, 35,110 shares of common stock issuable upon conversion of 3,511 shares of Company Series A-2 Preferred Stock, and 8,590 shares of common stock issuable upon conversion of 859 shares of Company Series A-3 Preferred Stock issued to MPM Asset Management Investors 2003 BVIII LLC (“AM LLC”) in the Merger, and 19,780 shares of common stock issuable upon conversion of 1,978, shares of Company Series A-1 Preferred Stock issued to AM LLC at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 540,010 shares of common stock issuable upon conversion of 54,001 shares of Company Series A-1 Preferred Stock, and 1,842,420 shares of common stock issuable upon conversion of 184,242 shares of Company Series A-2 Preferred Stock issued to MPM Bio IV NVS Strategic Fund, L.P. (“MPM NVS”) in the Merger, and 605,360 shares of common stock issuable upon conversion of 60,536, shares of Company Series A-1 Preferred Stock issued to MPM NVS at subsequent closings of the Company’s Series A-1 Preferred Stock financing. All voting and investment power is shared with Dr. Gadicke and the other general partners of these funds. BV III LP and BV3LLC are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. BV IV GP and BV IV LLC are the direct and indirect general partners of MPM NVS. BV3LLC is the General Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members of BV3LLC share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Each fund mentioned above disclaims beneficial ownership of all shares not held by it of record. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(19)                            Includes of 8,222 shares of Company Series A-1 Preferred Stock issued to BV III in the Merger, and 6,874 shares of Company Series A-1 Preferred Stock issued to BV III at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 122,290 shares of Company Series A-1 Preferred Stock issued to BV III QP in the Merger, and 102,238 shares of Company Series A-1 Preferred Stock issued to BV III QP at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 10,335 shares of Company Series A-1 Preferred Stock issued to BV III KG in the Merger, and 8,640 shares of Company Series A-1 Preferred Stock issued to BV III KG at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 3,693 shares of Company Series A-1 Preferred Stock issued to BV III PF in the Merger, and 3,086 shares of Company Series A-1 Preferred Stock issued to BV III PF at subsequent closings of the Company’s Series A-1 Preferred Stock financing; 2,368 shares of Company Series A-1 Preferred Stock, issued to AM LLC in the Merger, and 1,978 shares of Company Series A-1 Preferred Stock issued to AM LLC at subsequent closings of the Company’s Series A-1 Preferred Stock financing; and 54,001 shares of Company Series A-1 Preferred Stock issued to MPM NVS in the Merger, and 60,536 shares of Company Series A-1 Preferred Stock issued to MPM NVS at subsequent closings of the Company’s Series A-1 Preferred Stock financing. Voting and investment power is shared with Dr. Gadicke and the other general partners of these funds. BV III LP and BV3LLC, are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. BV IV GP and BV4LLC are the direct and indirect general partners of MPM NVS. BV3LLC is the General Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(20)                            Includes 12,194 shares of Company Series A-2 Preferred Stock issued to BV III in the Merger; 181,364 shares of Company Series A-2 Preferred Stock issued to BV III QP, in the Merger 15,327 shares of Company Series A-2 Preferred Stock issued to BV III KG in the Merger; 5,477 shares of Company Series A-2 Preferred Stock issued to BV III PF, in the Merger; 3,511 shares of Company Series A-2 Preferred Stock issued to AM LLC in the Merger; and 184,242 shares of Company Series A-2 Preferred Stock issued to MPM NVS in the Merger. All voting and investment power is shared with Dr. Gadicke and the other general partners of these funds. BV III LP and BV3LLC, are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. BV IV GP and BV4LLC are the direct and indirect general partners of MPM NVS. BV3LLC is the General Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member

 

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disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(21)                            Includes 2,985 shares of Company Series A-3 Preferred Stock issued to BV III in the Merger; 44,395 shares of Company Series A-3 Preferred Stock issued to BV III QP in the Merger; 3,752 shares of Company Series A-3 Preferred Stock issued to BV III KG, in the Merger; 1,340 shares of Company Series A-3 Preferred Stock issued BV III PF, in the Merger; and 859 shares of Company Series A-3 Preferred Stock issued to AM LLC in the Merger. All voting and investment power is shared with Dr. Gadicke and the other general partners of these funds. BV III LP and BV3LLC, are the direct and indirect general partners of BV III, BV III QP, BV III KG, and BV III PF. BV IV GP and BV4LLC are the direct and indirect general partners of MPM NVS. BV3LLC is the General Partner of BV III LP. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael Steinmetz, Dennis Henner, Nicholas Simon and Kurt Wheeler are the Members of BV3LLC and the managers of AM LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. BV4LLC is the Managing Member of BV IV GP. Ansbert Gadicke, Luke Evnin, Todd Foley, John Vander Vort, James Paul Scopa, Vaughn M. Kailian and Steven St. Peter are the Members of MPM BioVentures IV LLC. All members share all power to vote, acquire, hold and dispose of all shares and warrants. Each member disclaims beneficial ownership of the securities except to the extent of their pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 27, 2011 by BV III, BV III QP, BV III KG, BV III PF, AM LLC, MPM NVS, BV III LP, BV3LLC, BV IV GP, BV4LLC, Luke Evnin, Ansbert Gadicke, Nicholas Galakatos, Michael Steinmetz, Kurt Wheeler, Nicholas Simon III, Dennis Henner, Todd Foley, Vaughn M. Kailian, James Paul Scopa, Steven St. Peter and John Vander Vort.

 

(22)                            Includes 255,220 shares of common stock issuable upon conversion of 25,522 shares of Company Series A-1 Preferred Stock, and 2,103,250 shares of common stock issuable upon conversion of 210,325 shares of Company Series A-2 Preferred Stock issued to The Wellcome Trust Limited as trustee of The Wellcome Trust in the Merger, and 510,440 shares of common stock issuable upon conversion of 51,044 shares of Company Series A-1 Preferred Stock issued to The Wellcome Trust Limited as trustee of The Wellcome Trust at subsequent closings of the Company’s Series A-1 Preferred Stock financing. Responsibility for the activities of the Wellcome Trust lies with the Board of Governors of The Wellcome Trust Limited that is comprised of William Castell, Kay Davies, Peter Davies, Christopher Fairburn, Richard Hynes, Anne Johnson, Roderick Kent, Eliza Manningham-Buller, Peter Rigby and Peter Smith. The Board of Governors share all voting and investment power with respect to the shares held by The Wellcome Trust Limited as trustee of the Wellcome Trust. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 23, 2011 by The Wellcome Trust Limited as trustee of The Wellcome Trust.

 

(23)                            Responsibility for the activities of the Wellcome Trust lies with the Board of Governors of The Wellcome Trust Limited that is comprised of William Castell, Kay Davies, Peter Davies, Christopher Fairburn, Richard Hynes, Anne Johnson, Roderick Kent, Eliza Manningham-Buller, Peter Rigby and Peter Smith. The Board of Governors share all voting and investment power with respect to the shares held by The Wellcome Trust Limited as trustee of the Wellcome Trust. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 23, 2011 by The Wellcome Trust Limited as trustee of The Wellcome Trust.

 

(24)                            Includes 83,113 shares of common stock and 196,510 shares of common stock issuable upon conversion of 19,651 shares of Company Series A-1 Preferred Stock, 982,780 shares of common stock issuable upon conversion of 98,278 shares of Company Series A-2 Preferred Stock, 636,630 shares of common stock issuable upon conversion of 63,663 shares of Company Series A-3 Preferred Stock issued to HealthCare Ventures VII, L.P. (“HCVVII”) in the Merger, and 393,020 shares of common stock issuable upon conversion of 39,302 shares of Company Series A-1 Preferred Stock issued to HCVVII at subsequent closings of the Company’s Series A-1 Preferred Stock financing. HealthCare Partners VII, L.P. (“HCPVII”) is the General Partner of HCVVII. The General Partners of HCPVII are James H. Cavanaugh, Ph.D., Harold R. Werner, John W. Littlechild, Christopher Mirabelli, Ph.D., and Augustine Lawlor. The General Partners of HCPVII share all voting and investment power on behalf of HCPVII. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on January 3, 2012 by HCVVII, HCPVII, James H. Cavanaugh, Ph.D., Harold R. Werner, John W. Littlechild, Christopher Mirabelli, Ph.D., and Augustine Lawlor.

 

(25)                            HealthCare Partners VII, L.P. (“HCPVII”) is the General Partner of HCVVII. The General Partners of HCPVII are James H. Cavanaugh, Ph.D., Harold R. Werner, John W. Littlechild, Christopher Mirabelli, Ph.D., and Augustine Lawlor. The General Partners of HCPVII share all voting and investment power on behalf of HCPVII. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on January 3, 2012 by HCVVII, HCPVII, James H. Cavanaugh, Ph.D., Harold R. Werner, John W. Littlechild, Christopher Mirabelli, Ph.D., and Augustine Lawlor.

 

(26)                            Includes: (i) 15,173 shares of common stock (the “OBP IV Common Shares”) held directly by OBP IV; (ii) 1,822,520 shares of common stock (the “OBP IV Conversion Shares” and, together with the OBP IV Common Shares, the “OBP IV Saints Shares”) issuable to OBP IV upon the conversion of 48,641 shares of Company Series A-1 Preferred Stock held directly by OBP IV, 108,628 shares of Company Series A-2 Preferred Stock held directly by OBP IV and 24,983 shares of Company Series A-3 Preferred Stock held directly by OBP IV; (iii) 151 shares of common stock (the “mRNA II Common Shares”) held directly by mRNA II; (iv) 18,260 shares of common stock (the “mRNA II Conversion Shares” and, together with the mRNA II Common Shares, the “mRNA Saints II Shares”) issuable to mRNA II upon the conversion of 486 shares of Company Series A-1 Preferred Stock held directly by mRNA II, 1,090 shares of Company Series A-2 Preferred Stock held directly by mRNA II and 250 shares of Company Series A-3 Preferred Stock held directly by mRNA II. The OBP IV Saints Shares and the mRNA Saints II Shares are referred to herein as the “Saints Shares.” The Saints Shares are indirectly held by Saints LP, a member of OBP IV and Saints LLC, the sole general partner of Saints LP, and the individual managers of Saints LLC. The individual managers of Saints LLC are Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer. The individual managers of Saints LLC share all voting and investment power on behalf of Saints LLC. Additionally, other than with respect to the common stock issuable upon the conversion of the 48,641 shares of Company Series A-1

 

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Preferred Stock held directly by OBP IV and the 486 shares of Company Series A-1 Preferred Stock held directly by mRNA II, the Saints Shares are indirectly held by OBP LP, a member of OBP IV. The mRNA II Shares are indirectly held by mRNA LP, a member of mRNA II. The Saints Shares are indirectly held by (i) OBP Management IV, the sole general partner of each of OBP LP and mRNA LP and (ii) Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(27)                            Includes: 48,641 shares of Company Series A-1 Preferred Stock held directly by OBP IV (the “OBP IV A-1 Shares”), and 486 shares of Company Series A-1 Preferred Stock held directly by mRNA II (together with the OBP IV A-1 Shares, the “Saints A-1 Shares”). The Saints A-1 Shares are indirectly held by Saints LP, a member of OBP IV and mRNA II, Saints LLC, the sole general partner of Saints LP, and the individual managers of Saints LLC. The individual managers of Saints LLC are Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer. The individual managers of Saints LLC share all voting and investment power on behalf of Saints LLC. Each entity mentioned above and Messrs. Halsted, Quinlivan and Sawyer disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints A-1 Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(28)                            Includes: 108,628 shares of Company Series A-2 Preferred Stock held directly by OBP IV (the “OBP IV A-2 Shares”) and 1,090 shares of Company Series A-2 Preferred Stock held directly by mRNA II (together with the OBP IV A-2 Shares, the “Saints A-2 Shares”). The Saints A-2 Shares are indirectly held by OBP Management IV, the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints LP, a member of OBP IV and mRNA II; Saints LLC, the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints A-2 Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(29)                            Includes: 24,983 shares of Company Series A-3 Preferred Stock held directly by OBP IV (the “OBP IV A-3 Shares”); and 250 shares of Company Series A-3 Preferred Stock held directly by mRNA II (together with the OBP IV A-3 Shares, the “Saints A-3 Shares”). The Saints A-3 Shares are indirectly held by OBP Management IV, the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints LP, a member of OBP IV and mRNA II; Saints LLC, the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints A-3 Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(30)                            Includes 435,960 shares of common stock issuable upon conversion of 43,596 shares of Company Series A-1 Preferred Stock (the “BBBV LP A-1 Preferred Stock”), and 1,051,620 shares of common stock issuable upon conversion of 105,162 shares of Company Series A-2 Preferred Stock (together with the BBBV LP A-1 Preferred Stock the “BBBV LP Shares”) issued to BB Biotech Ventures II L.P. (“BBBV LP”) in the Merger, and 409,400 shares of common stock issuable upon conversion of 40,940 shares of Company Series A-1 Preferred Stock issued to BBBV LP at subsequent closings of the Company’s Series A-1 Preferred Stock financing. BB Biotech Ventures GP (Guernsey) Limited (“BBBV Limited”) is the General Partner of BBBV LP. Jan Bootsma, Pascal Mahieux, and Ben Morgan are the directors of BBB Limited and share all investment and voting power with respect to these shares. Additionally, Martin Münchbach, the Senior Investment Advisor Private Equity at Bellevue Asset Management AG, advises Asset Management BAB N.V. (“AMB NV”) who, pursuant to a services agreement with BAM AG, advises the directors of BBBV Limited, may be deemed to have voting and investment control over the shares held by BBBV LP given such advisory role. Each of the foregoing, except BBBV LP in the case of the BBBV LP Shares, disclaims beneficial ownership of the BBBV LP Shares except to the extent of their pecuniary interest therein, if any. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on December 29, 2011 by BBBV LP, BBBV Limited, Jan Bootsma, Pascal Mahieux, Ben Morgan, and Martin Münchbach.

 

(31)                            BB Biotech Ventures GP (Guernsey) Limited (“BBBV Limited”) is the General Partner of BBBV LP. Jan Bootsma, Pascal Mahieux, and Ben Morgan are the directors of BBB Limited and share all investment and voting power with respect to these shares. Additionally, Martin Münchbach, the Senior Investment Advisor Private Equity at Bellevue Asset Management AG, advises Asset Management BAB N.V. (“AMB NV”) who, pursuant to a services agreement with BAM AG, advises the directors of BBBV Limited, may be deemed to have voting and investment control over the shares held by BBBV LP given such advisory role. Each of the foregoing, except BBBV LP in the case of the BBBV LP Shares, disclaims beneficial ownership of the BBBV LP Shares except to the extent of their pecuniary interest therein, if any. Beneficial ownership information is based on information known to the Company and

 

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a Schedule 13D filed with the SEC on December 29, 2011 by BBBV LP, BBBV Limited, Jan Bootsma, Pascal Mahieux, Ben Morgan, and Martin Münchbach.

 

(32)                            Includes the OBP IV Shares and the mRNA II Shares. The OBP IV Shares are indirectly held by OBP LP, a member of OBP IV. The mRNA II Shares are indirectly held by mRNA LP, a member of mRNA II. The Oxford Shares are indirectly held by OBP Management IV, the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints LP, a member of OBP IV and mRNA II; Saints LLC, the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the OBP IV Shares and mRNA Fund II Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(33)                            Includes: 108,628 shares of Company Series A-2 Preferred Stock held directly by OBP IV and 1,090 shares of Company Series A-2 Preferred Stock held directly by mRNA II. The Oxford A-2 Shares are indirectly held by OBP Management IV, the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints LP, a member of OBP IV and mRNA II; Saints LLC, the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints A-2 Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(34)                            Includes: 24,983 shares of Company Series A-3 Preferred Stock held directly by OBP IV and 250 shares of Company Series A-3 Preferred Stock held directly by mRNA II. The Oxford A-3 Shares are indirectly held by OBP Management IV, the sole general partner of each of OBP LP and mRNA LP; Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV; Saints LP, a member of OBP IV and mRNA II; Saints LLC, the sole general partner of Saints LP; and Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, as the individual managers of Saints Capital Granite, LLC. Jonathan Fleming and Alan Walton, the individual general partners of OBP Management IV, share all voting and investment power on behalf of OBP Management IV. Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer, the individual managers of Saints LLC share all voting and investment power on behalf of Saints LLC. Each of the entities and individuals mentioned above disclaim beneficial ownership within the meaning of Section 16 of the Exchange Act or otherwise of such portion of the Saints A-2 Shares in which such entity or individual has no actual pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on May 27, 2011 by OBP IV, mRNA II, mRNA Fund II, OBP Management IV, Saints LP, Saints LLC, Jonathan Fleming, Alan Walton, Scott Halsted, David P. Quinlivan, and Kenneth B. Sawyer.

 

(35)                            Includes 204,160 shares of common stock issuable upon conversion of 20,416 shares of Company Series A-1 Preferred Stock, and 560,860 shares of common stock issuable upon conversion of 56,086 shares of Company Series A-2 Preferred Stock. Healthcare Private Equity Limited Partnership (“HPELP”) is a limited partnership which has one general partner, Waverley Healthcare Private Equity Limited (“Waverley GP”) and one limited partner, Scottish Widows plc. As general partner, Waverley GP has authority under the HPELP limited partnership agreement (“LPA”) to conduct and manage the business of HPELP. Andrew November and Archie Struthers are the directors of Waverly GP and share all of the voting and investment power over the shares held by HPELP. The controlling shareholder of Waverley GP is SWIP Group Limited. The ultimate controlling entity of SWIP Group Limited is Lloyds Banking Group plc, a public listed company with many shareholders. The board of directors of Lloyds Banking Group plc consists of nine non-executive directors (Sir Winifried Bischoff, Lord Leitch, Anita Frew, Glen Moreno, David Roberts, T Timothy Ryan Jnr, Martin Scicluna and Anthony Watson) and three executive directors (Antonito Horta-Osorio, G Truett Tate and Tim Tookey). The Chairman (Sir Winifried Bischoff) is responsible for leadership of the board. The Group Chief executive (Antonio Horto-Osorio) is responsible for the day to day management of the business of Lloyds Banking Group plc, in accordance with the strategy and long term objectives approved by the board. Beneficial ownership information is based on information known to the Company. The nine non-executive directors and three executive directors of Lloyds Banking Group plc do not have any sole or shared voting or investment power with respect to the shares held by HPELP. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on January 27, 2012 by HPELP, Waverly GP, Scottish Windows plc and Lloyds Banking Group plc.

 

(36)                            Includes 1,228,200 shares of common stock issuable upon conversion of 122,820 shares of Company Series A-1 Preferred Stock. Brookside Capital Investors, L.P. (“Brookside Investors”) is the sole general partner of Brookside Capital Partners Fund, L.P. (“Partners Fund”). Brookside Capital Management, LLC is the sole general partner of Brookside Investors. The control persons of Brookside Capital Management are Executive Committee members: Dewey J. Awad, Domenic J. Ferrante, Matthew V. McPherron, William E. Pappendick IV, John M. Toussaint. The Executive Committee members share all voting and investment power on behalf of Brookside Capital Management, LLC. Beneficial ownership information is based on information known to the Company.

 

(37)                        Includes 1,228,200 shares of common stock issuable upon conversion of 122,820 shares of Company Series A-1 Preferred Stock. Biotech Growth N.V. (“Biotech Growth”) is a wholly-owned subsidiary of BB Biotech AG (“BB Biotech”). The directors and executive officers of BB Biotech are Dr. Thomas D. Szucs, Chairman and Director; Dr. Clive Meanwell, Vice Chairman and Director; and Dr. Erich Hunziker, Director. The directors and executive officers of Biotech Growth are Dr. Thomas D. Szucs, Statutory Director; Deanna Chemaly, Statutory Director; and Hugo Jan van Neutegem, Statutory Director. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on January 3, 2012 by BB Biotech and Biotech

 

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Growth. The directors and executive officers of BB Biotech and Biotech Growth share all voting and investment power with respect to these shares.

 

(38)                            Includes 173,260 shares of common stock issuable upon conversion of 17,326 shares of Company Series A-1 Preferred Stock. Ipsen Pharma SAS (“Ipsen Pharma”) is a société par actions simplifiée organized under the laws of France and is a wholly-owned subsidiary of Ipsen S.A. (“Ipsen”), a société anonyme organized under the laws of France. Ipsen’s majority shareholder is Mayroy, a société anonyme organized under the laws of Luxembourg. The directors and executive officers of Ipsen Pharma are Christophe Jean, Director; Claude Bertrand, Director; Etienne De Blois, Director; Philippe Robert-Gorsse, Director; Eric Drape, Director; Claire Giraut, Director; Jean Fabre, Director; Jean-Pierre Dubuc, Director; Didier Veron, Director; and Marc De Garidel, President. The directors of Ipsen are Marc De Garidel, Director and Chief Executive Officer; Anne Beaufour, Director; Henri Beaufour, Director; Hervé Couffin, Director; Antoine Flochel, Director; Gérard Hauser, Director; Pierre Martinet, Director; René Merkt, Director; Yves Rambaud, Director; Klaus-Peter Schwabe, Director and Christophe Vérot, Director. The executive officers of Ipsen are Claire Giraut, Etienne de Blois, Christophe Jean, Claude Bertrand, and Eric Drape. The directors of Mayroy are Anne Beaufour, Antoine Flochel, Beech Tree SA, Bee Master B.V. Holding BV, Henri Beaufour, Klaus Peter Schwabe, and Jean-Pierre Diehl. The directors and officers of Ipsen, Mayroy and Ipsen Pharma share all voting and investment powers with respect to these shares. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on June 23, 2011 by Ipsen Pharma and Ipsen.

 

(39)                            Includes 64,430 shares of common stock issuable upon conversion of 6,443 shares of Company Series A-5 Preferred Stock held by Nordic Bioscience Clinical Development VII A/S (“Nordic VII”). Nordic VII beneficially owns 0.30% of the Fully-Diluted Shares. Nordic VII is a wholly-owned subsidiary of Nordic Bioscience Clinical Development A/S (“Nordic A/S”). Nordic A/S is wholly-owned subsidiary of Nordic Bioscience Holding A/S (“Nordic Holding”). Nordic Holding is majority owned by C.C. Consulting A/S (“C.C. Consulting”). Claus Christiansen, MD, and Bente Riis Chrstiansen each own 50% of C.C. Consulting and share all voting and investment power with respect to these shares. The entities and individuals mentioned above disclaim beneficial ownership of the share except to the extent of their pecuniary interest therein. Beneficial ownership information is based on information known to the Company and a Schedule 13D filed with the SEC on January 20, 2012 by Nordic VII.

 

(40)                            Includes 163,880 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(41)                            Includes 1,705 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012.

 

(42)                            Includes (i) 15,627 shares of common stock held by Mr. Katzenellenbogen and (ii) 40,438 shares of common stock held by the John A. Katzenellenbogen Trust Under Agreement Dated August 2, 1999 (the “Katzenellenbogen Trust”). Mr. Katzenellenbogen is the trustee of the Katzenellenbogen Trust. The Katzenellenbogen Trust may be deemed to beneficially own the shares held by Mr. Katzenellenbogen.

 

(43)                            Includes (i) 1,399 options to purchase our common stock anticipated to be exercisable within 60 days after February 1, 2012, (ii) 48,942 shares of common stock held by Dr. Potts and (iii) 20,291 shares of common stock held by the Dr. John Potts, Jr. and Susanne K. Potts Irrevocable Trust for Stephen K. Potts dated 6-15-05 (the “Potts Trust”). Dr. Potts is a trustee of the Potts Trust.  The Potts Trust may  be deemed to beneficially own the shares held by Mr. Potts.

 

CHANGE IN CONTROL

 

Reverse Merger

 

We were incorporated in the State of Delaware on February 4, 2008 under the name MPM Acquisition Corp. In May 2011, we consummated a reverse merger transaction (the “Merger”) with Radius Health, Inc., a Delaware corporation formed on October 3, 2003 (the “Former Operating Company”), through which the Former Operating Company became a wholly-owned subsidiary of ours pursuant to the terms of an Agreement and Plan of Merger, dated as of April 25, 2011, by and among the Company (formerly known as MPM Acquisition Corp.), the Former Operating Company and RHI Merger Corp. (the “Merger Agreement”).  Immediately following the merger transaction, the Former Operating Company was merged with and into us, we assumed the business of the Former Operating Company and changed our name to “Radius Health, Inc.”

 

At the effective time of the Merger (the “Effective Time”), all of the shares of the Former Operating Company’s common stock, par value $.01 per share (the “Former Operating Company Common Stock”), and shares of the Former Operating Company’s preferred stock, par value $.01 per share (the “Former Operating Company Preferred Stock”), that were outstanding immediately prior to the Merger were cancelled and each outstanding share of the Former Operating Company Common Stock outstanding immediately prior to the Effective Time was automatically converted into the right to receive one share of our common stock and each outstanding share of the Former Operating Company Preferred Stock outstanding immediately prior to the Effective Time was automatically converted into the right to

 

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receive one-tenth of one share of our corresponding series of preferred stock, as consideration for the Merger. In the Merger, we assumed all options and warrants of the Former Operating Company outstanding immediately prior to the Effective Time. Prior to the Merger, pursuant to the terms of a Redemption Agreement, dated as of April 25, 2011, between the Company and MPM Asset Management LLC (the “Redemption Agreement”), we completed the repurchase of all of our capital stock issued and outstanding immediately prior to the Merger from our former sole stockholder, MPM Asset Management LLC. Upon completion of the Merger and the redemption, the former stockholders of the Former Operating Company held 100% of the outstanding shares of our capital stock. Pursuant to the Merger, we assumed all of the Former Operating Company’s obligations under its existing contracts. In particular, we assumed the rights and obligations of the Former Operating Company under that certain Series A-1 Convertible Preferred Stock Purchase Agreement (the “Original Purchase Agreement”) with certain investors listed therein (the “Investors”) pursuant to which, among other things, the Former Operating Company agreed to issue and sell to the Investors up to an aggregate of 7,895,535 shares of Series A-1 Convertible Preferred Stock, par value $.01 per share, to be completed in three closings (the initial closing, the “Stage I Closing”, the second closing, the “Stage II Closing” and the final closing, the “Stage III Closing”) (collectively, the “Series A-1 Financing”). The Original Purchase Agreement was subsequently amended by Amendment No. 1 thereto to eliminate all closing conditions previously provided for in the Original Purchase Agreement (as so amended, the “Purchase Agreement”). On November 18, 2011, the Investors purchased, and we issued, an aggregate 263,178 shares of our Series A-1 Convertible Preferred Stock (“Series A-1 Preferred Stock”) at the Stage II Closing at a purchase price per share of $81.42.  On December 14, 2011, the Investors purchased, and we issued, an aggregate 263,180 shares of Series A-1 Preferred Stock at the Stage III Closing at a purchase price per share of $81.42.

 

The foregoing description of the Merger Agreement, the Redemption Agreement, the Purchase Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entireties by reference to the Merger Agreement, the Redemption Agreement and the Purchase Agreement, respectively.

 

Voting Arrangements

 

Pursuant to the Certificate of Designations and that certain Amended and Restated Stockholders’ Agreement, dated May 17, 2011, by and among the Company, as successor to Radius Health, Inc., and the Stockholders listed therein (as amended, the “Stockholders’ Agreement”), which is filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 000-53173) filed by the Company on November 10, 2011:

 

(i)  for so long as any shares of Series A-1 Convertible Preferred Stock are outstanding, the holders of a majority of the shares of Series A-1 Convertible Preferred Stock outstanding, voting as a separate class, have the right to designate and elect two (2) members of our Board;

 

(ii)  Oxford Bioscience Partners IV L.P. (together with Saints Capital VI, L.P. and their respective affiliates and certain transferees), HealthCare Ventures VII, L.P. (together with its affiliates and certain transferees) and The Wellcome Trust Limited as trustee of The Wellcome Trust (together with its affiliates and certain transferees) (collectively, the “G3 Group” and individually, each a “G3 Holder”) voting as a separate class have the right to designate and elect one (1) member of our Board by majority vote of the shares of Series A-1 Stock held by them; provided, however, that in order to be eligible to vote or consent with respect to the election of such member of our Board of Directors, a G3 Holder together with members of such G3 Group must hold greater than twenty percent (20%) of the shares of Series A-1 Stock purchased under the Purchase Agreement by such G3 Holder and the members of such G3 Group; and

 

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(iii)  MPM Capital L.P., voting as a separate class, has the right to designate and elect one (1) member of our Board by majority vote of the shares of Series A-1 Convertible Preferred Stock held by MPM Capital L.P. (provided, that (a) such member of our Board must be an individual with particular expertise in the development of pharmaceutical products and (b) in order to be eligible to vote or consent with respect to the election of such member of the Board, MPM Capital L.P. together with members of the MPM Group (as defined in the Stockholders’ Agreement) must hold greater than twenty percent (20%) of the shares of Series A-1 Convertible Preferred Stock purchased under the Purchase Agreement by MPM Capital L.P. and the members of the MPM Group).

 

As part of the Stockholders’ Agreement, the stockholders have  agreed to vote in favor of the above nominations.

 

EXECUTIVE COMPENSATION

 

The following table summarizes all compensation earned by our President and Chief Executive Officer and other named executive officers during 2011 and 2010.

 

Name and Principal
Position

 

Year

 

Salary
($)

 

Option
Awards
($)(7)

 

Non-Equity
Incentive Plan
Compensation
($)(8)

 

All Other
Compensation
($)(9)

 

Total ($)

 

Michael S. Wyzga,
President and Chief Executive Officer(1)

 

2011

 

38,141

(5)

3,351,432

 

0

 

0

 

3,389,573

 

 

2010

 

0

 

0

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C. Richard Lyttle,
Chief Scientific Officer(2)

 

2011
2010

 

389,980
378,622

 

503,973
0

 

155,992
189,311

 

1,715
1,715

 

1,051,660
569,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B. Nicholas Harvey,
Treasurer and Chief Financial Officer

 

2011

 

288,936

 

82,347

 

82,347

 

1,305

 

530,079

 

 

2010

 

278,492

 

0

 

105,827

 

1,305

 

385,624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Louis Brenner,
Chief Medical Officer(3)

 

2011
2010

 

47,500
0

(6)

 

989,439
0

 

14,143
0

 

20
0

 

1,051,082
0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Louis O’Dea, Former
Sr. Vice President and Chief Medical Officer(4)

 

2011

 

347,125

 

0

 

0

 

46,210

 

393,335

 

 

2010

 

319,363

 

0

 

130,939

 

1,032

 

451,334

 

 


(1)                                  Mr. Wyzga became our President and Chief Executive Officer on December 5, 2011.

 

(2)                                  Dr. Lyttle served as our President and Chief Executive Officer until December 5, 2011.

 

(3)                                  Dr. Brenner joined our company on November 9, 2011 and became Chief Medical Officer on December 1, 2011.

 

(4)                                  Dr. O’Dea resigned as our employee on November 14, 2011.

 

(5)                                  The amount shown represents actual salary earned in 2011 based upon an annual base salary of $500,000.

 

(6)                                  The amount shown represents actual salary earned in 2011 based upon an annual base salary of $330,000.

 

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(7)                                  Represents the aggregate grant date fair value of awards of stock options granted during the year computed in accordance with FASB ASC 718.  For additional information, including information regarding the assumptions used when valuing the awards, refer to Note 2 to our financial statements included elsewhere in this prospectus.

 

(8)                                  Represents bonus amounts earned under our annual performance-based cash bonus program.

 

(9)                                  Except for Dr. O’Dea in 2011, all amounts are attributable to life insurance premiums paid by us.  The 2011 amount for Dr. O’Dea represents $1,452 attributable to life insurance premiums paid by us and $41,118 in severance payments and $3,640 for medical and dental insurance premium reimbursements made in connection with his resignation as our employee.

 

Narrative Disclosure to Summary Compensation Table

 

Prior to the Merger in May 2011, we paid no compensation to our named executive officers and we had no contracts, agreements, plans or arrangements, whether written or unwritten, that provided for payments to any named executive officers.  However, to provide meaningful disclosure, we have included in the table above compensation that was paid to our named executive officers by the Former Operating Company prior to the Merger as well as compensation that we paid to named executive officers following the Merger.

 

We do not currently, and the Former Operating Company did not prior to the Merger, have any formal policy for determining the compensation of executive officers.  Base salaries for our named executive officers have been established through arm’s length negotiation at the time an executive was hired, whether by us or by the Former Operating Company.  The Former Operating Company’s board of directors annually reviewed and evaluated, with input from the President and Chief Executive Officer, the need for adjustment of the base salaries of named executive officers based on changes and expected changes in the scope of an executive’s responsibilities, including promotions, the individual contributions made by and performance of the executive during the prior fiscal year, the executive’s performance over a period of years, overall labor market conditions, the relative ease or difficulty of replacing the executive with a well-qualified person, the Former Operating Company’s overall growth and development as a company and general salary trends in the Former Operating Company’s industry.  Our Compensation Committee has been charged with developing a formal policy for determining and reviewing the compensation of executive officers on a regular basis going forward.

 

Each named executive officer is eligible to receive an annual performance-based cash bonus, in an amount up to a fixed percentage of his base salary.  Prior to the Merger, at the beginning of each year the Former Operating Company’s board developed, with input from the President and Chief Executive Officer, a list of goals for the year that would be used as a guideline to assess the annual performance of the named executive officers.  As soon as practical after the year was completed, the board reviewed actual performance against the stated goals and determined subjectively what it believed to be the appropriate level of cash bonus, if any.  Following the Merger, our Compensation Committee continued this practice for calendar year 2011.

 

Dr. O’Dea resigned as our employee on November 14, 2011.  Under the terms of a separation agreement between us and Dr. O’Dea, we agreed to pay Dr. O’Dea an aggregate severance amount of $164,472, paid in accordance with our normal payroll procedures over the six-month period commencing on the next regularly scheduled payroll date after the effective date of the agreement.  We also agreed to reimburse Dr. O’Dea for the portion of any COBRA premiums which he incurs that we would have paid had he remained employed by us during such six-month period.  In addition, the severance agreement provides that Dr. O’Dea may exercise the portion of his stock options that was vested as of November 14, 2011 until February 14, 2012, subject to the terms and conditions of the applicable stock incentive plans and Dr. O’Dea’s continued compliance with the terms of his separation agreement and a confidentiality

 

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and non-competition agreement between us and Dr. O’Dea, pursuant to which Dr. O’Dea has agreed not to compete with the business of the Company or solicit for hire our employees for a period one year following his termination.

 

Each of the other named executive officers other than Dr. O’Dea are at-will employees eligible for discretionary bonus and equity incentive awards with certain severance rights discussed further below.  The following named executive officers have the following target bonus percentages:

 

·                  Mr. Wyzga — 50%

 

·                  Dr. Lyttle — 40% (50% for 2011)

 

·                  Mr. Harvey — 30%

 

·                  Mr. Brenner — 30%.

 

For 2011, each named executive officer, other than Mr. Wyzga, had the opportunity to achieve a bonus equal to the named executive officer’s respective target bonus by achievement of individual performance goals, with the compensation committee reserving the right to award amounts in excess of target bonus on a discretionary basis.  Mr. Wyzga was not eligible for a bonus in 2011.  The individual goals for 2011 were of different weighted importance and included completion of certain financing and public offering objectives, completion of organizational objectives and the implementation and successful execution of various elements related to the preclinical studies and clinical trials for our products, including the Phase 3 study for our BA058 Injection product. In December 2011, the Compensation Committee considered performance against these goals and determined to award the named executive officers bonus payments in the amounts set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above.  Dr. O’Dea did not qualify to receive a bonus in 2011.

 

Employment, Severance and Change in Control Arrangements

 

On December 1, 2011, we entered into a letter employment agreement with Mr. Wyzga, pursuant to which Mr. Wyzga agreed to serve as our Chief Executive Officer effective December 5, 2011.  The letter agreement provides for an initial base salary of $500,000 and the opportunity to earn an annual cash incentive award based on performance with a target value equal to 50% of Mr. Wyzga’s annual base salary beginning in 2012.  In addition, Mr. Wyzga is eligible to receive a one-time special bonus ranging from 25% to 50% of his annual base salary based upon the attainment of certain milestones relating to our consummation of a successful financing transaction.

 

In the event Mr. Wyzga’s employment is terminated by us without cause or due to Mr. Wyzga’s resignation for good reason, then subject to his executing a general release of claims, Mr. Wyzga will be entitled to receive:

 

·                  base salary continuation payments for 12 months,

 

·                  payment of, or reimbursement for, continued medical care premiums for 12 months and

 

·                  the annual bonus that he would have earned if he remained employed through the end of the year in which his termination occurs, based upon actual performance as determined by the board.

 

If Mr. Wyzga’s employment is terminated without cause or due to Mr. Wyzga’s resignation for good reason within 12 months following a change in control of us, then subject to his executing a general

 

26



 

release of claims, Mr. Wyzga will be entitled to receive the severance benefits described in the first two bullet points above.  In such case, Mr. Wyzga will also be entitled to receive:

 

·                  payment of his target annual bonus for the year in which termination occurs and

 

·                  accelerated vesting of all outstanding Company equity awards.

 

On November 30, 2011, we entered into a transition agreement with Dr. Lyttle pursuant to which Dr. Lyttle resigned as our President and Chief Executive Officer and as a member of our board of directors, effective as of December 5, 2011, and agreed to serve as our Chief Scientific Officer through June 1, 2012, unless the agreement is earlier terminated.  The transition agreement provides that Dr. Lyttle will continue to receive his base annualized salary at the rate in effect as of immediately prior to the effective date of the agreement and will be eligible to earn for 2012 a discretionary cash performance bonus under our bonus plan or program applicable to senior executives based on a target bonus amount equal to forty 40% of Dr. Lyttle’s annualized base salary, but with the actual amount of any such bonus being determined on the basis of the attainment of Company performance metrics and/or individual performance objectives, in each case, as established and approved by our board of directors in its sole discretion.

 

In the event Dr. Lyttle’s employment is terminated due to his death prior to March 1, 2012 or for any reason other than for cause after March 1, 2012 (including automatic termination on June 1, 2012), Dr. Lyttle will be entitled to receive:

 

·                  his 2012 bonus, prorated based on the number of days in the calendar year through the date of termination of his employment and

 

·                  any vested and outstanding options to purchase shares of our common stock held by Dr. Lyttle on such date will remain exercisable until the later to occur of:

 

·                  the first anniversary of the date of termination of his employment or

 

·                  the date that is 30 days after the date on which our common stock first becomes listed on a national stock exchange, subject in each case to Dr. Lyttle’s execution of a release of claims.

 

On November 9, 2011, we entered into a letter employment agreement with Dr. Brenner pursuant to which Dr. Brenner commenced employment on that date and agreed to serve our Chief Medical Officer effective December 1, 2011.  The letter agreement provides for an initial base salary of $330,000 and the opportunity to earn an annual cash incentive award based on performance with a target value equal to 30% of Dr. Brenner’s annual base salary, prorated for any partial year of employment.

 

In the event Dr. Brenner’s employment is terminated by us without cause or due to Dr. Brenner’s resignation for good reason, then subject to his executing a general release of claims, Dr. Brenner will be entitled to receive:

 

·                  base salary continuation payments for nine months,

 

·                  payment of, or reimbursement for, continued medical care premiums for six months,

 

·                  a prorated portion of his annual bonus for the year in which his termination occurs, if the board determines to award him a bonus for the year, and

 

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·                  if the termination occurs within the first twelve months of his employment, accelerated vesting of his outstanding equity awards that would have vested based solely upon the passage of time during the six-month period following his termination.

 

If Dr. Brenner’s employment is terminated without cause or due to Dr. Brenner’s resignation for good reason within 12 months following a change in control of us, then subject to his executing a general release of claims, Dr. Brenner will be entitled to receive the severance benefits described in the first two bullet points above.  In such case, Dr. Brenner will also be entitled to receive:

 

·                  payment of a prorated portion of his target annual bonus for the year in which termination occurs and

 

·                  accelerated vesting of all outstanding Company equity awards.

 

Mr. Harvey’s agreement provides that if his employment is terminated without cause or he resigns with good reason, he will receive six months’ salary in severance payments, payable in accordance with the payroll practice then in effect, and the continuation of health insurance at no cost to him for six months and all options which would have vested in the six months following such termination shall become immediately exercisable.  If we are acquired, 50% of his then unvested options will become immediately vested and exercisable.

 

Outstanding Equity Awards at Fiscal Year End

 

The following table sets forth information regarding the outstanding equity awards held by our named executive officers as of December 31, 2011.  Prior to the Merger, we did not grant equity awards to our named executive officers.  In connection with the Merger, we assumed all the options granted to our named executive officers by the Former Operating Company.

 

 

 

Number of Securities
Underlying Unexercised Options

 

Option Exercise 

 

Option
Expiration

 

Name

 

Exercisable

 

Unexercisable

 

Price

 

Date

 

Michael S. Wyzga

 

0

 

1,530,000

(1)

$

3.89

 

12/14/21

 

 

 

 

 

 

 

 

 

 

 

C. Richard Lyttle

 

108,333

 

0

 

$

1.50

 

10/28/14

 

 

 

91,864

 

0

 

$

0.90

 

7/12/17

 

 

 

202,672

 

0

 

$

1.20

 

5/8/18

 

 

 

86,376

 

0

 

$

1.20

 

12/3/18

 

 

 

17,372

 

260,575

(2)

$

3.22

 

11/6/21

 

 

 

 

 

 

 

 

 

 

 

B. Nicholas Harvey

 

53,389

 

0

 

$

0.90

 

7/12/17

 

 

 

63,335

 

0

 

$

1.20

 

5/8/18

 

 

 

20,244

 

6,748

(3)

$

1.20

 

12/3/18

 

 

 

5,429

 

81,429

(2)

$

3.22

 

11/6/21

 

 

 

 

 

 

 

 

 

 

 

Louis Brenner

 

0

 

351,400

(4)

$

3.89

 

12/14/21

 

 

 

0

 

62,700

(5)

$

3.89

 

12/14/21

 

 

 

0

 

37,600

(6)

$

3.89

 

12/14/21

 

 

 

 

 

 

 

 

 

 

 

Louis O’Dea

 

22,642

 

0

 

$

1.50

 

2/14/12

 

 

 

41,547

 

0

 

$

0.90

 

2/14/12

 

 

 

70,935

 

0

 

$

1.20

 

2/14/12

 

 

 

22,675

 

0

 

$

1.20

 

2/14/12

 

 

 

6,081

 

0

 

$

3.22

 

2/14/12

 

 

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(1)                                  These stock options vest as to 25% of the underlying shares on December 5, 2012 and as to 6.25% of such shares on the first day of each calendar quarter thereafter.

 

(2)                                  These stock options vest in fifteen substantially equal installments on the first day of each calendar quarter beginning on January 1, 2012.

 

(3)                                  These stock options vest in four equal installments on the first day of each calendar quarter ending October 1, 2012.

 

(4)                                  These stock options vest as to 25% of the underlying shares on November 9, 2012 and as to 6.25% of such shares the first day of each calendar quarter thereafter.

 

(5)                                  These stock options vest, if at all, upon the date that board of directors determines that certain enrollment targets are achieved on or prior to a specified date with respect to the Phase 3 study of the company’s BA058 Injection product.

 

(6)                                  These stock options vest, if at all, upon the date that the board of directors resolves that a New Drug Application for the company’s BA058 Injection product has been submitted to the FDA on or prior to a specified date.

 

Director Compensation

 

The following table summarizes the compensation for director services earned by our non-employee directors during 2011. No director who is also an employee receives additional compensation for providing director services. Historically, neither we nor the Former Operating Company has had any formal policy governing the compensation of directors, instead negotiating compensation for individual directors at the time they commence providing services. Mr. Graves and Mr. Auerbach each receive an annual cash retainer of $7,500 and $1,500 per board or committee meeting attended.  None of our other directors receive cash compensation for providing director services to us.

 

We intend to adopt a non-employee director compensation policy.  As currently contemplated, the policy will provide for non-employee directors to receive annual cash retainers based upon board and committee participation as well as grants of options to purchase shares of our common stock both upon their commencing service with us and annually thereafter. We are still in the process of implementing this policy and, accordingly, it is subject to change.

 

During 2011, we did not grant equity-based awards as compensation to any of our directors other than Dr. Stoner and Mr. Graves, each of whom received an option to purchase shares of our common stock in November 2011 in recognition of commencing service on our board of directors. Dr. Stoner received an option to purchase up to 60,000 shares, and Mr. Graves received an option to purchase up to 256,666 shares. These options vest in twelve equal installments, with the first installment vesting on the grant date and the remaining installments vesting on the first day of each calendar quarter through July 1, 2014. The exercise price of these options is $3.22 per share, the fair value of our common stock on the date of grant as determined by our board of directors.

 

Name and Principal Position 

 

Fees Earned
of Paid in
Cash
($)

 

Option
Awards
($)(1)

 

Total
($)

 

Alan H. Auerbach(2)

 

9,000

 

0

 

9,000

 

Jonathan J. Fleming(3)

 

0

 

0

 

0

 

Ansbert K. Gadicke, M.D.(4)

 

0

 

0

 

0

 

Kurt C. Graves(5)

 

12,500

 

457,504

 

470,004

 

Martin Münchbach, Ph.D.(6)

 

0

 

0

 

0

 

Elizabeth Stoner, M.D.(7)

 

0

 

106,949

 

106,949

 

 

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(1)                                  Represents the aggregate grant date fair value of awards of stock options granted during the year computed in accordance with FASB ASC 718.  For additional information, including information regarding the assumptions used when valuing the awards, refer to Note 2 to our financial statements included elsewhere in this prospectus.

 

(2)                                  As of December 31, 2011, Mr. Auerbach held no stock awards and 256,666 options to purchase shares of our common stock.

 

(3)                                  As of December 31, 2011, Mr. Fleming did not hold any stock awards or option awards.

 

(4)                                  As of December 31, 2011, Dr. Gadicke did not hold any stock awards or option awards.

 

(5)                                  As of December 31, 2011, Mr. Graves held no stock awards and 256,666 options to purchase shares of our common stock.

 

(6)                                  As of December 31, 2011, Dr. Münchbach did not hold any stock awards or option awards.

 

(7)                                  As of December 31, 2011, Dr. Stoner held no stock awards and 60,000 options to purchase shares of our common stock.

 

2003 Long-Term Incentive Plan

 

Generally, in the Merger, we assumed the Former Operating Company’s 2003 Long Term Incentive Plan, or the 2003 Plan, and all options to acquire common stock of the Former Operating Company issued thereunder.  The 2003 Plan is intended to assist us and our affiliates in attracting and retaining employees and consultants of outstanding ability and to promote the identification of their interests with those of our stockholders and our affiliates.  Only incentive stock options and non-statutory stock options have been granted under the 2003 Plan.  As of December 31, 2011, we had 1,256,078 options issued and unexercised under the 2003 Plan, 1,063,671 of which were vested.  In connection with the adoption and approval of the 2011 Plan, we determined not to make any further awards under the 2003 Plan after November 7, 2011, which we refer to as the “suspension” of the 2003 Plan.  No new awards may be granted under the 2003 Plan, but awards outstanding at the time of suspension remain outstanding in accordance with their terms.  If an option or right expires or terminates for any reason (other than termination by virtue of the exercise of a related option or related right, as the case may be) without having been fully exercised, if shares of restricted stock are forfeited, or if shares covered by an incentive share award or performance award are not issued or are forfeited, the unissued or forfeited shares that had been subject to the award become available for the grant of additional awards under the 2011 Plan.

 

AdministrationThe compensation committee of the board of directors administers the 2003 Plan.  In the event that there is no compensation committee, the board of directors administers the plan.  The committee or the board may delegate authority to administer the 2003 Plan to any other committee.

 

Incentive Stock OptionIncentive stock options are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code and are granted pursuant to incentive stock option agreements.  The plan administrator determines the exercise price for an incentive stock option, which may not be less than 100% of the fair market value of the stock underlying the option determined on the date of grant.  Notwithstanding the foregoing, incentive options granted to employees who own, or are deemed to own, more than 10% of our voting stock, must have an exercise price not less than 110% of the fair market value of the stock underlying the option determined on the date of grant.

 

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Nonstatutory Stock Options.  Nonstatutory stock options are granted pursuant to nonstatutory stock option agreements.  The plan administrator determines the exercise price for a nonstatutory stock option.

 

Vesting.  Options granted under the plan generally vest in sixteen (16) quarterly installments, each quarterly installment being equal in number of shares as possible (as determined by us in our reasonable discretion), with the first quarterly installment vesting one quarter after the date of the grant, and an additional quarterly installment vesting on the first day of each calendar quarter thereafter, until all of the shares subject to the option are fully vested and the option may be exercised as to 100% of the shares issuable upon exercise thereof.

 

Changes to Capital StructureIn the event of certain types of changes in our capital structure, such as a share split, the number of shares and exercise price or strike price, if applicable, of all outstanding awards will be appropriately adjusted.

 

DividendsAny award under the 2003 Plan may confer upon the recipient the right to receive dividend payments or dividend equivalent payments with respect to the shares subject to the award.  Such dividend payments may be paid currently or credited to an account in favor of the recipient.  Such dividends may be settled in cash or shares, as determined by the plan administrator.

 

2011 Equity Incentive Plan

 

We adopted a new equity incentive plan entitled the 2011 Equity Incentive Plan, or the 2011 Plan, on November 7, 2011, which our board of directors voted to amend on December 15, 2011 and January 31, 2012, and which has been approved by our stockholders.  The 2011 Plan was adopted for the benefit of employees, consultants and our non-employee directors and our affiliates.

 

The 2011 Plan provides for the grant of incentive stock options, or ISOs, to employees, and for the grant of nonqualified stock options to purchase shares of common stock, restricted stock, restricted stock units, stock appreciation rights, stock grants, performance units and performance awards to employees, consultants and non-employee directors, for the purposes of encouraging their ownership of common stock and providing additional incentives to promote the success of our business through the grant of awards of or pertaining to the common stock.  ISOs are intended to be “incentive stock options,” as that term is defined in Section 422 of the Code.

 

The Employee Retirement Income Security Act of 1974 does not govern the 2011 Plan.  In addition, the 2011 Plan does not qualify under Section 401(a) of the Code.

 

Securities Subject to the 2011 Plan.  Under the terms of the 2011 Plan, the aggregate number of shares of common stock that may be subject to options and other awards is equal to the sum of (1) 2,655,064 shares of common stock and (2) any shares underlying awards outstanding under the 2003 Plan as of November 7, 2011 that, on or after that date, are forfeited or lapse without the issuance of shares.  The maximum number of shares of common stock that may be issued under the 2011 Plan, including ISOs, is 4,252,953.  The shares of common stock covered by the 2011 Plan are authorized but unissued shares, treasury shares or common stock purchased on the open market.

 

To the extent that an award terminates, expires or lapses for any reason or is settled in cash, any shares subject to the award (to the extent of such termination, expiration, lapse or cash settlement) may be used again for new grants under the 2011 Plan.  Shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any award or the exercise price of an option may be used again for new grants under the 2011 Plan.

 

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The maximum number of shares of common stock that may be subject to one or more awards to a participant pursuant to the 2011 Plan during any calendar year is 1,250,000 and the maximum amount that may be paid to a participant in cash during any calendar year with respect to cash-based awards is $2,000,000.  However, these limits will not apply to certain awards granted under the 2011 Plan until the earliest to occur of the first material modification of the 2011 Plan following the date the shares are listed on any securities exchange or designated on an interdealer quotation system, or the Public Trading Date, the issuance of all of the shares reserved for issuance under the 2011 Plan, the expiration of the 2011 Plan or the first meeting of our stockholders at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Public Trading Date occurs.

 

Administration. The 2011 Plan provides that the Compensation Committee of our board of directors, or the Compensation Committee, currently administers the 2011 Plan, although our board of directors may exercise any powers and responsibilities assigned to the Compensation Committee at any time.

 

The Compensation Committee has the authority to administer and interpret the 2011 Plan, including the power to determine eligibility, the types and sizes of awards, the price, timing and other terms and conditions of awards and the acceleration or waiver of any vesting or forfeiture restriction.  The Compensation Committee may delegate to an executive officer or officers the authority to grant awards to non-officer employees and to consultants, in accordance with any guidelines as the Compensation Committee may determine.

 

Eligibility.  Persons eligible to participate in the 2011 Plan include employees, consultants and our non-employee directors and our affiliates, as determined by the Compensation Committee.  Only our employees and certain of our parent and subsidiary corporations are eligible to receive grants of options intended to qualify as ISOs.

 

Stock Options.  The 2011 Plan authorizes the grant of stock options, including ISOs and nonqualified stock options.  Under the 2011 Plan, the exercise price of ISOs granted pursuant to the 2011 Plan will not be less than the fair market value of the common stock on the date of grant, and the exercise price of nonqualified stock options granted pursuant to the 2011 Plan will be determined by the Compensation Committee.  Stock options are subject to such vesting and exercisability conditions as are determined by the Compensation Committee and set forth in a written stock option agreement.  In no event may an ISO have a term extending beyond the tenth anniversary of the date of grant.  ISOs granted to any person who owns, as of the date of grant, stock possessing more than ten percent of the total combined voting power of all classes of our stock, however, are required to have an exercise price that is not less than 110% of the fair market value of the common stock on the date of grant and may not have a term extending beyond the fifth anniversary of the date of grant.  The aggregate fair market value of the shares with respect to which options intended to be ISOs are exercisable for the first time by an employee in any calendar year may not exceed $100,000, or such other amount as the Code provides without being treated as a nonqualified stock option.

 

Stock Appreciation Rights.  A stock appreciation right, or SAR, is the right to receive payment of an amount equal to the excess of the fair market value of a share of common stock on the date of exercise of the SAR over the grant price of the SAR.  The grant price of each SAR granted under the 2011 Plan will be no less than the fair market value of a share of common stock on the date of grant of the SAR.  The Compensation Committee is authorized to issue SARs in such amounts and on such terms and conditions as it may determine, consistent with the terms of the 2011 Plan.

 

Restricted Stock.  Restricted stock is the grant of shares of common stock at a price, if any, determined by the Compensation Committee, which shares are nontransferable and may be subject to forfeiture until specified vesting conditions are met.  Restricted stock will be evidenced by a written

 

32



 

agreement.  During the period of restriction, restricted stock is subject to restrictions and vesting requirements, as provided by the Compensation Committee.  The restrictions may lapse in accordance with a schedule or other conditions determined by the Compensation Committee.

 

Restricted Stock Units.  A restricted stock unit provides for the issuance of a share of common stock at a future date upon the satisfaction of specific conditions set forth in the applicable award agreement.  The Compensation Committee will specify, or permit the restricted stock unit holder to elect, the conditions and dates upon which payments under the restricted stock units will made, which dates may not be earlier than the date as of which the restricted stock units vest and which conditions and dates will be subject to compliance with Section 409A of the Code.  On the distribution dates, we will transfer to the participant one unrestricted, fully transferable share of the common stock (or the fair market value of one such share of common stock in cash) for each restricted stock unit scheduled to be paid out on such date and not previously forfeited.

 

Performance Units.  Performance units represent the participant’s right to receive an amount, based on the value of the common stock, if performance goals established by the Compensation Committee are achieved.  The Compensation Committee will determine the applicable performance period, the performance goals and such other conditions that apply to the performance unit.

 

Performance Awards.  A performance award is cash bonus award, stock bonus award, performance award or incentive award that is paid in cash, shares of common stock or a combination of both, as determined by the Compensation Committee.  The Compensation Committee will determine the applicable performance period, the performance goals and such other conditions that apply to the performance award.

 

Stock Grants.  A stock grant is a grant in the form of shares of common stock.  The number or value of shares of any stock grant will be determined by the Compensation Committee.

 

Qualified Performance-Based Awards.  Any award under the 2011 Plan, other than a stock grant, may be issued as a qualified performance-based award that is earned based on the attainment of performance criteria.  The Compensation Committee may grant qualified performance-based awards to employees who are or may be “covered employees,” as defined in Section 162(m) of the Code, that are intended to be performance-based compensation within the meaning of Section 162(m) of the Code in order to preserve the deductibility of these awards for federal income tax purposes.  The qualified performance-based awards may be linked to any one or more of the performance criteria set forth in the 2011 Plan or other specific criteria determined by the Compensation Committee.

 

Dividends, Dividend Equivalents.  The 2011 Plan authorizes the Compensation Committee to provide a participant with the right to receive dividends or dividend equivalents with respect to shares of common stock covered by an award granted under the 2011 Plan.  Dividends and dividend equivalents may be settled in cash or shares of common stock, as determined by the Compensation Committee.

 

Payment Methods.  The Compensation Committee determines the methods by which payments by any option granted under the 2011 Plan may be paid, including, without limitation:

 

·                  cash or check,

 

·                  by placing a market sell order with a broker with respect to shares of common stock then-issuable upon exercise or vesting of an award, and directly the broker to pay a sufficient portion of the net proceeds of the sale to us in satisfaction of the aggregate payments required (provided that payment of such proceeds is then made to us upon settlement of such sale),

 

33



 

·                  shares of common stock issuable pursuant to the award or previously held, or

 

·                  such other legal consideration deemed acceptable by the Compensation Committee.

 

Forfeiture of Unvested Awards; Leave of Absence.  Upon the termination of service of the holder of an option or stock appreciation right, unless otherwise provided by the Compensation Committee, the award generally will expire on a date not later than three months after the termination of service.  Except as otherwise determined by the Compensation Committee, in the event that the employment or services of the holder of an award is terminated, the unvested portion of the award will generally be forfeited or may be subject to repurchase by us, and will cease to vest or become exercisable after the termination.

 

The Compensation Committee may provide that an award will continue to vest for some or all of the period of a leave of absence, or that vesting of an award will be tolled during a leave of absence, consistent with applicable law.

 

Transferability.  Generally, awards under the 2011 Plan may only be transferred by will or the laws of descent and distribution, unless and until such award has been exercised or the shares underlying such award have been issued and all restrictions applicable to such shares have lapsed.  However, subject to certain terms and conditions, the Compensation Committee may permit a holder to transfer a nonqualified stock option or shares of restricted stock to any “family member” under applicable securities laws.

 

Adjustments; Corporate Transactions.  In the event of a declaration of a stock dividend, a stock split, a reverse stock split, a recapitalization, a reclassification, reorganization or a similar occurrence, the Compensation Committee will make appropriate adjustments to:

 

·                  the number and kind of shares available for future grants;

 

·                  the number and kind of shares covered by each outstanding award;

 

·                  the grant or exercise price under each outstanding award; and

 

·                  the repurchase right of each share of restricted stock.

 

In the event that such a corporate action occurs that is not included in the list of actions covered in the immediately preceding sentence, the Compensation Committee may equitably adjust any outstanding awards under the 2011 Plan in such manner as it may deem equitable and appropriate.

 

In the event of a merger or consolidation, the sale or exchange of all common stock, the sale, transfer or disposition of all or substantially all of our assets or our liquidation or dissolution, the Compensation Committee may take one or more of the following actions with respect to outstanding options and SARs:

 

·                  provide for the assumption or substitution of the awards;

 

·                  cancel the awards;

 

·                  accelerate the awards in whole or in part;

 

·                  cash out the awards;

 

·                  convert the awards into the right to receive liquidation proceeds; or

 

34



 

·                  any combination of the above.

 

Upon our liquidation or dissolution, except as otherwise provided in an applicable award agreement, all forfeiture restrictions and/or performance goals with respect to an award will automatically be deemed terminated or satisfied, as applicable.

 

In the event of a “change of control” of us (as defined in the 2011 Plan), the Compensation Committee will take any action it deems necessary or appropriate, including to accelerate an award in whole or in part.  A SAR granted in tandem with a stock option that can only be exercised during limited periods following a change of control of us may entitle the holder to receive an amount based on the highest price paid or offered for the common stock in a transaction relating to the change of control or paid during the thirty-day period immediately preceding the change of control.

 

Termination or Amendment.  Our board of directors may terminate, amend or modify the 2011 Plan at any time.  However, stockholder approval of an amendment is required to increase the aggregate share limit, change the description of eligible participants or to the extent necessary to comply with applicable law.

 

The term of the 2011 Plan will expire on, and no ISO may be granted pursuant to the 2011 Plan after, November 7, 2021.

 

Tax Withholding.  We may require participants to discharge applicable withholding tax obligations with respect to any award granted to the participant.  The plan administrator may in its discretion allow a holder to meet any such withholding tax obligations by electing to have us withhold shares of common stock otherwise issuable under any award (or allow the return of shares of common stock) having a fair market value equal to the sums required to be withheld.

 

Risk Assessment in Compensation Programs

 

We have assessed our compensation programs and concluded that our compensation practices do not create risks that are reasonably likely to have a material adverse effect on us.

 

DISSENTERS’ RIGHTS OF APPRAISAL

 

Under Delaware law, stockholders will not have any opportunity to dissent or appraisal rights in connection with the actions described in this Information Statement.

 

INTEREST OF CERTAIN PERSONS IN OR OPPOSITION
TO MATTERS TO BE ACTED UPON

 

The officers and directors of the Company do not have any substantial interest in the matters acted upon pursuant to the Stockholder Consent, other than in their respective roles as officers or directors of the Company.

 

35



 

EXPENSE OF INFORMATION STATEMENT

 

The expenses of mailing this Information Statement will be borne by us, including expenses in connection with the preparation and mailing of this Information Statement and all documents that now accompany or may hereafter supplement it. We do not contemplate that brokerage houses, custodians, nominees, and fiduciaries will be requested to forward the Information Statement to the beneficial owners of our common stock held of record by such persons, and we will not reimburse them for their expenses incurred in connection therewith.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Information Statement may include forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.  These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,” “would,” “could,” and similar expressions or phrases, or the negative of those expressions or phrases identify forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we caution you that these statements are based on our projections of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause our actual results, level of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. These statements, by their nature, involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including factors discussed in other filings of ours with the SEC. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. Our forward-looking statements speak only as of the date of this Information Statement, and we expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law.

 

DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS

 

                Only one Information Statement is being delivered to multiple security holders sharing an address unless the Company has received contrary instructions from one or more of the security holders. The Company will deliver promptly upon written or oral request a separate copy of the Information Statement to a security holder at a shared address to which a single copy of the Information Statement was delivered. A security holder can notify the Company that the security holder wishes to receive a separate copy of the Information Statement by sending a written request to the Company at Radius Health, Inc., 201 Broadway, 6th Floor, Cambridge, MA 02139, or by calling the Company at (617) 551-4700 and requesting a copy of the Information Statement. Security holders who receive multiple copies of the Information Statement at their address and would like to request that only a single copy of communications be delivered to the shared address may do so by making either a written or oral request to the Company contacts listed above.

 

36



 

ADDITIONAL INFORMATION

 

We are subject to the reporting and information requirements of the Exchange Act, and in accordance therewith file periodic reports, proxy statements and other information with the SEC.  You can read periodic reports, proxy statements and other information filed us in accordance with the Exchange Act can be read and copied at the Public Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C. 20549.  Electronic reports, proxy statements and other information filed through the SEC’s Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) are publicly available through the SEC’s web site (http://www.sec.gov).

 

 

By Order of the Board of Directors

 

 

 

 

 

Michael S. Wyzga

 

President and Chief Executive Officer

 

Cambridge, Massachusetts

February      , 2012

 

37



 

EXHIBIT A

 

Radius Health, Inc.

 

Action by Written Consent of the Stockholders

in Lieu of a Special Meeting

 

                The undersigned, being the holders of record of outstanding shares of capital stock of Radius Health, Inc., a Delaware corporation (the “Corporation”), representing the Senior Majority, as defined in the Corporation’s Certificate of Designations of the Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock, Series A-5 Convertible Preferred Stock and Series A-6 Convertible Preferred Stock (the “Certificate”), and thereby constituting not less than the minimum voting power of the issued and outstanding shares of capital stock of the Corporation necessary to approve the transactions and waive the rights set forth in the resolutions below, hereby consent, pursuant to the Delaware General Corporation Law, Section 242 and Section 228, and Section 6, Paragraph (g), Clause (ii) of the Certificate of Designations, to the adoption of the following resolutions, conditioned upon the expiration of 20 days following the mailing of an information statement to the Corporation’s stockholders as required under Rule 14c-2 under the Securities Exchange Act of 1934, as amended.

 

Amendment of Certificate of Designations

 

RESOLVED:                                               That the amendment and restatement of the first sentence of Section 3(a) of the Certificate to read as follows is approved:

 

“The holders of shares of Series A-1 Stock shall be entitled to receive a per share dividend at the rate of 8% of the Series A-1 Original Purchase Price (as defined in Section 8 hereof) per annum, compounding annually (the “Series A-1 Accruing Dividend”), and which will accrue on a daily basis, whether or not declared, commencing on the date of issuance of such share of Series A-1 Stock.”

 

RESOLVED:                                               That the amendment and restatement of the first sentence of Section 3(b) of the Certificate to read as follows is approved:

 

“The holders of shares of Series A-2 Stock shall be entitled to receive a per share dividend at the rate of 8% of the Series A-2 Original Purchase Price (as defined in Section 8 hereof) per annum, compounding annually (the “Series A-2 Accruing Dividend”), and which will accrue on a daily basis, whether or not declared, commencing on the date of issuance of such share of Series A-2 Stock.”

 

RESOLVED:                                               That the amendment and restatement of the first sentence of Section 3(c) of the Certificate to read as follows is approved:

 

“The holders of shares of Series A-3 Stock shall be entitled to receive a per share dividend at the rate of 8% of the Series A-3 Original Purchase Price (as defined in Section 8 hereof) per annum, compounding annually (the “Series A-3 Accruing Dividend”), and which will accrue on a daily basis, whether or not declared, commencing on the date of issuance of such share of Series A-3 Stock.”

 



 

RESOLVED:                                               That the amendment and restatement of Section 7(a) of the Certificate to read as follows is approved:

 

“Any Preferred Stockholder shall have the right, at any time or from time to time, to convert any or all of its shares of Preferred Stock into that number of fully paid and nonassessable shares of Common Stock for each share of Preferred Stock so converted equal to the quotient of the Series A-1 Original Purchase Price, Series A-2 Original Purchase Price, Series A-3 Original Purchase Price, Series A-4 Original Purchase Price, Series A-5 Original Purchase Price or Series A-6 Original Purchase Price, as applicable, for such share divided by the Series A-1 Conversion Price, the Series A-2 Conversion Price, Series A-3 Conversion Price, Series A-4 Conversion Price, Series A-5 Conversion Price or the Series A-6 Conversion Price (each as defined in Section 7(e)(i) hereof), as applicable, for such share of Preferred Stock, as last adjusted and then in effect; provided, however, that cash shall be paid in lieu of the issuance of fractional shares of Common Stock, as provided in Section 7(d) hereof.”

 

RESOLVED:                                               That the amendment and restatement of Section 7(c) of the Certificate to read as follows is approved:

 

If a Preferred Stockholder shall surrender more than one share of Preferred Stock for conversion at any one time or holds more than one share of Preferred Stock that is automatically converted, including without limitation pursuant to a Special Mandatory Conversion, then the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Preferred Stock so surrendered or held.”

 

RESOLVED:                                               That the amendment and restatement of the second sentence of Section 7(d) of the Certificate to read as follows is approved:

 

“The Corporation shall instead pay a cash adjustment for any such fractional interest in an amount equal to the Current Market Price thereof on the Conversion Date, as determined in accordance with Section 7(e)(viii) hereof.”

 

RESOLVED:                                               That the amendment and restatement of Section 10(a) of the Certificate to read as follows is approved:

 

“In the event that (i) the Senior Majority shall have elected to convert all shares of Preferred Stock or (ii) the Common Stock of the Corporation becomes listed for trading on a national securities exchange, then each share of Preferred Stock shall be converted automatically into shares of Common Stock, at the then effective conversion rate.  Each of the conversions set forth in this Section 10(a) is referred to as a “Special Mandatory Conversion.”  Notwithstanding anything contained herein to the contrary, including without limitation Section 3 hereof, all accrued but unpaid dividends on shares of Preferred Stock, including without limitation the Series A-1 Accruing Dividend, the Series A-2 Accruing Dividend and the Series A-3 Accruing Dividend, shall be paid, in the sole discretion of the Board of Directors, in cash or in shares of Common Stock (calculated based on the then effective

 



 

Series A-1 Conversion Price) upon the conversion of such shares of Preferred Stock in connection with a Special Mandatory Conversion.”

 

Amendment to 2011 Equity Incentive Plan

 

RESOLVED:                                              That, subject to the listing of the Corporation’s common stock on a national securities exchange, the amendment and restatement of the first two sentences of Section 4 of the 2011 Plan to read as follows is approved:

 

“At no time shall the number of shares of Stock issued pursuant to or subject to outstanding Awards granted under the Plan exceed the sum of (a) three million four hundred and five thousand and sixty-four (3,405,064) shares of Stock, and (b) any shares of Stock which as of the Effective Date are available for issuance under the Prior Plan, or are subject to awards under the Prior Plan which are forfeited or lapse unexercised and which following the Effective Date are not issued under the Prior Plan; subject, however, to the provisions of Section 8 of the Plan.  The maximum number of shares of Stock that may be issued pursuant to or subject to outstanding Awards, including Incentive Options, is five million two thousand nine hundred and fifty-three (5,002,953) (subject to the provisions of Section 8 of the Plan).”

 

Restated Certificate of Incorporation

 

RESOLVED:                                              That the Restated Certificate of Incorporation, in the form attached as Exhibit A-1 hereto (the “Restated Certificate”), which was previously adopted and approved by the Board of Directors of the Corporation, is hereby ratified, approved and adopted in all respects, subject to the listing of the Corporation’s common stock on a national securities exchange.

 

The written consent to the foregoing resolution may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument and this written consent may be executed and delivered by facsimile and upon such delivery by facsimile signature will be deemed to have the same effect as if the original signature has been delivered.

 

[Remainder of page intentionally left blank]

 



 

Each of the undersigned stockholders of Radius Health, Inc. have executed this Action by Written Consent of Stockholders on the date set forth opposite such stockholder’s signature.

 

 

MRNA II - HOLDINGS LLC

 

 

 

 

 

By: mRNA Fund II, L.P.

 

 

By: OBP MANAGEMENT II, L.P.

 

 

 

 

 

By:

 

 

Date:

Name: Jonathan Fleming

 

 

Title: General Partner

 

 

 

 

 

By: SAINTS CAPITAL GRANITE, L.P.

 

 

By: SAINTS CAPITAL GRANITE, LLC

 

 

 

 

 

By:

 

 

Date:

Name: Scott Halsted

 

 

Title: Managing Director

 

 

 

 

 

 

 

 

OBP IV – HOLDINGS LLC

 

 

 

 

 

By: OXFORD BIOSCIENCE PARTNERS IV, L.P.

 

 

By: OBP MANAGEMENT IV, L.P.

 

 

 

 

 

By:

 

 

Date:

Name: Jonathan Fleming

 

 

Title: General Partner

 

 

 

 

 

By: SAINTS CAPITAL GRANITE, L.P.

 

 

By: SAINTS CAPITAL GRANITE, LLC

 

 

 

 

 

By:

 

 

Date:

Name: Scott Halsted

 

 

Title: Managing Director

 

 

 

 

 

 

 

 

THE WELLCOME TRUST LIMITED, AS TRUSTEE OF THE WELLCOME TRUST

 

 

 

 

 

 

 

 

By:

 

 

Date:

Name: Peter Percisa Gray

 

 

Title: Managing Director

 

 

 



 

MPM BIOVENTURES III, L.P.

 

 

 

 

 

By:

MPM BioVentures III GP, L.P., its General Partner

 

 

By:

MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

 

 

Date:

Name: Ansbert Gadicke

 

 

Title: Series A Member

 

 

 

 

 

 

 

 

MPM BIOVENTURES III-QP, L.P.

 

 

 

 

 

By:

MPM BioVentures III GP, L.P., its General Partner

 

 

By:

MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

 

 

Date:

Name: Ansbert Gadicke

 

 

Title: Series A Member

 

 

 

 

 

 

 

 

MPM BIOVENTURES III GMBH & CO. BETEILIGUNGS KG

 

 

 

 

 

By:

MPM BioVentures III GP, L.P., in its capacity as the Managing Limited Partner

 

 

By:

MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

 

 

Date:

Name: Ansbert Gadicke

 

 

Title: Series A Member

 

 

 

 

 

MPM BIOVENTURES III PARALLEL FUND, L.P.

 

 

 

 

 

By:

MPM BioVentures III GP, L.P., its General Partner

 

 

By:

MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

 

 

Date:

Name: Ansbert Gadicke

 

 

Title: Series A Member

 

 

 



 

MPM ASSET MANAGEMENT INVESTORS 2003 BVIII LLC

 

 

 

 

 

By:

 

 

Date:

Name: Ansbert Gadicke

 

 

Title: Manager

 

 

 

 

 

MPM BIO IV NVS STRATEGIC FUND, L.P.

 

 

 

 

 

By:

MPM BioVentures IV GP LLC, its General Partner

 

 

By:

MPM BioVentures IV LLC, its Managing Member

 

 

 

 

 

By:

 

 

Date:

Name: Ansbert Gadicke

 

 

Title: Member

 

 

 

 

 

HEALTHCARE VENTURES VII, L.P.

 

 

 

 

 

By:

HealthCare Partners VII, L.P.

Its General Partner

 

 

 

 

 

 

 

 

By:

 

 

Date:

Name: Jeffrey Steinberg

 

 

Title: Administrative Partner

 

 

 

 

 

 

 

 

BB BIOTECH VENTURES II, L.P.

 

 

 

 

 

By:

BB Biotech Ventures GP (Guernsey) Limited

Its General Partner

 

 

 

 

 

By:

 

 

Date:

Name: Pascal Mahieux

 

 

Title: Director

 

 

 

 

 

BIOTECH GROWTH N.V.

 

 

 

 

 

 

 

 

By:

 

 

Date:

Name: H.J. van Neutegem

 

 

Title: Managing Director

 

 

 



 

HEALTHCARE PRIVATE EQUITY LIMITED PARTNERSHIP

 

 

 

 

 

By:

Waverley Healthcare Private Equity Limited

Its General Partner

 

Date:

 

 

 

By:

 

 

 

Name: Andrew November

 

 

Title: Director

 

 

 


 


 

EXHIBIT B

 

CERTIFICATE OF AMENDMENT

TO

THE CERTIFICATE OF DESIGNATIONS

OF THE

SERIES A-1 CONVERTIBLE PREFERRED STOCK,

SERIES A-2 CONVERTIBLE PREFERRED STOCK,

SERIES A-3 CONVERTIBLE PREFERRED STOCK,

SERIES A-4 CONVERTIBLE PREFERRED STOCK,

SERIES A-5 CONVERTIBLE PREFERRED STOCK,

and

SERIES A-6 CONVERTIBLE PREFERRED STOCK

OF

RADIUS HEALTH, INC.

 


 

Pursuant to Section 242 of the

General Corporation Law of the State of Delaware

 


 

Radius Health, Inc. (hereinafter referred to as the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify:

 

At a meeting of the Board of Directors of the Corporation, resolutions were duly adopted, pursuant to Section 242 of the General Corporation Law of the State of Delaware, setting forth amendments to the Certificate of Designations of the Series A-1 Convertible Preferred Stock, Series A-2 Convertible Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock, Series A-5 Convertible Preferred Stock and Series A-6 Convertible Preferred Stock filed with the Secretary of State of the State of Delaware on May 17, 2011 (as amended, the “Certificate”) and declaring such amendments to be advisable.  The stockholders of the Corporation duly approved such proposed amendments by written consent in accordance with Sections 228 and 242 of the General Corporation Law of the State of Delaware.  The resolutions setting forth the amendments are as follows:

 

RESOLVED:          That the first sentence of Section 3(a) of the Certificate be amended and restated in its entirety to read as follows:

 

“The holders of shares of Series A-1 Stock shall be entitled to receive a per share dividend at the rate of 8% of the Series A-1 Original Purchase Price (as defined in Section 8 hereof) per annum, compounding annually (the “Series A-1 Accruing Dividend”), and which will accrue on a daily basis, whether or not declared, commencing on the date of issuance of such share of Series A-1 Stock.”

 

RESOLVED:          That the first sentence of Section 3(b) of the Certificate be amended and restated in its entirety to read as follows:

 

“The holders of shares of Series A-2 Stock shall be entitled to receive a per share dividend at the rate of 8% of the Series A-2 Original Purchase Price (as defined in Section 8 hereof) per annum, compounding annually (the “Series A-2 Accruing

 



 

Dividend”), and which will accrue on a daily basis, whether or not declared, commencing on the date of issuance of such share of Series A-2 Stock.”

 

RESOLVED:          That the first sentence of Section 3(c) of the Certificate be amended and restated in its entirety to read as follows:

 

“The holders of shares of Series A-3 Stock shall be entitled to receive a per share dividend at the rate of 8% of the Series A-3 Original Purchase Price (as defined in Section 8 hereof) per annum, compounding annually (the “Series A-3 Accruing Dividend”), and which will accrue on a daily basis, whether or not declared, commencing on the date of issuance of such share of Series A-3 Stock.”

 

RESOLVED:          That Section 7(a) of the Certificate be amended and restated in its entirety to read as follows:

 

“Any Preferred Stockholder shall have the right, at any time or from time to time, to convert any or all of its shares of Preferred Stock into that number of fully paid and nonassessable shares of Common Stock for each share of Preferred Stock so converted equal to the quotient of the Series A-1 Original Purchase Price, Series A-2 Original Purchase Price, Series A-3 Original Purchase Price, Series A-4 Original Purchase Price, Series A-5 Original Purchase Price or Series A-6 Original Purchase Price, as applicable, for such share divided by the Series A-1 Conversion Price, the Series A-2 Conversion Price, Series A-3 Conversion Price, Series A-4 Conversion Price, Series A-5 Conversion Price or the Series A-6 Conversion Price (each as defined in Section 7(e)(i) hereof), as applicable, for such share of Preferred Stock, as last adjusted and then in effect; provided, however, that cash shall be paid in lieu of the issuance of fractional shares of Common Stock, as provided in Section 7(d) hereof.”

 

RESOLVED:          That Section 7(c) of the Certificate be amended and restated in its entirety to read as follows:

 

If a Preferred Stockholder shall surrender more than one share of Preferred Stock for conversion at any one time or holds more than one share of Preferred Stock that is automatically converted, including without limitation pursuant to a Special Mandatory Conversion, then the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Preferred Stock so surrendered or held.”

 

RESOLVED:          That the second sentence of Section 7(d) of the Certificate be amended and restated in its entirety to read as follows:

 

“The Corporation shall instead pay a cash adjustment for any such fractional interest in an amount equal to the Current Market Price thereof on the Conversion Date, as determined in accordance with Section 7(e)(viii) hereof.”

 

RESOLVED:          That Section 10(a) of the Certificate be amended and restated in its entirety to read as follows:

 

“In the event that (i) the Senior Majority shall have elected to convert all shares of Preferred Stock or (ii) the Common Stock of the Corporation becomes listed for trading on a national securities exchange, then each share of Preferred Stock shall be converted automatically into shares of Common Stock, at the then effective conversion rate.  Each of the conversions set forth in this Section 10(a) is referred to as a “Special Mandatory

 



 

Conversion.”  Notwithstanding anything contained herein to the contrary, including without limitation Section 3 hereof, all accrued but unpaid dividends on shares of Preferred Stock, including without limitation the Series A-1 Accruing Dividend, the Series A-2 Accruing Dividend and the Series A-3 Accruing Dividend, shall be paid, in the sole discretion of the Board of Directors, in cash or in shares of Common Stock (calculated based on the then effective Series A-1 Conversion Price) upon the conversion of such shares of Preferred Stock in connection with a Special Mandatory Conversion.”

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its Chief Financial Officer on this          day of February, 2012.

 

 

 

RADIUS HEALTH, INC.

 

 

 

 

 

 

 

By:

 

 

 

Name: B. Nicholas Harvey

 

 

Title: Chief Financial Officer

 



 

EXHIBIT C

 

RADIUS HEALTH, INC.

 

2011 EQUITY INCENTIVE PLAN

 

(AS AMENDED)

 

1.             PURPOSE

 

This Plan is intended to encourage ownership of Stock by employees, consultants and directors of the Company and its Affiliates and to provide additional incentive for them to promote the success of the Company’s business through the grant of Awards of or pertaining to shares of the Company’s Stock.  The Plan is intended to be an incentive stock option plan within the meaning of Section 422 of the Code, but not all Awards are required to be Incentive Options.

 

2.             DEFINITIONS

 

As used in the Plan, the following terms shall have the respective meanings set out below, unless the context clearly requires otherwise:

 

2.1.          Accelerate, Accelerated, and Acceleration, means: (a) when used with respect to an Option or Stock Appreciation Right, that as of the time of reference the Option or Stock Appreciation Right will become exercisable with respect to some or all of the shares of Stock for which it was not then otherwise exercisable by its terms; (b) when used with respect to Restricted Stock or Restricted Stock Units, that the Risk of Forfeiture otherwise applicable to the Stock or Units shall expire with respect to some or all of the shares of Restricted Stock or Units then still otherwise subject to the Risk of Forfeiture; and (c) when used with respect to Performance Units, that the applicable Performance Goals or other business objectives shall be deemed to have been met as to some or all of the Units.

 

2.2.          Affiliate means any corporation, partnership, limited liability company, business trust, or other entity controlling, controlled by or under common control with the Company.

 

2.3.          Award means any grant or sale pursuant to the Plan of Options, Stock Appreciation Rights, Performance Units, Performance Awards, Restricted Stock, Restricted Stock Units, or Stock Grants.

 

2.4.          Award Agreement means an agreement between the Company and the recipient of an Award, or other notice of grant of an Award, setting forth the terms and conditions of the Award.

 

2.5.          Board means the Company’s Board of Directors.

 

2.6.          Change of Control means the occurrence of any of the following after the date of the approval of the Plan by the Board:

 

(a)           a Transaction (as defined in Section 8.4), unless securities possessing more than 50% of the total combined voting power of the survivor’s or acquiror’s outstanding securities (or the securities of any parent thereof) are held by a person or persons who held securities possessing more than

 



 

50% of the total combined voting power of the Company’s outstanding securities immediately prior to that transaction, or

 

(b)           any person or group of persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in effect from time to time) directly or indirectly acquires, including but not limited to by means of a merger or consolidation, beneficial ownership (determined pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the said Exchange Act) of securities possessing more than 20% of the total combined voting power of the Company’s outstanding securities unless pursuant to a tender or exchange offer made directly to the Company’s stockholders that the Board recommends such stockholders accept, other than (i) the Company or an Affiliate, (ii) an employee benefit plan of the Company or any of its Affiliates, (iii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, or (iv) an underwriter temporarily holding securities pursuant to an offering of such securities, or

 

(c)           over a period of thirty-six (36) consecutive months or less there is a change in the composition of the Board such that a majority of the Board members (rounded up to the next whole number, if a fraction) ceases, by reason of one or more proxy contests for the election of Board members, to be composed of individuals who either (i) have been Board members continuously since the beginning of that period, or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in the preceding clause (i) who were still in office at the time that election or nomination was approved by the Board, or

 

(d)           a majority of the Board votes in favor of a decision that a Change of Control has occurred.

 

In addition and not withstanding the foregoing, if a Change of Control constitutes a payment event with respect to any Award which provides for the deferral of compensation and is subject to Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award must also constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5) to the extent required by Section 409A.

 

2.7.          Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and any regulations issued from time to time thereunder.

 

2.8.          Committee means the Compensation Committee of the Board, which in general is responsible for the administration of the Plan, as provided in Section 5 of this Plan.  For any period during which no such committee is in existence “Committee” shall mean the Board and all authority and responsibility assigned to the Committee under the Plan shall be exercised, if at all, by the Board.

 

2.9.          Company means Radius Health, Inc., a corporation organized under the laws of the State of Delaware.

 

2.10.        Effective Date means the earlier of the date the Plan is approved by the Board or the date the Plan is approved by the stockholders of the Company.

 

2.11.        Grant Date means the date as of which an Option is granted, as determined under Section 7.1(a).

 

2.12.        Incentive Option means an Option which by its terms is to be treated as an “incentive stock option” within the meaning of Section 422 of the Code.

 



 

2.13.        Market Value means the value of a share of Stock on a particular date determined by such methods or procedures as may be established by the Committee.  Unless otherwise determined by the Committee, the Market Value of Stock as of any date is the closing price for the Stock as reported on the NASDAQ Global Market (or on any other national securities exchange on which the Stock is then listed) for that date or, if no closing price is reported for that date, the closing price on the next preceding date for which a closing price was reported.

 

2.14.        Nonstatutory Option means any Option that is not an Incentive Option.

 

2.15.        Option means an option to purchase shares of Stock.

 

2.16.        Optionee means an eligible individual to whom an Option shall have been granted under the Plan.

 

2.17.        Participant means any holder of an outstanding Award under the Plan.

 

2.18.        Performance Criteria and Performance Goals have the meanings given such terms in Section 7.7(f).

 

2.19.        Performance Period means the one or more periods of time, which may be of varying and overlapping durations, selected by the Committee, over which the attainment of one or more Performance Goals or other business objectives will be measured for purposes of determining a Participant’s right to, and the payment of, a Performance Unit.

 

2.20.        Performance Award means a cash bonus award, stock bonus award, performance award or incentive award that is paid in cash, Stock or a combination of both, awarded under Section 7.6.

 

2.21.        Performance Unit means a right granted to a Participant under Section 7.5, to receive cash, Stock or other Awards, the payment of which is contingent on achieving Performance Goals or other business objectives established by the Committee.

 

2.22.        Plan means this 2011 Equity Incentive Plan of the Company, as amended from time to time, and including any attachments or addenda hereto.

 

2.23.        Prior Plan means Company’s 2003 Long Term Incentive Plan, as amended from time to time.

 

2.24.        Public Trading Date means the first date upon which Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.

 

2.25.        Qualified Performance-Based Awards means Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

2.26.        Restricted Stock means a grant or sale of shares of Stock to a Participant subject to a Risk of Forfeiture.

 

2.27.        Restricted Stock Units means rights to receive shares of Stock at the close of a Restriction Period, subject to a Risk of Forfeiture.

 



 

2.28.        Restriction Period means the period of time, established by the Committee in connection with an Award of Restricted Stock or Restricted Stock Units, during which the shares of Restricted Stock or Restricted Stock Units are subject to a Risk of Forfeiture described in the applicable Award Agreement.

 

2.29.        Risk of Forfeiture means a limitation on the right of the Participant to retain Restricted Stock or Restricted Stock Units, including a right of the Company to reacquire shares of Restricted Stock at less than its then Market Value, arising because of the occurrence or non-occurrence of specified events or conditions.

 

2.30.        Stock means common stock, par value $0.0001 per share, of the Company, and such other securities as may be substituted for Stock pursuant to Section 8.

 

2.31.        Stock Appreciation Right means a right to receive any excess in the Market Value of shares of Stock (except as otherwise provided in Section 7.2(c)) over a specified exercise price.

 

2.32.        Stock Grant means the grant of shares of Stock not subject to restrictions or other forfeiture conditions.

 

2.33.        Stockholders’ Agreement means any agreement by and among the holders of at least a majority of the outstanding voting securities of the Company and setting forth, among other provisions, restrictions upon the transfer of shares of Stock or on the exercise of rights appurtenant thereto (including but not limited to voting rights).

 

2.34.        Ten Percent Owner means a person who owns, or is deemed within the meaning of Section 422(b)(6) of the Code to own, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or any parent or subsidiary corporations of the Company, as defined in Sections 424(e) and (f), respectively, of the Code).  Whether a person is a Ten Percent Owner shall be determined with respect to an Option based on the facts existing immediately prior to the Grant Date of the Option.

 

3.             TERM OF THE PLAN

 

Unless the Plan shall have been earlier terminated by the Board, Awards may be granted under this Plan at any time in the period commencing on the date of approval of the Plan by the Board and ending immediately prior to the tenth anniversary of such approval.  Awards granted pursuant to the Plan within that period shall not expire solely by reason of the termination of the Plan.  Awards of Incentive Options may only be granted through the tenth anniversary of the earlier of the adoption of the Plan by the Board and the approval of the Plan by the Company’s stockholders, however, and any Awards granted prior to stockholder approval of the Plan are hereby expressly conditioned upon such approval.

 

4.             STOCK SUBJECT TO THE PLAN

 

At no time shall the number of shares of Stock issued pursuant to or subject to outstanding Awards granted under the Plan exceed the sum of (a) three million four hundred and five thousand and sixty-four (3,405,064) shares of Stock, and (b) any shares of Stock which as of the Effective Date are available for issuance under the Prior Plan, or are subject to awards under the Prior Plan which are forfeited or lapse unexercised and which following the Effective Date are not issued under the Prior Plan; subject, however, to the provisions of Section 8 of the Plan.  The maximum number of shares of Stock that may be

 



 

issued pursuant to or subject to outstanding Awards, including Incentive Options, is five million two thousand nine hundred and fifty-three (5,002,953) (subject to the provisions of Section 8 of the Plan). For purposes of applying the limitations set forth in this Section 4, settlement of any Award shall not count against the such limitations except to the extent settled in the form of Stock and, without limiting the generality of the foregoing:

 

(i) if any Option or Stock-settled Stock Appreciation Right expires, terminates, or is cancelled for any reason without having been exercised in full, or if any other Award is forfeited by the recipient or repurchased at less than its Market Value as a means of effecting a forfeiture, the shares of Stock not purchased by the Optionee or which are forfeited by the recipient or repurchased shall again be available for Awards to be granted under the Plan;

 

(ii) if any Option is exercised by delivering previously owned shares of Stock in payment of the exercise price therefor, only the net number of shares, that is, the number of shares of Stock issued minus the number received by the Company in payment of the exercise price, shall be considered to have been issued pursuant to an Award granted under the Plan; and

 

(iii) any shares of Stock either tendered or withheld in satisfaction of tax withholding obligations of the Company or an Affiliate shall again be available for issuance under the Plan.

 

Shares of Stock issued pursuant to the Plan may be either authorized but unissued shares or shares held by the Company in its treasury or shares purchased on the open market.

 

5.             ADMINISTRATION

 

The Plan shall be administered by the Committee; provided, however, that at any time and on any one or more occasions the Board may itself exercise any of the powers and responsibilities assigned the Committee under the Plan and when so acting shall have the benefit of all of the provisions of the Plan pertaining to the Committee’s exercise of its authorities hereunder; and provided further, however, that the Committee may delegate to an executive officer or officers the authority to grant Awards hereunder to employees who are not officers, and to consultants, in accordance with such guidelines as the Committee shall set forth at any time or from time to time. Subject to the provisions of the Plan, the Committee shall have complete authority, in its discretion, to make or to select the manner of making all determinations with respect to each Award to be granted by the Company under the Plan including the employee, consultant or director to receive the Award and the form of Award.  In making such determinations, the Committee may take into account the nature of the services rendered by the respective employees, consultants, and directors, their present and potential contributions to the success of the Company and its Affiliates, and such other factors as the Committee in its discretion shall deem relevant.  Subject to the provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the terms and provisions of the respective Award Agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan.  The Committee’s determinations made in good faith on matters referred to in the Plan shall be final, binding and conclusive on all persons having or claiming any interest under the Plan or an Award made pursuant hereto.

 

6.             AUTHORIZATION OF GRANTS

 

6.1.          Eligibility.  The Committee may grant from time to time and at any time prior to the termination of the Plan one or more Awards, either alone or in combination with any other Awards, to any

 



 

employee of or consultant to one or more of the Company and its Affiliates or to any non-employee member of the Board or of any board of directors (or similar governing authority) of any Affiliate. However, only employees of the Company, and of any parent or subsidiary corporations of the Company, as defined in Sections 424(e) and (f), respectively, of the Code, shall be eligible for the grant of an Incentive Option.

 

6.2.          Non-Employee Director Awards.  The Committee may grant Awards to non-employee members of the Board, subject to the limitations of the Plan, pursuant to a written non-discretionary formula established by the Committee, or any successor committee thereto carrying out its responsibilities on the date of grant of any such Award (the “Non-Employee Director Equity Compensation Policy”).  The Non-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to non-employee members of the Board, the number of shares of Stock to be subject to Non-Employee Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Committee (or such other successor committee as described above) shall determine in its discretion.

 

6.3.          General Terms of Awards.  Each grant of an Award shall be subject to all applicable terms and conditions of the Plan (including but not limited to any specific terms and conditions applicable to that type of Award set out in the following Section), and such other terms and conditions, not inconsistent with the terms of the Plan, as the Committee may prescribe.  No prospective Participant shall have any rights with respect to an Award, unless and until such Participant shall have complied with the applicable terms and conditions of such Award (including if applicable delivering a fully executed copy of any agreement evidencing an Award to the Company).

 

6.4.          Effect of Termination of Employment, Etc. Unless the Committee shall provide otherwise with respect to any Award, if the Participant’s employment or other association with the Company and its Affiliates ends for any reason, including because of an Affiliate ceasing to be an Affiliate, (a) any outstanding Option or Stock Appreciation Right of the Participant shall cease to be exercisable in any respect not later than three months following that event and, for the period it remains exercisable following that event, shall be exercisable only to the extent exercisable at the date of that event, and (b) any other outstanding Award of the Participant shall be forfeited or otherwise subject to return to or repurchase by the Company on the terms specified in the applicable Award Agreement.  Cessation of the performance of services in one capacity, for example, as an employee, shall not result in termination of an Award while the Participant continues to perform services in another capacity, for example as a director. Military or sick leave or other bona fide leave shall not be deemed a termination of employment or other association, provided that it does not exceed the longer of three months or the period during which the absent Participant’s reemployment rights, if any, are guaranteed by statute or by contract. To the extent consistent with applicable law, the Committee may provide that Awards continue to vest for some or all of the period of any such leave, or that their vesting shall be tolled during any such leave and only recommence upon the Participant’s return from leave, if ever.

 

6.5.          Non-Transferability of Awards.  Except as otherwise provided in this Section 6.5, Awards shall not be transferable, and no Award or interest therein may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  All of a Participant’s rights in any Award may be exercised during the life of the Participant only by the Participant or the Participant’s legal representative.  However, the Committee may, at or after the grant of an Award of a Nonstatutory Option, or shares of Restricted Stock, provide that such Award may be transferred by the recipient to a family member; provided, however, that any such transfer is without payment of any consideration whatsoever and that no transfer shall be valid unless first approved by the Committee, acting in its sole discretion.  For this purpose, “family member” means any child, stepchild, grandchild, parent, grandparent, stepparent, 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, including adoptive relationships, any person sharing the employee’s household (other than a tenant or employee), a trust in which the foregoing persons have more than fifty (50) percent of the beneficial interests, a foundation in which the foregoing persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty (50) percent of the voting interests.

 

6.6.          Additional Limits.  In no event shall the number of shares of Stock covered by Options or other Awards granted to any one person in any one calendar year exceed 1,250,000 shares of Stock (subject to adjustment pursuant to Section 8 of the Plan, except that any such adjustment shall not apply for the purpose of Awards to covered employees within the meaning of Section 162(m) of the Code intended to be or otherwise qualifying as Qualified Performance-Based Awards), and the maximum aggregate amount of cash that may be paid in cash during any calendar year with respect to one or more Awards payable in cash shall be $2,000,000; provided, however, that the foregoing limitations shall not apply prior to the Public Trading Date and, following the Public Trading Date, the foregoing limitations shall not apply until the earliest of: (a) the first material modification of the Plan (including any increase in the number of shares reserved for issuance under the Plan under Section 4); (b) the issuance of all of the shares of Stock reserved for issuance under the Plan; (c) the expiration of the Plan; (d) the first meeting of stockholders at which members of the Board are to be elected that occurs after the close of the third calendar year following the calendar year in which the Public Trading Date occurred; or (e) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder. To the extent required by Section 162(m) of the Code, shares of Stock subject to Awards which are canceled shall continue to be counted against the limits set forth herein.

 

7.             SPECIFIC TERMS OF AWARDS

 

7.1.          Options.

 

(a)           Date of Grant.  The granting of an Option shall take place at the time specified in the Award Agreement.  Only if expressly so provided in the applicable Award Agreement shall the Grant Date be the date on which the Award Agreement shall have been duly executed and delivered by the Company and the Optionee.

 

(b)           Exercise Price.  The price at which shares of Stock may be acquired under each Incentive Option shall be not less than 100% of the Market Value of Stock on the Grant Date, or not less than 110% of the Market Value of Stock on the Grant Date if the Optionee is a Ten Percent Owner.  The price at which shares of Stock may be acquired under each Nonstatutory Option shall not be so limited solely by reason of this Section.

 

(c)           Option Period.  No Incentive Option may be exercised on or after the tenth anniversary of the Grant Date, or on or after the fifth anniversary of the Grant Date if the Optionee is a Ten Percent Owner.  The Option period under each Nonstatutory Option shall not be so limited solely by reason of this Section.

 

(d)           Exercisability.  An Option may be immediately exercisable or become exercisable in such installments, cumulative or non-cumulative, as the Committee may determine.  In the case of an Option not otherwise immediately exercisable in full, the Committee may Accelerate such Option in whole or in part at any time; provided, however, that in the case of an Incentive Option, any such Acceleration of the Option would not cause the Option to fail to comply with the provisions of Section 422 of the Code or the Optionee consents to the Acceleration.

 


 


 

(e)           Method of Exercise.  An Option may be exercised by the Optionee giving written notice, in the manner provided in Section 17, specifying the number of shares of Stock with respect to which the Option is then being exercised.  The notice shall be accompanied by payment in the form of cash or check payable to the order of the Company in an amount equal to the exercise price of the shares of Stock to be purchased or, subject in each instance to the Committee’s approval, acting in its sole discretion, and to such conditions, if any, as the Committee may deem necessary to avoid adverse accounting effects to the Company,

 

(i) by delivery to the Company of shares of Stock having a Market Value equal to the exercise price of the shares to be purchased, or

 

(ii) by surrender of the Option as to all or part of the shares of Stock for which the Option is then exercisable in exchange for shares of Stock having an aggregate Market Value equal to the difference between (1) the aggregate Market Value of the surrendered portion of the Option, and (2) the aggregate exercise price under the Option for the surrendered portion of the Option, or

 

(iii) such other legal consideration deemed acceptable by the Committee.

 

If the Stock is traded on an established market, payment of any exercise price may also be made through and under the terms and conditions of any formal cashless exercise program authorized by the Company entailing the sale of the Stock subject to an Option in a brokered transaction (other than to the Company), such that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such sale.  Receipt by the Company of such notice and payment in any authorized or combination of authorized means shall constitute the exercise of the Option.  Within thirty (30) days thereafter but subject to the remaining provisions of the Plan, the Company shall deliver or cause to be delivered to the Optionee or his agent a certificate or certificates for, or shall record using the book entry procedures of the Company, the number of shares then being purchased.  Such shares of Stock shall be fully paid and nonassessable.

 

(f)            Limit on Incentive Option Characterization.  An Incentive Option shall be considered to be an Incentive Option only to the extent that the number of shares of Stock for which the Option first becomes exercisable in a calendar year do not have an aggregate Market Value (as of the date of the grant of the Option) in excess of the “current limit”.  The current limit for any Optionee for any calendar year shall be $100,000 minus the aggregate Market Value at the date of grant of the number of shares of Stock available for purchase for the first time in the same year under each other Incentive Option previously granted to the Optionee under the Plan, and under each other incentive stock option previously granted to the Optionee under any other incentive stock option plan of the Company and its Affiliates.  Any shares of Stock which would cause the foregoing limit to be violated shall be deemed to have been granted under a separate Nonstatutory Option, otherwise identical in its terms to those of the Incentive Option.

 

(g)           Notification of Disposition.  Each person exercising any Incentive Option granted under the Plan shall be deemed to have covenanted with the Company to report to the Company any disposition of the shares of Stock issued upon such exercise prior to the expiration of the holding periods specified by Section 422(a)(1) of the Code and, if and to the extent that the realization of income in such a disposition imposes upon the Company federal, state, local or other withholding tax requirements, or any such withholding is required to secure for the Company an otherwise available tax deduction, to remit to the Company an amount in cash sufficient to satisfy those requirements.

 



 

7.2.          Stock Appreciation Rights.

 

(a)           Tandem or Stand-Alone.  Stock Appreciation Rights may be granted in tandem with an Option (at or, in the case of a Nonstatutory Option, after, the award of the Option), or alone and unrelated to an Option.  Stock Appreciation Rights in tandem with an Option shall terminate to the extent that the related Option is exercised, and the related Option shall terminate to the extent that the tandem Stock Appreciation Rights are exercised.

 

(b)           Exercise Price.  Stock Appreciation Rights shall have an exercise price of not less than one hundred percent (100%) of the Market Value of the Stock on the date of award, or in the case of Stock Appreciation Rights in tandem with Options, the exercise price of the related Option.

 

(c)           Other Terms.  Except as the Committee may deem inappropriate or inapplicable in the circumstances, Stock Appreciation Rights shall be subject to terms and conditions substantially similar to those applicable to a Nonstatutory Option.  In addition, a Stock Appreciation Right related to an Option which can only be exercised during limited periods following a Change of Control may entitle the Participant to receive an amount based upon the highest price paid or offered for Stock in any transaction relating to the Change of Control or paid during the thirty (30) day period immediately preceding the occurrence of the Change of Control in any transaction reported in the stock market in which the Stock is normally traded.

 

7.3.          Restricted Stock.

 

(a)           Purchase Price.  Shares of Restricted Stock shall be issued under the Plan for such consideration, in cash, other property or services, or any combination thereof, as is determined by the Committee.

 

(b)           Issuance of Certificates; Book Entry Shares.  Each Participant receiving a Restricted Stock Award, subject to subsection (c) below, shall be issued a stock certificate in respect of such shares of Restricted Stock or the Company shall make a book entry.  Such certificate or book entry shall be registered in the name of such Participant, and, if applicable, shall bear or refer to an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award substantially in the following form:

 

The shares evidenced hereby are subject to the terms and conditions of the Radius Health, Inc. 2011 Equity Incentive Plan and an Award Agreement entered into by the registered owner and Radius Health, Inc., copies of which will be furnished by the Company to the holder of the shares evidenced hereby upon written request and without charge.

 

(c)           Escrow of Shares.  The Committee may require that any stock certificates evidencing shares of Restricted Stock be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Participant deliver a stock power, endorsed in blank, relating to the Stock covered by such Award.

 

(d)           Restrictions and Restriction Period.  During the Restriction Period applicable to shares of Restricted Stock, such shares shall be subject to limitations on transferability and a Risk of Forfeiture arising on the basis of such conditions related to the performance of services, Company or Affiliate performance or otherwise as the Committee may determine and provide for in the applicable Award Agreement.  Any such Risk of Forfeiture may be waived or terminated, or the Restriction Period shortened, at any time by the Committee on such basis as it deems appropriate.

 



 

(e)           Rights Pending Lapse of Risk of Forfeiture or Forfeiture of Award.  Except as otherwise provided in the Plan or the applicable Award Agreement, at all times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture of, an Award of Restricted Stock, the Participant shall have all of the rights of a stockholder of the Company, including the right to vote, and the right to receive any dividends with respect to, the shares of Restricted Stock (but any dividends or other distributions payable in shares of Stock or other securities of the Company shall constitute additional Restricted Stock, subject to the same Risk of Forfeiture as the shares of Restricted Stock in respect of which such shares of Stock or other securities are paid).  The Committee, as determined at the time of Award, may permit or require the payment of cash dividends to be deferred and, if the Committee so determines, reinvested in additional Restricted Stock to the extent shares of Stock are available under Section 4.

 

(f)            Lapse of Restrictions.  If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the book entry evidencing the shares of Stock for which the Restricted Period has lapsed promptly shall reflect such expiration.  In the event share certificates are issued to evidence Restricted Stock, then upon the request of a Participant no more than once per year, the certificates evidencing such shares shall be delivered to the Participant.

 

7.4.          Restricted Stock Units.

 

(a)           Character.  Each Restricted Stock Unit shall entitle the recipient to one or more shares of Stock at a close of such Restriction Period as the Committee may establish and subject to a Risk of Forfeiture arising on the basis of such conditions relating to the performance of services, Company or Affiliate performance or otherwise as the Committee may determine and provide for in the applicable Award Agreement.  Any such Risk of Forfeiture may be waived or terminated, or the Restriction Period shortened, at any time by the Committee on such basis as it deems appropriate.

 

(b)           Form and Timing of Payment.  Payment of earned Restricted Stock Units shall be made in a single lump sum following the close of the applicable Restriction Period.  At the discretion of the Committee, Participants may be entitled to receive payments equivalent to any dividends declared with respect to Stock referenced in grants of Restricted Stock Units but only following the close of the applicable Restriction Period and then only if the underlying Stock shall have been earned.  Unless the Committee shall provide otherwise, any such dividend equivalents shall be paid, if at all, without interest or other earnings.

 

7.5.          Performance Units.

 

(a)           Character. Each Performance Unit shall entitle the recipient to the value of a specified number of shares of Stock, over the initial value for such number of shares, if any, established by the Committee at the time of grant, at the close of a specified Performance Period to the extent specified business objectives, including but not limited to Performance Goals, shall have been achieved.

 

(b)           Earning of Performance Units. The Committee shall set Performance Goals or other business objectives in its discretion which, depending on the extent to which they are met within the applicable Performance Period, will determine the number and value of Performance Units that will be paid out to the Participant.  After the applicable Performance Period has ended, the holder of Performance Units shall be entitled to receive payout on the number and value of Performance Units earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals or other business objectives have been achieved.

 

(c)           Form and Timing of Payment.  Payment of earned Performance Units shall be made in a single lump sum following the close of the applicable Performance Period.  At the discretion of

 



 

the Committee, Participants may be entitled to receive any dividends declared with respect to Stock which have been earned in connection with grants of Performance Units which have been earned, but not yet distributed to Participants.  The Committee may permit or, if it so provides at grant require, a Participant to defer such Participant’s receipt of the payment of cash or the delivery of Stock that would otherwise be due to such Participant by virtue of the satisfaction of any requirements or goals with respect to Performance Units.  If any such deferral election is required or permitted, the Committee shall establish rules and procedures for such payment deferrals.

 

7.6.          Performance Awards.  The Administrator is authorized to grant Performance Awards to any Participant and to determine whether such Performance Awards shall be a Qualified Performance-Based Award.  The value of Performance Awards may be linked to any one or more of the Performance Goals or other specific criteria determined by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee.  In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of the specific type of Award) the contributions, responsibilities and other compensation of the particular Participant.  Performance Awards may be paid in cash, shares of Stock, or both, as determined by the Committee.  Without limiting the foregoing, the Committee may grant Performance Awards to any Participant in the form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or not objective, which are established by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee.  Any such bonuses paid to a Participant which are intended to be Qualified Performance-Based Awards shall be based upon objectively determinable bonus formulas established in accordance with the provisions of Section 7.8.

 

7.7.          Stock Grants. Stock Grants shall be awarded solely in recognition of significant prior or expected contributions to the success of the Company or its Affiliates, as an inducement to employment, in lieu of compensation otherwise already due and in such other limited circumstances as the Committee deems appropriate.  Stock Grants shall be made without forfeiture conditions of any kind.

 

7.8.          Qualified Performance-Based Awards.

 

(a)           Purpose.  The purpose of this Section 7.8 is to provide the Committee the ability to qualify Awards as “performance-based compensation” under Section 162(m) of the Code.  If the Committee, in its discretion, decides to grant an Award as a Qualified Performance-Based Award, the provisions of this Section 7.8 will control over any contrary provision contained in the Plan.  In the course of granting any Award, the Committee may specifically designate the Award as intended to qualify as a Qualified Performance-Based Award.  However, no Award shall be considered to have failed to qualify as a Qualified Performance-Based Award solely because the Award is not expressly designated as a Qualified Performance-Based Award, if the Award otherwise satisfies the provisions of this Section 7.8 and the requirements of Section 162(m) of the Code applicable to “performance-based compensation.”

 

(b)           Authority.  All grants of Awards intended to qualify as Qualified Performance-Based Awards and the determination of the terms applicable thereto shall be made by the Committee.  If not all of the members thereof qualify as “outside directors” within the meaning of Section 162(m) of the Code, however, all grants of Awards intended to qualify as Qualified Performance-Based Awards and the determination of the terms applicable thereto shall be made by a subcommittee of the Committee consisting of such of the members of the Committee as do so qualify.  Any reference in this Section 7.8 to the Committee shall mean any such subcommittee if required under the preceding sentence, and any action by such a subcommittee shall be considered the action of the Committee for purposes of the Plan.

 

(c)           Discretion of Committee with Respect to Qualified Performance-Based Awards.  Any form of Award permitted under the Plan, other than a Stock Grant, may be granted as a Qualified

 



 

Performance-Based Award.  Options may be granted as Qualified Performance-Based Awards in accordance with Section 7.1 (except that the exercise price of any Option intended to qualify as a Qualified Performance-Based Award shall in no event be less that the Market Value of the Stock on the date of grant), and may become exercisable based on continued service, on satisfaction of Performance Goals, or on a combination thereof.  Each other Award intended to qualify as a Qualified Performance-Based Award, such as Restricted Stock, Restricted Stock Units, or Performance Units, shall be subject to satisfaction of one or more Performance Goals except as otherwise provided in this Section 7.8.  The Committee will have full discretion to select the length of any applicable Restriction Period or Performance Period, the kind and/or level of the applicable Performance Goal, and whether the Performance Goal is to apply to the Company, a subsidiary of the Company or any division or business unit or to the individual.  Any Performance Goal or Goals applicable to Qualified Performance-Based Awards shall be objective, shall be established not later than ninety (90) days after the beginning of any applicable Performance Period (or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code) and shall otherwise meet the requirements of Section 162(m) of the Code, including the requirement that the outcome of the Performance Goal or Goals be substantially uncertain (as defined for purposes of Section 162(m) of the Code) at the time established.

 

(d)           Payment of Qualified Performance-Based Awards.  A Participant will be eligible to receive payment under a Qualified Performance-Based Award which is subject to achievement of a Performance Goal or Goals only if the applicable Performance Goal or Goals are achieved within the applicable Performance Period, as determined by the Committee, provided, that a Qualified Performance-Based Award may be deemed earned as a result of death, becoming disabled, or in connection with a Change of Control if otherwise provided in the Plan or the applicable Award Agreement even if the Award would not constitute “performance-based compensation” under Section 162(m) of the Code following the occurrence of such an event.  In determining the actual size of an individual Qualified Performance-Based Award, the Committee may reduce or eliminate the amount of the Qualified Performance-Based Award earned for the Performance Period, if in its sole and absolute discretion, such reduction or elimination is appropriate.

 

(e)           Limitation on Adjustments for Certain Events.  No adjustment of any Qualified Performance-Based Award pursuant to Section 8 shall be made except on such basis, if any, as will not cause such Award to provide other than “performance-based compensation” within the meaning of Section 162(m) of the Code.

 

(f)            Definitions.  For purposes of the Plan

 

(i)            Performance Criteria means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period.  The Performance Criteria used to establish Performance Goals are limited to:  (i) cash flow (before or after dividends), (ii) earnings per share (including, without limitation, earnings before interest, taxes, depreciation and amortization), (iii) stock price, (iv) return on equity, (v) stockholder return or total stockholder return, (vi) return on capital (including, without limitation, return on total capital or return on invested capital), (vii) return on investment, (viii) return on assets or net assets, (ix) market capitalization, (x) economic value added, (xi) debt leverage (debt to capital), (xii) revenue, (xiii) sales or net sales, (xiv) backlog, (xv) income, pre-tax income or net income, (xvi) operating income or pre-tax profit, (xvii) operating profit, net operating profit or economic profit, (xviii) gross margin, operating margin or profit margin, (xix) return on operating revenue or return on operating assets, (xx) cash from

 



 

operations, (xxi) operating ratio, (xxii) operating revenue, (xxiii) market share improvement, (xxiv) general and administrative expenses and (xxv) customer service.

 

(ii)           Performance Goals means, for a Performance Period, the written goal or goals established by the Committee for the Performance Period based upon one or more of the Performance Criteria.  The Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, subsidiary, or an individual, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Affiliate, either individually, alternatively or in any combination, and measured either quarterly, annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee. The Committee will objectively define the manner of calculating the Performance Goal or Goals it selects to use for such Performance Period for such Participant, including whether or to what extent there shall not be taken into account any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation, claims, judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs and (v) any extraordinary, unusual, non-recurring or non-comparable items (A) as described in Accounting Standard Codification Section 225-20, (B) as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s Annual Report to stockholders for the applicable year, or (C) publicly announced by the Company in a press release or conference call relating to the Company’s results of operations or financial condition for a completed quarterly or annual fiscal period.

 

7.9.          Awards to Participants Outside the United States.  The Committee may modify the terms of any Award under the Plan granted to a Participant who is, at the time of grant or during the term of the Award, resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that the Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad, shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States.  The Committee may establish supplements to, or amendments, restatements, or alternative versions of the Plan for the purpose of granting and administrating any such modified Award.  No such modification, supplement, amendment, restatement or alternative version may increase the share limit of Section 4.

 

8.             ADJUSTMENT PROVISIONS

 

8.1.          Adjustment for Corporate Actions. All of the share numbers set forth in the Plan reflect the capital structure of the Company as of the Effective Date.  If subsequent to that date the outstanding shares of Stock (or any other securities covered by the Plan by reason of the prior application of this Section) are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to shares of Stock, as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar distribution with respect to such shares of Stock, an appropriate and proportionate adjustment will be made in (i) the maximum numbers and kinds of shares provided in Section 4, (ii) the numbers and kinds of shares or other securities subject to the then outstanding Awards,

 



 

(iii) the exercise price for each share or other unit of any other securities subject to then outstanding Options and Stock Appreciation Rights (without change in the aggregate purchase price as to which such Options or Rights remain exercisable), and (iv) the repurchase price of each share of Restricted Stock then subject to a Risk of Forfeiture in the form of a Company repurchase right.

 

8.2.          Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. In the event of any corporate action not specifically covered by the preceding Section, including but not limited to an extraordinary cash distribution on Stock, a corporate separation or other reorganization or liquidation, the Committee may make such adjustment of outstanding Awards and their terms, if any, as it, in its sole discretion, may deem equitable and appropriate in the circumstances.  The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in this Section) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

 

8.3.          Related Matters.  Any adjustment in Awards made pursuant to Section 8.1 or 8.2  shall be determined and made, if at all, by the Committee, acting in its sole discretion, and shall include any correlative modification of terms, including of Option exercise prices, rates of vesting or exercisability, Risks of Forfeiture, applicable repurchase prices for Restricted Stock, and Performance Goals and other business objectives which the Committee may deem necessary or appropriate so as to ensure the rights of the Participants in their respective Awards are not substantially diminished nor enlarged as a result of the adjustment and corporate action other than as expressly contemplated in this Section 8.  The Committee, in its discretion, may determine that no fraction of a share of Stock shall be purchasable or deliverable upon exercise, and in that event if any adjustment hereunder of the number of shares of Stock covered by an Award would cause such number to include a fraction of a share of Stock, such number of shares of Stock shall be adjusted to the nearest smaller whole number of shares.  No adjustment of an Option exercise price per share pursuant to Sections 8.1 or 8.2 shall result in an exercise price which is less than the par value of the Stock.

 

8.4.          Transactions.

 

(a)           Definition of Transaction. In this Section 8.4, “Transaction” means (1) any merger or consolidation of the Company with or into another entity as a result of which the Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (2) any sale or exchange of all of the Stock of the Company for cash, securities or other property, (3) any sale, transfer, or other disposition of all or substantially all of the Company’s assets to one or more other persons in a single transaction or series of related transactions or (4) any liquidation or dissolution of the Company.

 

(b)           Treatment of Options and Share Appreciation Rights. In a Transaction, the Committee may take any one or more of the following actions as to all or any (or any portion of) outstanding Options and Share Appreciation Rights (“Rights”).

 

(1)           Provide that such Rights shall be assumed, or substantially equivalent rights shall be provided in substitution therefore, by the acquiring or succeeding entity (or an affiliate thereof).

 

(2)           Upon written notice to the holders, provide that the holders’ unexercised Rights will terminate immediately prior to the consummation of such

 



 

Transaction unless, in the case of vested Rights, such Rights are exercised within a specified period following the date of such notice.

 

(3)           Provide that outstanding Rights shall become exercisable in whole or in part prior to or upon the Transaction.

 

(4)           Provide for cash payments, net of applicable tax withholdings, to be made to holders equal to the excess, if any, of (A) the acquisition price times the number of shares of Stock subject to an Option (to the extent the exercise price does not exceed the acquisition price) over (B) the aggregate exercise price for all such shares of Stock subject to the Option, in exchange for the termination of such Option; provided, that if the acquisition price does not exceed the exercise price of any such Option, the Committee may cancel that Option without the payment of any consideration therefore prior to or upon the Transaction.  For this purpose, “acquisition price” means the amount of cash, and market value of any other consideration, received in payment for a share of Stock surrendered in a Transaction but need not take into account any deferred consideration unless and until received.

 

(5)           Provide that, in connection with a liquidation or dissolution of the Company, Rights shall convert into the right to receive liquidation proceeds net of the exercise price thereof and any applicable tax withholdings.

 

(6)           Any combination of the foregoing.

 

For purposes of paragraph (1) above, a Right shall be considered assumed, or a substantially equivalent right shall be considered to have been provided in substitution therefore, if following consummation of the Transaction the Right confers the right to purchase or receive the value of, for each share of Stock subject to the Right immediately prior to the consummation of the Transaction, the consideration (whether cash, securities or other property) received as a result of the Transaction by holders of Stock for each share of Stock held immediately prior to the consummation of the Transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Stock); provided, however, that if the consideration received as a result of the Transaction is not solely common stock (or its equivalent) of the acquiring or succeeding entity (or an affiliate thereof), the Committee may provide for the consideration to be received upon the exercise of the Right to consist of or be based on solely common stock (or its equivalent) of the acquiring or succeeding entity (or an affiliate thereof) equivalent in value to the per share consideration received by holders of outstanding shares of Stock as a result of the Transaction.

 

(c)           Treatment of Other Awards. As to outstanding Awards other than Options or Share Appreciation Rights, upon the occurrence of a Transaction other than a liquidation or dissolution of the Company which is not part of another form of Transaction, the repurchase and other rights of the Company under each such Award shall inure to the benefit of the Company’s successor and shall, unless the Committee determines otherwise, apply to the cash, securities or other property which the Stock was converted into or exchanged for pursuant to such Transaction in the same manner and to the same extent as they applied to the Award. Upon the occurrence of a Transaction involving a liquidation or dissolution of the Company which is not part of another form of Transaction, except to the extent specifically provided to the contrary in the instrument evidencing any Award or any other agreement between a Participant and the Company, all Risks of Forfeiture and Performance Goals or other business objectives, where otherwise applicable to any such Awards, shall automatically be deemed terminated or satisfied, as applicable.

 



 

(d)           Related Matters. In taking any of the actions permitted under this Section 8.4, the Committee shall not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically. Any determinations required to carry out the foregoing provisions of this Section 8.4, including but not limited to the market value of other consideration received by holders of Stock in a Transaction and whether substantially equivalent Rights have been substituted, shall be made by the Committee acting in its sole discretion.  In connection with any action or actions taken by the Committee in respect of Awards and in connection with a Transaction, the Committee may require such acknowledgements of satisfaction and releases from Participants as it may determine.

 

9.