Class II Directors Continuing in
Office Until the 2009 Annual Meeting of Stockholders
John K. A. Prendergast,
Ph.D.
John K. A.
Prendergast, Ph.D., 55, has served as a director of Avigen since December 1992.
Since September 2004, Dr. Prendergast has served as our Lead Independent
Director. Since 1993, he has served as President of SummerCloud Bay Inc., a
consulting firm providing services to the biotechnology industry. Dr.
Prendergast is currently chairman of the board of directors of Palatin
Technologies, Inc. and AVAX Technologies, Inc., both of which are
biopharmaceutical companies. Dr. Prendergast also serves as a director of
MediciNova, Inc., a biopharmaceutical company, and is currently serving as the
executive chairman of the board of directors of Antyra, Inc., a privately held
biopharmaceutical company. Dr. Prendergast received M.Sc. and Ph.D. degrees from
the University of New South Wales, Sydney, Australia and a C.S.S. in
Administration and Management from Harvard University.
Richard J. Wallace, B.Com.(Hons)
Richard J.
Wallace, 57, has served as a director of Avigen since March 2006. From 2004 to
January 2008, Mr. Wallace served as Senior Vice President of Global Commercial
Strategy at GlaxoSmithKline (GSK) and a member of GSKs Research and Development
Executive, Commercial Operations Committee and Product Management Board. Since
joining GSK in 1992, Mr. Wallace performed a number of roles including Vice
President Commercial (Canadian Pharmaceuticals), Vice President US Business
Development, and Vice President Sales & Marketing (US Oncology and HIV). Mr.
Wallaces experience prior to joining GSK included eight years with Bristol
Myers Squibb and seven years at Johnson & Johnson (in assignments spanning
marketing, sales, manufacturing and general management). Mr. Wallace currently
serves on the board of directors of ImmunoGen Inc., Clinical Data Inc., and
Bridgehead International Ltd. Mr. Wallace received B.Commerce and B.Com. Honors
degrees from Rhodes University, South Africa.
Class III Directors Continuing in
Office Until the 2010 Annual Meeting of Stockholders
Kenneth G. Chahine, J.D.,
Ph.D.
Kenneth G.
Chahine, J.D., Ph.D., 43, was appointed President, Chief Executive Officer and
director of Avigen in March 2004. Dr. Chahine had previously served as Avigens
Chief Operating Officer since July 2002 and as Vice President, Business
Development and Intellectual Property since 1998. Prior to joining Avigen, Dr.
Chahine worked at the patent law firm of Madson & Metcalf, P.C. in Salt Lake
City, Utah from 1994 to 1998. From 1992 to 1993, he worked as a research
scientist at Parke-Davis Pharmaceuticals, a pharmaceutical company, and held
another research scientist post at the University of Utah Department of Human
Genetics from 1994 to 1996. Dr. Chahine served as western regional news and
legal correspondent for Nature Biotechnology from 1996 to 2002. Dr. Chahine
serves on the board of directors of the Lassonde New Venture Development Center
at the University of Utah School of Business and is an Adjunct Professor at the
University of Utah College of Law. Dr. Chahine holds a J.D. from the University
of Utah and a Ph.D. in biochemistry and molecular biology from the University of
Michigan.
Stephen Dilly, M.B.B.S., Ph.D.
Stephen
Dilly, M.B.B.S., Ph.D., 49, was appointed a director of Avigen in February 2007.
Dr. Dilly is currently Chief Executive Officer of APT Pharmaceuticals, Inc. From
October 2003 to April 2006 he was Senior Vice President, Chief Medical Officer
and Worldwide Head of Development of Chiron BioPharmaceuticals. From September
1998 to September 2003 he held positions as Vice President of Development
Sciences and Vice President of Medical Affairs at Genentech, Inc. Dr. Dilly
graduated as a physician from the University of London in 1982 and received his
Ph.D. in Cardiac Physiology from University of London in 1988. He began his
industry career with Pfizer Central Research in the United Kingdom in 1986 and
since then has held positions of increasing responsibility with Beecham,
SmithKline Beecham, Genentech, Inc. and Chiron.
13
Jan K. Öhrström, M.D.
Jan K.
Öhrström, M.D., 51, was appointed a director of Avigen in February 2007. Dr.
Öhrström is currently Chief Operating Officer and President of ProFibrix, Inc.,
a biotech company that develops protein drugs within hemostasis and regenerative
medicine. From 2007 to 2008, he was Executive Vice President of MediQuest
Therapeutics, Inc., a specialty pharmaceutical company. From 2000 to July 2007,
Dr. Öhrström held various positions at ZymoGenetics, Inc., a biotech company,
including Senior Vice President, Business Development from 2006 to 2007 and
prior to that, Senior Vice President of Development and Chief Medical Officer.
From 1990 to 1999, Dr. Öhrström held various positions at Novo Nordisk A/S,
based in Denmark, including Director, Worldwide Development Portfolio, Director,
Strategic Marketing, and Project Director and at Novo Nordisk Pharmaceuticals,
Inc., based in Princeton, New Jersey, the position of Medical Director. Dr.
Öhrström received an M.D. from the University of Copenhagen.
The complete
mailing address of each of Avigens directors is c/o Avigen, Inc., 1301 Harbor
Bay Parkway, Alameda, California 94502.
Each
director holds office until the end of his or her term in office or until his or
her successor has been elected and qualified or until his earlier death,
resignation or removal from office. Officers are appointed by and serve at the
discretion of the Board.
RELATED-PERSON TRANSACTIONS POLICY
AND PROCEDURES
Our Audit
Committee has authority to review and approve all related-person transactions as
set forth in the Audit Committee Charter. Avigen has a simple organizational
structure in which potential transactions with related person are generally
easily recognizable by the members of our Board of Directors and management in
the ordinary course of business. In addition, each member of our Board of
Directors and management is aware that all related-person transactions must be
approved by our Audit Committee. As such, we rely on each member of our Board of
Directors and management to report any potential related-person transactions to
our General Counsel, who then would bring the potential related-person
transaction to the Audit Committee for approval. In addition, we submit and
require our directors and officers to complete Director and Officer
Questionnaires identifying any transactions with us in which the executive
officer or director or their family members have an interest. We review
related-person transactions due to the potential for a conflict of interest. A
conflict of interest occurs when an individuals private interest interferes, or
appears to interfere, with our interests. In addition, our Corporate Governance
and Nominating Committee determines, on an annual basis, which members of our
Board of Directors are independent (as independence is currently defined in Rule
4200(a)(15) of the Nasdaq listing standards). Our Corporate Governance and
Nominating Committee reviews and discusses any relationships with directors that
would potentially interfere with his or her exercise of independent judgment in
carrying out the responsibilities of a director. In cases where the Corporate
Governance and Nominating Committee determines it is likely a particular board
member or board members will have a conflict of interest concerning an aspect of
our business, it may recommend the establishment of a Special Committee of the
Board of Directors comprised solely of non-conflicted Directors to act with
respect to such business. Such a Special Committee was formed with respect to
our AV411 program. Currently, the Board of Directors has determined that one of
the members of our Board of Directors has a conflict of interest. Finally, our
Code of Business Conduct and Ethics establishes the standards of behavior for
all employees, officers, and directors.
INFORMATION REGARDING THE BOARD OF
DIRECTORS AND CORPORATE GOVERNANCE
INDEPENDENCE OF THE BOARD OF DIRECTORS
As required
under the Nasdaq Global Market (Nasdaq) listing standards, a majority of the
members of a listed companys board of directors must qualify as independent,
as affirmatively determined by the board of directors. Avigens Board of
Directors consults with Avigens counsel to ensure that the Board of Directors
determinations are consistent with relevant securities and other laws and
regulations regarding the definition of independent, including those set forth
in pertinent listing standards of the Nasdaq, as in effect from time to
time.
Consistent
with these considerations, after review of all relevant transactions or
relationships between each director, or any of his family members, and Avigen,
its senior management and its independent registered public accounting firm, the
Board of Directors has affirmatively determined that all of Avigens directors
are independent directors within the meaning of the applicable Nasdaq listing
standards, except for Dr. Chahine, Avigens President and Chief Executive
Officer. In making this determination, the Board of Directors found that none of
the directors or nominees for director, other than Dr. Chahine, have a material
or other disqualifying relationship with Avigen.
14
MEETINGS OF THE BOARD OF DIRECTORS
The Board of
Directors met ten times during the last fiscal year. All directors except Dr.
Iwaki attended 75% or more of the aggregate of the meetings of the Board of
Directors and of the committees on which he served, held during the period for
which he was a director or committee member.
Avigens
independent directors met five times in executive sessions at which only
independent directors were present. The Chairman of the Board of Directors, or
in his absence, the Lead Independent Director, presided over the executive
sessions.
INFORMATION REGARDING COMMITTEES OF THE
BOARD OF DIRECTORS
The Board of
Directors has three committees: an Audit Committee, a Compensation Committee and
a Corporate Governance and Nominating Committee. The following table provides
membership information for fiscal year 2008 for each of the Board committees
since January 1, 2008:
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
Governance
|
|
|
|
|
Compensation
|
|
and
|
Name
|
|
Audit
|
|
(1)(2)
|
|
Nominating
|
Zola Horovitz, Ph.D. Chairman
|
|
X
|
|
|
|
X
|
John
Prendergast, Ph.D. Lead Independent Director
|
|
X*
|
|
X*
|
|
X*
|
Richard Wallace, B.Com. (Hons)
|
|
|
|
X
|
|
X
|
Jan Öhrström,
M.D
|
|
X
|
|
|
|
X
|
Stephen Dilly, M.B.B.S., Ph.D
|
|
|
|
X
|
|
X
|
____________________
* Committee Chairperson
(1) Effective May 19, 2008, Dr. Yuichi Iwaki, a former member of the
Board of Directors, ceased to be a member of the Compensation
Committee.
(2) Effective February 6, 2009, Dr. Dilly
joined the Compensation Committee.
For fiscal
year 2008, the Audit Committee met eight times, the Compensation Committee met
six times and the Corporate Governance and Nominating Committee met five
times.
Below is a
description of each committee of the Board of Directors. Each of the committees
has authority to engage legal counsel or other experts or consultants, as it
deems appropriate to carry out its responsibilities. The Board of Directors has
determined that each member of each committee meets the applicable Nasdaq rules
and regulations regarding independence and that each member is free of any
relationship that would impair his or her individual exercise of independent
judgment with regard to Avigen.
15
Audit Committee
The Audit
Committee of the Board of Directors oversees Avigens corporate accounting and
financial reporting process and has the direct responsibility for the
appointment, compensation, retention and oversight of the work of Avigens
independent registered public accounting firm, which reports directly and is
accountable to the Audit Committee. For this purpose, the Audit Committee
performs several functions. The Audit Committee met eight times during the
fiscal year. The Audit Committee: has the sole authority to select, evaluate,
replace and determine the compensation for Avigens independent registered
public accounting firm; evaluates the independent registered public accounting
firms performance and assesses its qualifications; has the sole authority to
approve audit and permissible non-audit services to be performed by Avigens
independent registered public accounting firm; oversees the independence of
Avigens independent registered public accounting firm and is responsible for
receiving written statements from Avigens independent registered public
accounting firm delineating all relationships between Avigens independent
registered public accounting firm and Avigen consistent with Independence
Standards Board Standard No. 1; establishes and maintains procedures, as
required under applicable law, for the receipt, retention and treatment of
complaints received by Avigen regarding accounting, internal accounting controls
or auditing matters and the confidential and anonymous submission by employees
of concerns regarding questionable accounting or auditing matters; reviews with
Avigens independent registered public accounting firm the adequacy and
effectiveness of Avigens internal control over financial reporting; meets to
review Avigens annual audited financial statements and quarterly financial
statements with management and the independent registered public accounting
firm, including reviewing Avigens disclosures under Managements Discussion
and Analysis of Financial Condition and Results of Operations; and has the
specific responsibilities and authority necessary to comply with the Nasdaq
listing standards applicable to audit committees. The Audit Committee is
governed by a written Audit Committee Charter. A current copy is available on
our website at www.avigen.com.
The Board of
Directors annually reviews the Nasdaq listing standards definition of
independence for audit committee members and has determined that all members of
Avigens Audit Committee are independent (as independence is currently defined
in Rule 4350(d)(2)(A)(i) and (ii) of the Nasdaq listing standards). Pursuant to
applicable SEC rules, Avigen is required to disclose whether it has an audit
committee financial expert serving on its Audit Committee. Although each member
of the Audit Committee has been selected by the Board of Directors based on the
Board of Directors determination that they are fully qualified to monitor the
performance of management, the public disclosures by Avigen of its financial
condition and results of operations, Avigens internal control over financing
reporting and the performance of Avigens independent registered public
accounting firm, as well as to analyze and evaluate Avigens financial
statements, the Board of Directors has determined that none of the members of
the Audit Committee meet all of the criteria set forth in such rules qualifying
them as an audit committee financial expert. The Board of Directors has
determined that it is not inappropriate for the Audit Committee not to have an
audit committee financial expert because Avigens financial statements are not
overly complex, given the current stage of Avigens development, and the fact
that Avigen does not currently have any regular revenue from operations, such
that, in the judgment of the Board of Directors, the financial sophistication of
the current members of the Audit Committee, as proven by their service on the
Audit Committee over the years as well as in their occupations outside of
Avigen, is sufficient for the Audit Committee to ensure the integrity of
Avigens financial statements and to fully and completely fulfill its role under
its charter. In addition, the Audit Committee has the ability on its own to
retain and determine the compensation for, at Avigens expense, special legal,
accounting or other advisors or consultants whenever it deems necessary or
appropriate.
REPORT OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
1
The Audit
Committee of the Board of Directors for the fiscal year ended December 31, 2008
consisted of Drs. Horovitz, Öhrström and Prendergast. All members of Avigens
Audit Committee are independent (as independence is defined in Rules 4200(a)(15)
and 4350(d)(2) of the Nasdaq listing standards). The Audit Committee is governed
by a written Audit Committee Charter adopted by the Board of
Directors.
____________________
1
The material in this report is not soliciting material, is
not deemed filed with the SEC and is not to be incorporated by reference into
any filing of Avigen under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or after the
date hereof and irrespective of any general incorporation language in any such
filing.
16
The Audit
Committee oversees Avigens financial reporting process on behalf of the Board
of Directors. Management has primary responsibility for the financial statements
and the reporting process including the systems of internal controls and
disclosure controls and procedures. In fulfilling its oversight
responsibilities, the Audit Committee reviewed the audited financial statements
in Avigens Annual Report on Form 10-K with management, including a discussion
of the quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments and the clarity of disclosures in the
financial statements.
The Audit
Committee is responsible for reviewing, approving and managing the engagement of
Avigens independent registered public accounting firm, including the scope,
extent and procedures of the annual audit and compensation to be paid therefor,
and all other matters the Audit Committee deems appropriate, including the
independent registered public accounting firms accountability to the Board of
Directors and the Audit Committee. The Audit Committee reviewed with Avigens
independent registered public accounting firm, which is responsible for
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles in the United States, its
judgments as to the quality, not just the acceptability, of Avigens accounting
principles and such other matters as are required to be discussed with the Audit
Committee under generally accepted auditing standards and those matters required
to be discussed by the Statement on Auditing Standards No. 114,
The Auditors Communication with those charged with
Governance, which superseded
the Statement on
Auditing Standards No. 61. In addition, the Audit Committee has discussed with
Avigens independent registered public accounting firm its independence from
management and Avigen, including the matters in the written disclosures and
letter received by the Audit Committee from Avigens independent registered
public accounting firm as required by the Independence Standards Board Standard
No. 1, and has considered the compatibility of non-audit services, if any, with
the independence of Avigens independent registered public accounting
firm.
The Audit
Committee discussed with Avigens independent registered public accounting firm
the overall scope and plans for its audits. The Audit Committee meets with the
independent registered public accounting firm, with and without management
present, to discuss the results of its examinations, its evaluation of Avigens
internal control over financial reporting, and the overall quality of Avigens
financial reporting.
As of the date of this proxy statement,
Avigens financial statements for 2008 had not been completed.
The Audit
Committee has retained, subject to stockholder ratification at the 2009 Annual
Meeting of Stockholders, Odenberg, Ullakko, Muranishi & Co. LLP as Avigens
independent registered public accounting firm for the fiscal year ending
December 31, 2009.
AUDIT COMMITTEE
J
OHN
K.
A.
P
RENDERGAST
,
P
H
.D.
(
C
HAIR
)
Z
OLA
H
OROVITZ
,
P
H
.D.
J
AN
K.
Ö
HRSTRÖM
,
M.D.
Compensation Committee
The
Compensation Committee of the Board of Directors for the fiscal year ended
December 31, 2008 consisted of Dr. Prendergast and Mr. Wallace, and Dr. Iwaki
prior to his resignation from the Board of Directors effective May 19, 2008. Dr.
Dilly joined the Compensation Committee effective February 6, 2009. All members
of Avigens Compensation Committee are independent (as independence is currently
defined in Rule 4200(a)(15) of the Nasdaq listing standards. The Compensation
Committee met six times during the 2008 fiscal year. The Compensation Committee
has adopted a written charter. A current copy is available to stockholders on
our website at www.avigen.com.
17
The Compensation Committee of the
Board of Directors acts on behalf of the Board of Directors to review, approve
and oversee Avigens compensation strategy, policies, plans and programs,
including:
-
establishment of corporate and individual performance objectives
relevant to the compensation of Avigens executive officers and other senior
management and evaluation of performance in light of these stated
objectives;
-
review and recommendation to the Board
of Directors for approval of the compensation and other terms of employment or
service, including severance and change-in-control arrangements, of Avigens
Chief Executive Officer and other senior management;
-
administration of Avigens equity
compensation plans, pension and profit-sharing plans, deferred compensation
plans and other similar plan and programs; and
-
review of Avigens Compensation
Discussion and Analysis with management and consideration of whether to
recommend that it be included in proxy statements and other filings.
Compensation Committee Processes and
Procedures
Typically,
the Compensation Committee meets quarterly and with greater frequency if
necessary. The agenda for each meeting is usually developed by the Committee
Chair, in consultation with the Chief Executive Officer. The Compensation
Committee meets regularly in executive session. However, from time to time,
various members of management may be invited by the Compensation Committee to
make presentations, provide financial or other background information or advice
or otherwise participate in Compensation Committee meetings. The Chief Executive
Officer reviews the performance of each executive officer, other than his own,
with the Compensation Committee and makes compensation recommendations, which
the Compensation Committee considers in its final determination. The Chief
Executive Officer may not participate in or be present during any deliberations
or determinations of the Compensation Committee regarding his compensation or
individual performance objectives. The charter of the Compensation Committee
grants the Compensation Committee full access to all books, records, facilities
and personnel of Avigen, as well as authority to obtain, at the expense of
Avigen, advice and assistance from internal and external legal, accounting or
other advisors and consultants and other external resources that the
Compensation Committee considers necessary or appropriate in the performance of
its duties. In particular, the Compensation Committee has the sole authority to
retain compensation consultants to assist in its evaluation of executive and
director compensation, including the authority to approve the consultants
reasonable fees and other retention terms.
Historically, the Committee evaluates managements and each individuals
performance based on the achievement of corporate goals set by the Chief
Executive Officer and the Board of Directors. During 2008, the Compensation
Committee met in session several times and discussed Avigens performance toward
achieving its established operating objectives, as well as the performance of
individual members of senior management. However, given the companys immediate
efforts to preserve cash in response to the termination of the AV650 program,
the Committee, with the support of management, determined not to take any
immediate actions on compensation for fiscal 2008.
The specific
determinations of the Compensation Committee with respect to executive
compensation for fiscal 2008 are described in greater detail in the Compensation
Discussion and Analysis section of this proxy statement.
Compensation Committee Interlocks and
Insider Participation
Dr.
Prendergast, Mr. Wallace and Dr. Iwaki served as members of the Compensation
Committee during the fiscal year ended December 31, 2008. Dr. Dilly joined the
Compensation Committee effective February 6, 2009. No member of the Committee
was, at any time during fiscal 2008, an officer or employee of Avigen. Dr.
Prendergast was an executive officer of Avigen from December 1992 to March 1996.
There are no Compensation Committee interlocks between Avigen and any other
entities involving our executive officers and Board members who serve as
executive officers or Board members of such entities.
18
Compensation Committee
Report
2
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis contained in this proxy statement. Based on
this review and discussion, the Compensation Committee has recommended to the
Board of Directors that the Compensation Discussion and Analysis be included in
this proxy statement and incorporated into our Annual Report on Form 10-K for
the fiscal year ended 2008.
COMPENSATION COMMITTEE
J
OHN
K.
A.
P
RENDERGAST
,
P
H
.D.
(
C
HAIR
)
R
ICHARD
W
ALLACE
,
B.C
OM
.
(H
ONS
)
S
TEPHEN
D
ILLY
,
M.B.B.S.,
P
H
.D.
Corporate Governance and Nominating
Committee
The
Corporate Governance and Nominating Committee of the Board of Directors, in
consultation with the Chief Executive Officer, has the primary responsibility
for establishing criteria for Board membership and identifying, evaluating,
reviewing and recommending qualified candidates to serve as directors of Avigen.
The Corporate Governance and Nominating Committee also has the primary
responsibility for evaluating, reviewing and considering the recommendation for
nomination of current directors for election to the Board of Directors as well
as monitoring the size of the Board of Directors, has the power and authority to
consider Board nominees and proposals submitted by Avigens stockholders and to
establish any procedures to facilitate stockholder communication with the Board
of Directors. In this regard, the Corporate Governance and Nominating Committee
recommended to the Board of Directors that each director be nominated in his
class at the Annual Meeting of Stockholders. The Corporate Governance and
Nominating Committee also periodically reviews, discusses and assesses the
performance of the Board of Directors and Board committees; annually recommends
to the Board of Directors the chairmanship and membership of each Board
committee; develops corporate governance principles and periodically reviews and
assesses these principles and their application; oversees and reviews the
processes and procedures used by Avigen to provide information to the Board of
Directors and its committees; and periodically reviews the compensation paid to
non-employee directors for their service on the Board of Directors and its
committees, and recommends any changes to the full Board of Directors for its
approval. Avigens Corporate Governance and Nominating Committee charter is
available on our website at www.avigen.com. All members of the Corporate
Governance and Nominating Committee are independent (as independence is
currently defined in Rule 4200(a)(15) of the Nasdaq listing
standards).
The
Corporate Governance and Nominating Committee believes that candidates for
director should have certain minimum qualifications, including being able to
read and understand basic financial statements, being over 21 years of age and
having the highest personal integrity and ethics. The Corporate Governance and
Nominating Committee also intends to consider such factors as possessing
relevant expertise upon which to be able to offer advice and guidance to
management, having sufficient time to devote to the affairs of Avigen,
demonstrated excellence in his or her field, having the ability to exercise
sound business judgment and having the commitment to rigorously represent the
long-term interests of Avigens stockholders. However, the Corporate Governance
and Nominating Committee retains the right to modify these qualifications from
time to time. Candidates for director nominees are evaluated by the Corporate
Governance and Nominating Committee in the context of the current composition of
the Board of Directors, the operating requirements of Avigen and the long-term
interests of Avigens stockholders. In conducting this assessment, the Corporate
Governance and Nominating Committee considers the criteria for director
qualifications set by the Board of Directors, as well as diversity, age, skills,
and such other factors as it deems appropriate given the current needs of the
Board of Directors and Avigen to maintain a balance of knowledge, experience and
capability. In the case of incumbent directors whose terms of office are set to
expire, the Corporate Governance and Nominating Committee reviews such
directors overall service to Avigen during their term, including the number of
meetings attended, level of participation, quality of performance, and any other
relationships and transactions that might impair such directors independence.
__________________
2
The material in this report
is not soliciting material, is not deemed filed with the SEC and is not to
be incorporated by reference into any filing of Avigen under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether
made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
19
In the case of new director candidates,
the Corporate Governance and Nominating Committee will also determine whether
the nominee must be independent for Nasdaq purposes, which determination is
based upon applicable Nasdaq listing standards, applicable SEC rules and
regulations and the advice of counsel, if necessary. The Corporate Governance
and Nominating Committee may also use its network of contacts to compile a list
of potential candidates, but may also engage, if it deems appropriate, a
professional search firm. The Corporate Governance and Nominating Committee
conducts any appropriate and necessary inquiries into the backgrounds and
qualifications of possible candidates after considering the function and needs
of the Board of Directors. The Corporate Governance and Nominating Committee
meets to discuss and consider such candidates qualifications and then selects,
by majority vote, a nominee for recommendation to the Board of Directors.
The
Corporate Governance and Nominating Committee will consider director candidates
recommended by stockholders. The Corporate Governance and Nominating Committee
does not intend to alter the manner in which it evaluates candidates based on
whether the candidate was recommended by a stockholder. Stockholders who wish to
recommend individuals for consideration by the Corporate Governance and
Nominating Committee to become nominees for election to the Board of Directors
may do so by delivering a written recommendation to the Corporate Governance and
Nominating Committee at the following address: 1301 Harbor Bay Parkway, Alameda,
California 94502, not less than six months prior to any meeting at which
directors are to be elected. Submissions must include the full name of the
proposed nominee, a description of the proposed nominees business experience
for at least the previous five years, complete biographical information, a
description of the proposed nominees qualifications as a director and a
representation that the nominating stockholder is a beneficial or record owner
of Avigens stock. Any such submission must be accompanied by the written proxy
of the proposed nominee to be named as a nominee and to serve as a director if
elected. To date, the Corporate Governance and Nominating Committee has not
received a timely director nominee from a stockholder of Avigen.
STOCKHOLDER COMMUNICATIONS WITH THE
BOARD OF DIRECTORS
Avigens
Board of Directors has adopted a formal process by which stockholders may
communicate with the Board of Directors or any of its directors. Stockholders
who wish to communicate with the Board of Directors or an individual director
may send a written communication addressed as follows: Avigen Board
Communication, 1301 Harbor Bay Parkway, Alameda, California 94502.
Communications may also be sent by e-mail to the following address:
board@avigen.com. Each communication sent must state the number of shares owned
by the stockholder making the communication. Each communication will be reviewed
by the Corporate Secretary of Avigen who will forward such communication to the
Board of Directors or to any individual director to whom the communication is
addressed unless the communication is unduly frivolous, hostile, threatening or
similarly inappropriate, in which case, the Corporate Secretary will discard the
communication.
CODE OF BUSINESS CONDUCT AND ETHICS
Avigen has
adopted a Code of Business Conduct and Ethics that applies to all officers,
directors and employees. The Code of Business Conduct and Ethics is available on
our website at www.avigen.com. The Code of Business Conduct and Ethics may be
found as follows:
-
From our
main Web page, first click on Investors.
-
Next, click on Corporate Governance.
-
Next, click on Conduct.
-
Finally, click on Code of Business
Conduct and Ethics.
Avigen
intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K
regarding an amendment to, or waiver from, a provision of the Code of Business
Conduct and Ethics by posting such information on its website at the address and
the location specified above.
20
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information regarding the ownership of
Avigens common stock as of January 31, 2009 by: (1) each director and nominee
for director; (2) each of the executive officers named in the Summary
Compensation Table; (3) all executive officers and directors of Avigen as a
group; and (4) all those known by Avigen to be beneficial owners of more than
five percent of its common stock. Percentage ownership amounts are based on
29,769,115 outstanding shares as of January 31, 2009.
|
|
Beneficial Ownership (1)
|
|
|
Number of
|
|
Percent of
|
Beneficial Owner
|
|
Shares
|
|
Total
|
Kenneth Chahine, J.D., Ph.D. (2)
|
|
743,155
|
|
|
|
2.44
|
%
|
Andrew Sauter
(3)
|
|
277,955
|
|
|
|
*
|
|
Michael Coffee (2)
|
|
348,997
|
|
|
|
1.16
|
%
|
Kirk Johnson,
Ph.D. (2)
|
|
333,859
|
|
|
|
1.11
|
%
|
M. Christina Thomson, J.D.(2)
|
|
350,344
|
|
|
|
1.16
|
%
|
Stephen Dilly,
M.B.B.S., Ph.D. (2)
|
|
22,300
|
|
|
|
*
|
|
Zola Horovitz, Ph.D.(4)
|
|
147,500
|
|
|
|
*
|
|
Jan Öhrström,
M.D. (2)
|
|
22,300
|
|
|
|
*
|
|
John Prendergast, Ph.D.(5)
|
|
141,608
|
|
|
|
*
|
|
Richard Wallace
(2)
|
|
39,950
|
|
|
|
*
|
|
All executive officers and directors as a group (10
persons)(6)
|
|
2,427,968
|
|
|
|
7.55
|
%
|
|
5% Stockholders
|
|
|
|
|
|
|
|
BVF, Inc.
(7)
|
|
8,819,600
|
|
|
|
29.6
|
%
|
900 North Michigan Avenue, Suite 1100
|
|
|
|
|
|
|
|
Chicago, IL 60611
|
|
|
|
|
|
|
|
|
HealthCor Management, L.P. (8)
|
|
1,950,000
|
|
|
|
6.55
|
%
|
Carnegie Hall Tower
|
|
|
|
|
|
|
|
152 West 57th Street, 47th Floor
|
|
|
|
|
|
|
|
New York, NY 10019
|
|
|
|
|
|
|
|
____________________
*
|
|
Less than one percent.
|
|
|
|
(1)
|
|
This table is based upon information
supplied by officers, directors and principal stockholders and Schedules
13G filed with the SEC. Unless otherwise indicated in the footnotes to
this table and subject to community property laws where applicable, Avigen
believes that each of the stockholders named in this table has sole voting
and investment power with respect to the shares indicated as beneficially
owned. Applicable percentages are based on 29,769,115 shares outstanding
on January 31, 2009, adjusted as required by rules promulgated by the SEC.
Unless otherwise indicated, the address of each of the individuals and
entities listed in this table is c/o Avigen at the address on the first
page of this proxy statement.
|
|
|
|
(2)
|
|
Consists solely of shares issuable
upon the exercise of options that are exercisable within 60 days of the
date of this table.
|
|
|
|
(3)
|
|
Includes 273,830 shares issuable
upon the exercise of options held by Mr. Sauter that are exercisable
within 60 days of the date of this table.
|
|
|
|
(4)
|
|
Includes 142,500 shares issuable
upon the exercise of options held by Dr. Horovitz that are exercisable
within 60 days of the date of this table.
|
21
(5)
|
|
Includes 102,500 shares issuable
upon the exercise of options held by Dr. Prendergast that are exercisable
within 60 days of the date of this table.
|
|
|
|
(6)
|
|
Includes an aggregate of 2,379,735
shares issuable upon exercise of options which executive officers and
directors of Avigen have the right to acquire within 60 days of the date
of this table.
|
|
|
|
(7)
|
|
Based upon a Schedule 13D/A filed
with the SEC on January 12, 2009 by Biotechnology Value Fund, L.P. and
includes shares owned by the following affiliated entities: (a)
Biotechnology Value Fund, L.P. (Fund I) 1,975,340 shares; (b)
Biotechnology Value Fund II, L.P. (Fund II) 1,364,911 shares; (c) BVF
Investments, L.L.C. (Investments) 4,969,764 shares; and (d) Investment
10, L.L.C. (Investment 10) 509,585 shares. BVF, Inc. (BVF) and BVF
Partners (Partners and, together with Fund I, Fund II, Investments and
BVF, the BVF Entities) beneficially own 8,819,600 aggregate shares.
|
|
|
|
(8)
|
|
Based upon a Schedule 13G filed with
the SEC on May 14, 2008. Collectively, HealthCor, L.P., Healthcor
Offshore, Ltd. and HealthCor Hybrid Offshore, Ltd. (each a Fund and
together, the Funds) are the beneficial owners of a total of 1,950,000
shares of Avigen common stock. By virtue of its position as the investment
manager of the Funds, HealthCor Management, L.P. may be deemed a
beneficial owner of all the shares of common stock owned by the Funds.
HealthCor Associates, LLC is the general partner of HealthCor Management,
L.P. and thus may also be deemed to beneficially own the shares of Common
Stock that are beneficially owned by the Funds. HealthCor Group LLC is the
general partner of HealthCor Capital, L.P., which is in turn the general
partner of HealthCor, L.P. Accordingly, each of HealthCor Capital L.P. and
HealthCor Group, LLC may be deemed to beneficially own the shares of
common stock that are beneficially owned by HealthCor, L.P. As the
Managers of HealthCor Associates, LLC, Arthur Cohen and Joseph Healey
exercise both voting and investment power with respect to the shares of
common stock, and therefore each may be deemed a beneficial owner of such
common stock. Each of the reporting persons disclaims any beneficial
ownership of any such shares in excess of their actual pecuniary interest
therein. The address for all entities other than Arthur Cohen is set forth
in the table, and the address of Arthur Cohen is 12 South Main Street,
#203 Norwalk, CT 06854.
|
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 (the
1934 Act
) requires Avigens
directors and executive officers, and persons who own more than ten percent of a
registered class of Avigens equity securities, to file with the SEC initial
reports of ownership and reports of changes in ownership of common stock and
other equity securities of Avigen. Officers, directors and greater than ten
percent stockholders are required by SEC regulation to furnish Avigen with
copies of all Section 16(a) forms they file.
To Avigens
knowledge, based solely on a review of the copies of such reports furnished to
Avigen and written representations that no other reports were required, during
the fiscal year ended December 31, 2008, all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
CHANGE IN CONTROL OF AVIGEN, INC.
Since
January 1, 2008, based on Form 4s filed with the SEC starting in October 2008,
BVF has increased the number of shares it beneficially owns from 1,596,837
aggregate shares, or 5.4%, to 8,819,600 aggregate shares, or 29.6% -- an
increase in BVFs ownership of 24.3%. Such shares are owned by the following
entities affiliated with BVF and BVF Partners, L.P.: (a) Fund I - 1,975,340
shares; (b) Fund II - 1,364,911 shares; (c) Investments - 4,969,764 shares; and
(d) Investment 10 - 509,585 shares.
Based on a
Schedule 13D/A filed on January 12, 2009 by Biotechnology Value Fund, L.P., on
January 9, 2009, the BVF Entities, Mark N. Lampert, Matthew D. Perry, Oleg
Nodelman Robert M. Coppedge entered into a Joint Filing and Solicitation
Agreement (the Joint Filing and Solicitation Agreement) in which, among other
things, (a) the parties agreed to the joint filing and solicitation on behalf of
each of them of statements on Schedule 13D with respect to Avigens securities
to the extent required under applicable securities laws and (b) the parties
agreed to form a group for the purpose of soliciting proxies or written consents
in support of the election of Messrs. Lampert, Nodelman, Perry and Coppedge and
certain other proposals at the Special Meeting and for the purpose of taking all
other actions incidental to the foregoing. Additionally, pursuant to a letter
agreement, BVF has agreed to indemnify Mr. Coppedge against claims arising from
the solicitation of proxies from Avigens stockholders at the Special Meeting
and any related transactions.
22
EXECUTIVE OFFICERS
Our executive officers and their
respective ages and positions as of January 31, 2009, are as follows:
Name
|
|
Age
|
|
Position
|
Kenneth G. Chahine, J.D., Ph.D.
|
|
43
|
|
President, Chief Executive Officer and Director
|
|
|
|
|
|
Michael D. Coffee
|
|
63
|
|
Chief Business Officer
|
|
|
|
|
|
Kirk Johnson, Ph.D.
|
|
49
|
|
Vice President, Research and Development
|
|
|
|
|
|
Andrew A. Sauter
|
|
41
|
|
Chief Financial Officer
|
|
|
|
|
|
M. Christina Thomson, J.D.
|
|
37
|
|
Vice President, General Counsel and Secretary
|
All of our
officers are elected annually by the Board of Directors. There is no family
relationship between or among any of the officers or directors.
Kenneth
G. Chahine, J.D., Ph.D.,
was appointed
President, Chief Executive Officer and director of Avigen in March 2004. Dr.
Chahine had previously served as Avigens Chief Operating Officer since July
2002 and as Vice President, Business Development and Intellectual Property since
1998. Prior to joining Avigen, Dr. Chahine worked at the patent law firm of
Madson & Metcalf, P.C. in Salt Lake City, Utah from 1994 to 1998. From 1992
to 1993, he worked as a research scientist at Parke-Davis Pharmaceuticals, a
pharmaceutical company, and held another research scientist post at the
University of Utah Department of Human Genetics from 1994 to 1996. Dr. Chahine
served as western regional news and legal correspondent for
Nature Biotechnology
from
1996 to 2002. Dr. Chahine holds a J.D. from the University of Utah and a Ph.D.
in biochemistry and molecular biology from the University of
Michigan
.
Michael
D. Coffee
has served as Avigens Chief
Business Officer since February 2005. Prior to joining Avigen, Mr. Coffee
co-founded the Alekta Group, LLC in 2004, a consulting firm, to provide a
comprehensive range of pharmaceutical development consulting services to
emerging pharmaceutical companies. From 2001 to 2004 Mr. Coffee served as
President and Chief Operating Officer of Amarin Pharmaceuticals, Inc., the U.S.
drug development and marketing subsidiary of Amarin Corporation PLC. Mr. Coffee
also served as President and Chief Operating Officer of Elan Pharmaceuticals,
North America from 1998 to 2001 and held marketing and executive management
positions, including President and Chief Operating Officer, of Athena
Neurosciences, Inc. between 1991 and 1998. Mr. Coffee received a B.S. in biology
from Siena College.
Kirk
Johnson, Ph.D.,
was appointed Vice President,
Research and Development in December 2006. Dr. Johnson joined Avigen in January
2004 and was appointed Vice President, Preclinical Development in June 2004 and
has played a major role in redirecting the company and establishing the
pipeline. Prior to joining Avigen, Dr. Johnson was Senior Director, Pharmacology
& Preclinical Development and a member of the executive management team of
Genesoft Pharmaceuticals, a pharmaceutical company, from 2001 to 2004. From 1991
to 2001, Dr. Johnson was employed in both protein and small molecule therapeutic
research and development at Chiron Corporation, a biopharmaceutical company, and
eventually served as Director, Pharmacology and Preclinical Research. Dr.
Johnson was involved in leading IND-enabling programs, supporting clinical
development, and contributing to successful IND and NDA filings at Chiron and
Genesoft. In addition to general pharmacology and other preclinical development
responsibilities, he has led research and clinical development projects for
diverse indications including neuropathic pain, hemophilia, antibacterials,
diabetes, obesity, acute inflammation and cardiovascular disease and has
published more than 60 manuscripts and holds 5 U.S. patents. Dr. Johnson earned
a B.S. in toxicology from U.C. Davis, and a Ph.D. in pharmacology and toxicology
from the Medical College of Virginia. He completed postdoctoral fellowships
studying the mechanism of action of IL-2 from 1986-1991 at both Dartmouth
Medical School and the University of California, Berkeley.
23
Andrew A.
Sauter
was appointed Chief Financial Officer
in February 2008 after having served as Vice President, Finance since January
2006. Mr. Sauter joined Avigen as Controller in November 1999. Mr. Sauter
oversees the financial reporting obligations of Avigen and its information
technology needs. From 1992 to 1999, Mr. Sauter worked for BankAmerica
Corporation in a variety of positions, including most recently as a vice
president in the Capital Markets Finance organization. From 1989 to 1992, he
worked for Ernst & Young LLP. Mr. Sauter is a certified public accountant
and holds a B.A. degree in economics from Claremont McKenna College.
M.
Christina Thomson, J.D.,
was appointed Vice
President, General Counsel in January 2009. Ms. Thomson joined Avigen in
February 2000 and was appointed Vice President, Corporate Counsel in June 2004.
She has also served as our Chief Compliance Officer since March 2004 and
Corporate Secretary since January 2006. Ms. Thomson is a registered patent
attorney, and has managed significant growth in Avigens patent portfolio over
the last seven years. Ms. Thomson also oversees the companys litigation and
administrative patent proceedings, as well as contract administration. Prior to
joining Avigen, Ms. Thomson worked as a patent attorney with the law firm Knobbe
Martens Olson & Bear LLP in Newport Beach, California, as a patent agent
with Madson & Metcalf, P.C. in Salt Lake City, Utah, and as a scientist for
Myriad Genetic Laboratories. Ms. Thomson holds a J.D. from the University of
Utah College of Law and an M.S. in biology from the University of Utah.
EXECUTIVE COMPENSATION
C
OMPENSATION
D
ISCUSSION
A
ND
A
NALYSIS
Compensation Philosophy
Our
compensation approach is designed to reward the achievement of corporate
objectives and individual performances that contribute toward building a
sustainable business that develops differentiated products to improve the health
and quality of life of patients and creates value for our stockholders. To this
end, the Board of Directors and management establish annual and long-term
corporate goals that reflect the priorities of our product and business
development plans. Our Board of Directors and management review these goals on a
regular basis and our Compensation Committee (the Committee) uses these
objectives to determine levels of compensation for executive officers to ensure
management incentives are aligned with the interests of stockholders.
Avigens
compensation practice is designed to provide remuneration packages that are
commensurate with the marketplace in which we compete to attract and motivate
our executive officers, management and staff to achieve our strategic
objectives. Specifically, we review base salaries annually and, along with a
comprehensive array of medical, health, life insurance and disability plans
generally available to all our employees,, set salaries at levels that are
intended to attract, engage and retain executive officers whose abilities are
critical to our long-term success and competitiveness. We vary bonus payments
annually based on a performance structure designed to reward results and balance
individual accountability with team-oriented collaboration that fosters
integrity and a high-performance culture. Historically, we also issue
equity-based compensation annually in varying amounts that are intended to
represent a significant portion of each executives total compensation package
because we believe it promotes innovation and calculated assessment and
management of risk designed to achieve Avigens long-term objectives.
Drug
development is slow, costly and associated with a high failure rate. Therefore,
successful drug development can extend over many years and requires our
executives to employ their judgment in developing long-term operating plans
that:
-
identify
meaningful treatments for patients,
-
effectively demonstrate the safety and efficacy of our products, and
-
protect our intellectual property and optimize the use of our financial
resources in order to maximize value retention for our stockholders.
24
The
Committee believes that in determining compensation, management performance
should be evaluated against specific strategic objectives that create
shareholder value. Complete achievement of these strategic objectives may extend
beyond a given compensation period; therefore, the Committee must use its
discretionary judgment based on the experience and knowledge within the industry
of its members, in assessing the quality of managements performance within an
established framework of general parameters for annual compensation.
Compensation Components
The
Committee draws on a number of reference sources to assist in the evaluation of
the various components of executive compensation. One source is industry data
compiled in the Radford Biotechnology Survey which represents a nationally-based
assessment of executive compensation widely used within the pharmaceutical and
biotechnology industry sectors. The Committee generally focuses on regional data
from companies in the San Francisco Bay Area and targets compensation levels
that fall within the 50
th
and 70
th
percentiles reported
for comparable positions based on the Committees subjective determination as to
the appropriate range to attract and retain our executives given the size of our
company. In addition, the Committee examines performance compensation packages
of a number of selected companies that develop products for similar neurological
indications or that are at a similar employee size and development stage. In
2007, this group consisted of Acorda Therapeutics, Inc., XenoPort, Inc.,
Renovis, Inc., Pain Therapeutics, and Palatin Technologies, Inc., however, in
2008, given the companys immediate efforts to preserve cash in response to the
termination of the AV650 program, the Committee, with the support of management,
determined not to take any immediate actions on compensation for fiscal 2008,
and so the Committee did not conduct a competitive analysis of compensation
packages from other companies.
To establish
the relationship between executive compensation and the creation of stockholder
value, the Committee subjectively evaluates the success of the management team
as a whole and each individual executives performance in contributing to
achieving the companys strategic objectives. The Committee applies its
assessment within the framework of our compensation program which defines a
discretionary range in which to determine individual compensation adjustments
for each executive officer. Our compensation program consists of three principal
components: salary, short-term incentive compensation consisting of incentive
bonus payments, and long-term incentive compensation consisting of equity
grants. Each year, the Committee reviews executive officer compensation using
summary tally sheets that show for each of the executive officers the
following: (a) summary of total compensation; (b) each element of current
compensation; and (c) cumulative amount of all previously issued equity awards.
Base
Salary.
The Committee reviews each executives base salary annually. Among the
factors taken into consideration are (1) individual performance, (2) corporate
performance measured against strategic objectives, (3) levels of responsibility,
(4) prior experience, (5) breadth of knowledge of the industry, and (6)
competitive pay practices examined from industry source material discussed
above. The Committee does not assign any specific weighting to these various
factors when determining base salary.
Incentive
Bonus.
The Committee sets target incentive
levels annually for each executive officer in consultation and discussion with
Dr. Chahine, other than for his own target incentive level. Ordinarily, the
Committee considers industry data compiled by Radford and determines the
appropriate level of target incentive bonus award for our chief executive
officer and for our other executive officers as a percentage of their respective
base salaries based on the Committees subjective determination as to the
appropriate range to attract and retain our executive officers given the size of
the company, assigning the actual percentage within this range based upon the
level of each executive officers responsibility and experience. The Committee
determines actual bonus payments based on subjective assessments of the
performance of management and individual officers in achieving the companys
strategic objectives, applied to these target incentive levels. As a function of
this process, the Committee met several times throughout the year with Dr.
Chahine to review the status of the management teams individual contributions.
The 2008 strategic objectives against which corporate performance was intended
to be measured are discussed below under 2008 Performance.
25
The
Committee establishes the companys strategic objectives in discussions with Dr.
Chahine at the beginning of the compensation period to ensure that its
performance evaluations at the end of the compensation period reflect the
strategic priorities of the company to create value for our stockholders.
Ordinarily, Dr. Chahine reviews the performance of the company and of each
executive officer, other than his own, with the Committee at the end of the
compensation period and makes recommendations to the Committee for its review
and final determination.
Equity
Incentives.
The Committee is responsible for
making stock option grants under Avigens 2006 Equity Incentive Plan (the
2006 Plan
), and believes that long-term stockholder value is best achieved
through an ownership culture among all our employees, particularly our
executives, through grants of stock-based awards.
The
Committee grants stock-based awards under the 2006 Plan with multi-year vesting
periods designed as incentives to retain key employees to continue in the employ
of Avigen. Through option grants, executives receive significant equity
incentives to build long-term stockholder value. The exercise price of options
granted under the 2006 Plan is 100% of fair market value of the underlying stock
on the date of grant. Employees receive value from these grants only if Avigens
common stock appreciates over the long-term. The size of option grants is
determined based primarily on Avigens philosophy of significantly linking
executive compensation with stockholder interests, the individual criteria set
forth below, and the Committees use of industry sources in order to be
knowledgeable of compensation practices for companies of a similar size and
development stage in the biotechnology and pharmaceutical industries.
Historically, the Committee does not target any specific level as compared to
industry average in determining stock option grants.
Change in
Control Arrangements.
The Board of Directors,
upon the recommendation of the Committee, established a Management Transition
Plan (Transition Plan) in 1998, which was amended in March 2005 and again in
October 2008. The Transition Plan is intended to retain key employees and enable
executive officers to represent stockholder interests during periods involving a
possible change in control of the company, and to provide severance benefits in
the event of termination of employment without cause. The Transition Plan is
designed to protect the earned benefits of key employees, including executive
officers, against adverse changes that may result from a change in control of
the company or termination without cause. The level of payments provided under
the agreement for executives reflects the Committees subjective view, based
upon its experience, of comparable benefits offered to executives under change
of control arrangements at other companies within the industry in a similar
development stage. Each of our named executive officers are participants in the
plan and will receive the following benefits if their employment is
involuntarily terminated, or they resign as a result of a constructive
termination, as defined under the Plan:
-
15 months base salary (21 months in the
case of Dr. Chahine);
-
extended option exercisability of two
years;
-
full accelerated vesting of outstanding
stock options; and
-
15 months (18 months in the case of Dr.
Chahine) health benefits payments, or until such earlier date as the executive
officer secures subsequent employment that provides substantially similar
health benefits.
In October 2008, the Board amended
the Transition Plan to comply with certain changes in federal tax regulations
that were required to be made before December 31, 2008, and at the same time,
the Committee reviewed benefit levels offered by other companies within the
industry similar to Avigen. Based on this review, the Committee adjusted the
benefits included in the Transition Plan by adding an additional three months of
severance benefits for each executive officer and extending those benefits to
circumstances in which an executive officer was terminated without cause. The
amendments were adopted to make the Transition Plan comparable to benefits
offered by companies similar to Avigen, as without this security, we were at
risk of losing executive talent necessary to preserve the value of the companys
assets.
26
2008 Performance
At the
beginning of the year, the Committee determined to base its assessment of
Avigens overall performance for the fiscal year ended December 31, 2008 on the
following strategic objectives:
-
Quality
data from Phase II clinical development progress of AV650;
-
Responsible management of finances;
-
Clinical
development progress of AV411;
-
Development and progress toward clinical testing of AV513;
-
Evaluation, identification and
development of new product candidates for clinical testing, including
proprietary analogs for AV411; and
-
Execution of a strategic plan that
efficiently manages financial and staffing resources to support the research
and development needs of the company, including raising additional capital for
clinical testing.
Historically, the Committee applies
its discretion in determining a subjective evaluation of the overall performance
of the company. For fiscal 2008, the Committee took into consideration the
performance of management against all the 2008 strategic objectives, including
the quality execution of the AV650 Phase II clinical trial, responsible
management of finances, and the successful sale of companys early-stage AV513
program for $7 million, and authorized the accrual of $250,000 for bonus payouts
to executive officers. In discussions with Dr. Chahine, and given the companys
immediate efforts to preserve cash in response to the termination of the AV650
program, the Committee, with the support of management, has not authorized the
payout of any bonuses from that pool.
2009 Compensation
The
Committee, with the support of management, has determined (given the current
business environment) not to adjust base salaries for 2009, other than in
connection with the promotion of Ms. Thomson to Vice President, General Counsel.
Effective January 1, 2009. Ms. Thomsons base salary was increased to $267,931.
The Committee has not yet finalized or determined the relative weighting of
strategic objectives to be used as the basis for its evaluation of managements
performance for fiscal 2009.
S
UMMARY
C
OMPENSATION
T
ABLE
The
following table shows for the fiscal years ended December 31, 2008, 2007 and
2006, compensation awarded to or paid to, or earned by, Avigens Chief Executive
Officer, Chief Financial Officer and its three other most highly compensated
executive officers at December 31, 2008 (the
Named Executive Officers
).
Summary Compensation
Table
|
|
|
|
|
|
|
|
|
|
Option
|
|
All
Other
|
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Compensatio
n
|
|
|
|
Name and Principal
Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
(2)
|
|
($)
(3)
|
|
Total ($)
|
Kenneth G. Chahine, President
|
|
2008
|
|
$443,251
|
|
|
(1
|
)
|
|
$341,318
|
|
|
$4,552
|
|
|
$789,120
|
|
and Chief Executive Officer
|
|
2007
|
|
$426,613
|
|
|
$158,380
|
|
|
$333,763
|
|
|
$4,299
|
|
|
$923,055
|
|
|
|
2006
|
|
$407,239
|
|
|
$95,000
|
|
|
$271,027
|
|
|
$4,199
|
|
|
$777,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew A. Sauter, Chief
|
|
2008
|
|
267,931
|
|
|
(1
|
)
|
|
208,961
|
|
|
3,378
|
|
|
480,270
|
|
Financial Officer
|
|
2007
|
|
238,625
|
|
|
68,903
|
|
|
166,461
|
|
|
3,558
|
|
|
477,547
|
|
|
|
2006
|
|
229,017
|
|
|
28,000
|
|
|
98,733
|
|
|
3,458
|
|
|
359,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael D. Coffee, Chief
|
|
2008
|
|
313,903
|
|
|
(1
|
)
|
|
281,150
|
|
|
4,712
|
|
|
599,765
|
|
Business Officer
|
|
2007
|
|
302,120
|
|
|
90,636
|
|
|
237,876
|
|
|
4,711
|
|
|
635,343
|
|
|
|
2006
|
|
288,400
|
|
|
69,000
|
|
|
152,547
|
|
|
4,711
|
|
|
514,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kirk W. Johnson, Ph.D., Vice
|
|
2008
|
|
278,528
|
|
|
(1
|
)
|
|
249,062
|
|
|
4,451
|
|
|
532,040
|
|
President Research and
|
|
2007
|
|
248,824
|
|
|
74,025
|
|
|
282,000
|
|
|
4,091
|
|
|
608,940
|
|
Development
|
|
2006
|
|
237,524
|
|
|
46,000
|
|
|
192,092
|
|
|
4,091
|
|
|
479,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Christina Thompson, J.D.,
|
|
2008
|
|
221,524
|
|
|
(1
|
)
|
|
242,283
|
|
|
3,366
|
|
|
467,174
|
|
Vice President, General
|
|
2007
|
|
239,861
|
|
|
65,062
|
|
|
234,067
|
|
|
3,466
|
|
|
542,456
|
|
Counsel and Secretary
|
|
2006
|
|
239,444
|
|
|
46,000
|
|
|
162,436
|
|
|
3,466
|
|
|
451,346
|
|
27
________________________
(1)
|
|
The Compensation
Committee authorized the accrual of $250,000 for bonus payouts to
executive officers for 2008, but has not authorized the allocation or
payout of any bonuses from that pool.
|
|
(2)
|
|
The amounts shown in
this column represent the dollar amounts recognized for financial
statement reporting purposes for each fiscal year ended December 31, in
accordance with FAS 123(R), excluding an estimate of forfeitures related
to service-based vesting conditions, and thus include amounts from awards
granted in and prior to 2008. Assumptions used in the calculation of these
amounts are described in the notes to Avigens audited financial
statements for the fiscal year ended December 31, 2008, which will be
included in Avigens Annual Report on Form 10-K expected to be filed with
the SEC on March 16, 2009. All grants were made subject to individual
award agreements, the form of which was previously filed with the
SEC.
|
|
(3)
|
|
Except as otherwise
indicated, represents insurance premiums paid by Avigen with respect to
supplemental long-term care insurance for the benefit of the Named
Executive Officer and up to $2,500 of matching contributions to Avigens
401(k) savings plan.
|
G
RANTS
O
F
P
LAN
-B
ASED
A
WARDS
There were
no grants of plan-based awards to the Named Executive Officers for the fiscal
year ended December 31, 2008.
O
UTSTANDING
E
QUITY
A
WARDS AT
F
ISCAL
Y
EAR
E
ND
The
following table shows for the fiscal year ended December 31, 2008, certain
information regarding outstanding equity awards at fiscal year end for the Named
Executive Officers.
Outstanding Equity Awards at December
31, 2008
|
|
Option Awards (1)
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
|
Options (#)
|
|
Options (#)
|
|
Exercise
|
|
Expiration
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Price
($) (2)
|
|
Date
|
Kenneth Chahine (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,500
|
|
|
|
-
|
|
|
|
$5.88
|
|
|
01/16/09
|
|
|
|
17,500
|
|
|
|
-
|
|
|
|
5.38
|
|
|
07/01/09
|
|
|
|
25,000
|
|
|
|
-
|
|
|
|
29.00
|
|
|
05/19/10
|
|
|
|
75,000
|
|
|
|
-
|
|
|
|
38.19
|
|
|
06/14/10
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
14.63
|
|
|
03/09/11
|
|
|
|
37,500
|
|
|
|
-
|
|
|
|
8.53
|
|
|
07/02/12
|
|
|
|
75,000
|
|
|
|
-
|
|
|
|
3.53
|
|
|
05/20/13
|
|
|
|
125,000
|
|
|
|
-
|
|
|
|
3.38
|
|
|
06/25/14
|
|
|
|
26,812
|
|
|
|
6,188
|
|
|
|
3.14
|
|
|
07/01/15
|
|
|
|
137,500
|
|
|
|
12,500
|
|
|
|
5.06
|
|
|
02/22/16
|
|
|
|
52,500
|
|
|
|
37,500
|
|
|
|
5.50
|
|
|
01/03/17
|
|
|
|
37,775
|
|
|
|
75,549
|
|
|
|
4.42
|
|
|
12/05/17
|
Andrew Sauter
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
-
|
|
|
|
$17.50
|
|
|
11/01/09
|
|
|
|
5,000
|
|
|
|
-
|
|
|
|
29.00
|
|
|
05/19/10
|
|
|
|
13,333
|
|
|
|
-
|
|
|
|
14.63
|
|
|
03/09/11
|
|
|
|
7,500
|
|
|
|
-
|
|
|
|
8.53
|
|
|
07/02/12
|
|
|
|
13,000
|
|
|
|
-
|
|
|
|
3.53
|
|
|
07/11/13
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
3.13
|
|
|
08/10/14
|
|
|
|
14,062
|
|
|
|
938
|
|
|
|
3.25
|
|
|
01/03/15
|
|
|
|
8,187
|
|
|
|
2,813
|
|
|
|
3.45
|
|
|
07/12/15
|
|
|
|
34,375
|
|
|
|
15,625
|
|
|
|
3.63
|
|
|
01/18/16
|
|
|
|
45,833
|
|
|
|
4,167
|
|
|
|
5.06
|
|
|
02/22/16
|
|
|
|
37,917
|
|
|
|
27,083
|
|
|
|
5.50
|
|
|
01/03/17
|
|
|
|
27,282
|
|
|
|
54,563
|
|
|
|
4.42
|
|
|
12/05/17
|
Michael Coffee (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,625
|
|
|
|
9,375
|
|
|
|
$2.86
|
|
|
02/23/15
|
|
|
|
5,687
|
|
|
|
1,313
|
|
|
|
3.14
|
|
|
07/01/15
|
|
|
|
105,416
|
|
|
|
9,584
|
|
|
|
5.06
|
|
|
02/22/16
|
|
|
|
37,917
|
|
|
|
27,083
|
|
|
|
5.50
|
|
|
01/03/17
|
|
|
|
27,282
|
|
|
|
54,563
|
|
|
|
4.42
|
|
|
12/05/17
|
Kirk Johnson
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
-
|
|
|
|
$6.31
|
|
|
01/12/14
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
3.38
|
|
|
06/25/14
|
|
|
|
13,406
|
|
|
|
3,094
|
|
|
|
3.14
|
|
|
07/01/15
|
|
|
|
105,416
|
|
|
|
9,584
|
|
|
|
5.06
|
|
|
02/22/16
|
|
|
|
40,833
|
|
|
|
29,167
|
|
|
|
5.50
|
|
|
01/03/17
|
|
|
|
29,381
|
|
|
|
58,760
|
|
|
|
4.42
|
|
|
12/05/17
|
M. Christina Thomson (7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
$47.63
|
|
|
02/07/10
|
|
|
|
18,333
|
|
|
|
-
|
|
|
|
14.63
|
|
|
03/09/11
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
8.53
|
|
|
07/02/12
|
|
|
|
12,500
|
|
|
|
-
|
|
|
|
3.53
|
|
|
07/11/13
|
|
|
|
92,000
|
|
|
|
-
|
|
|
|
3.38
|
|
|
06/25/14
|
|
|
|
8,406
|
|
|
|
3,094
|
|
|
|
3.14
|
|
|
07/01/15
|
|
|
|
105,416
|
|
|
|
9,584
|
|
|
|
5.06
|
|
|
02/22/16
|
|
|
|
37,917
|
|
|
|
27,083
|
|
|
|
5.50
|
|
|
01/03/17
|
|
|
|
22,968
|
|
|
|
45,935
|
|
|
|
4.42
|
|
|
12/05/17
|
28
____________________
(1)
|
|
All option awards were
granted on a date 10-years prior to the expiration date, with option
awards that were granted prior to February 22, 2006 vesting in 16 equal
quarterly installments from the date of grant and option awards granted on
or after February 22, 2006 vesting in 12 equal quarterly installments from
the date of grant.
|
|
(2)
|
|
Option exercise price
subtotals represent the weighted average of all outstanding equity awards
including both exercisable and unexercisable.
|
|
(3)
|
|
In the aggregate,
these options are to purchase 878,824 shares of our common stock at a
weighted average exercise price of $9.37 per share.
|
|
(4)
|
|
In the aggregate,
these options are to purchase 356,678 shares of our common stock at a
weighted average exercise price of $6.14 per share.
|
|
(5)
|
|
In the aggregate,
these options are to purchase 418,845 shares of our common stock at a
weighted average exercise price of $4.18 per share.
|
|
(6)
|
|
In the aggregate,
these options are to purchase 409,641 shares of our common stock at a
weighted average exercise price of $4.93 per share.
|
|
(7)
|
|
In the aggregate,
these options are to purchase 413,236 shares of our common stock at a
weighted average exercise price of $7.12 per
share.
|
O
PTION
E
XERCISES AND
S
TOCK
V
ESTED
There were
no option exercises or stock vested to the Named Executive Officers for the
fiscal year ended December 31, 2008.
29
P
OTENTIAL
P
AYMENTS
U
PON
T
ERMINATION OR
C
HANGE IN
C
ONTROL
Avigen
initially adopted its Transition Plan (Transition Plan) in July 1998. In May
2005, Avigens Board, upon the recommendation of the Compensation Committee of
the Board, amended the Transition Plan to retain key employees and enable
executive officers to represent stockholder interests during periods involving a
possible change in control. The Transition Plan is designed to protect the
earned benefits of key employees, including executive officers, against adverse
changes that may result from a change in control of Avigen. In October 2008, the
Board amended the Transition Plan to comply with certain changes in federal tax
regulations that were required to be made before December 31, 2008 and to
provide each participant with severance benefits in the event she or he was
terminated other than for cause or was constructively terminated. At that time,
the Compensation Committee took the opportunity to assess whether the benefits
included in the Transition Plan were comparable to such plans in companies
similar to Avigen and determined to add an additional three months of severance
benefits for each executive officer.
An employee
of Avigen becomes a participant in the Transition Plan only if Avigen delivers
to that employee a Transition Plan Eligibility Notice, in which case the
employee becomes a Participant in the Transition Plan. Each of Dr. Chahine,
Mr. Coffee, Ms. Thomson, Dr. Johnson, and Mr. Sauter is a participant in the
Transition Plan.
A Participant in the Transition Plan
will receive, if the Participants employment with Avigen terminates due to an
involuntary termination or a constructive termination, as those terms are
defined in the Transition Plan, the following benefits:
|
(a)
|
|
salary continuation
for the number of months designated in the Transition Plan Eligibility
Notice given to the Participant;
|
|
|
|
(b)
|
|
accelerated stock
option vesting and extended exercisability as provided in the Transition
Plan Eligibility Notice given to the Participant; and
|
|
|
|
(c)
|
|
Avigen will pay the
COBRA premiums for the Participant for the number of months designated in
the Transition Plan Eligibility Notice given to the Participant, up to 18
months, or until such earlier date as the Participant becomes covered by a
health plan of a subsequent employer.
|
The current named executive officers
of Avigen who are Participants, and the terms of their participation, are:
|
|
|
Option
|
|
|
Salary
|
Option
|
Extended
|
COBRA
|
Name/Position
|
Continuation
|
Acceleration
|
Exercisability
|
Payments
|
Kenneth G. Chahine,
J.D., Ph.D.
|
21
months
|
Full
|
2 years
|
18
months
|
Andrew A.
Sauter
|
15
months
|
Full
|
2 years
|
15
months
|
Michael D.
Coffee
|
15
months
|
Full
|
2 years
|
15
months
|
Kirk Johnson,
Ph.D.
|
15
months
|
Full
|
2 years
|
15
months
|
M. Christina
Thomson, J.D.
|
15
months
|
Full
|
2 years
|
15
months
|
If an
involuntary termination or a constructive termination of a Participant
occurred on December 31, 2008, that Participant would have received the
following benefits:
|
|
Salary
|
|
COBRA
|
Name
|
|
Continuation
|
|
Payments
|
Kenneth Chahine
|
|
$775,689
|
|
$28,881
|
Andrew
Sauter
|
|
$334,914
|
|
$24,464
|
Michael Coffee
|
|
$392,379
|
|
$26,752
|
Kirk
Johnson
|
|
$348,160
|
|
$26,752
|
M. Christina Thomson
|
|
$334,914
|
|
$18,295
|
30
An
involuntary termination is the dismissal or discharge by Avigen other than for
cause, where cause is defined to include: commission of an intentional act to
materially injure Avigen; intentional refusal or failure to follow lawful and
reasonable directions of the Board or the appropriate individual to whom the
participant reports; willfully and habitually neglected duties for Avigen; or
conviction of a felony involving moral turpitude that is likely to inflict or
has inflicted material injury on Avigen. The termination of a Participants
employment will not be deemed to be an involuntary termination if the
termination occurs as a result of that Participants death or
disability.
A
constructive termination occurs when a Participant voluntarily terminates
employment with Avigen in the event that, without the participants consent, any
of specified events occur, including: the assignment of duties or
responsibilities which result in a diminution in position or function; a
reduction by Avigen in annual base salary; failure by Avigen to continue in
effect any benefit plan or program or the taking of any action by Avigen that
would adversely affect participation in or reduce benefits under the benefit
plans or deprive the participant of any fringe benefit enjoyed at the time of a
change in control; relocation by Avigen, or the relocation of Avigens principal
executive offices if the participants principal office is at such offices, to a
location more than thirty (30) miles from the location at which the participant
was performing duties prior to the change in control; a material breach of the
Transition Plan or a material breach of a written agreement with the participant
regarding the terms and conditions of employment; or any failure by Avigen to
obtain the assumption of the Transition Plan or any material agreement with the
participant regarding the terms and conditions of employment by any successor or
assign of Avigen.
No amounts are attributable to
vesting of stock options, as the exercise price of all stock options was in
excess of the closing price of our common stock on December 31, 2008.
E
QUITY
I
NCENTIVE
P
LANS
In the event
of a dissolution or liquidation of Avigen, the Board of Directors may accelerate
vesting on some or all of the outstanding Stock Awards, as defined in Avigens
2006 Equity Incentive Plan (the Plan), so that such Stock Awards become fully
vested, exercisable and/or no longer subject to repurchase or forfeiture (to the
extent such Stock Awards have not previously expired or terminated) before the
dissolution or liquidation is completed but contingent on its completion.
In the event of a Corporate
Transaction, as defined in the Plan, in which the surviving corporation or
acquiring corporation (or its parent company) does not assume or continue
outstanding stock awards or substitute similar stock awards for such outstanding
stock awards, the vesting of such stock awards shall (contingent upon the
effectiveness of the Corporate Transaction) be accelerated in full to a date
prior to the effective time of such Corporate Transaction as the Board shall
determine. The table above states the value of this accelerated vesting as if
the Corporate Transaction occurred on December 31, 2008 and the stock options
held by our named executive officers were not assumed, substituted or continued.
D
IRECTOR
C
OMPENSATION
Compensation of Directors
Effective
January 1, 2006, each of Avigens non-employee directors receives an annual
retainer of $28,000. Any non-employee director who serves as Chairman of
Avigens Board of Directors receives, in addition to regular payments for
service rendered as a member of the Board of Directors, an additional annual
retainer of $28,000. Dr. Zola Horovitz is currently designated as Chairman of
the Board of Directors. Any non-employee director who serves as the Lead
Independent Director of Avigens Board of Directors receives, in addition to
regular payments for service rendered as a member of the Board of Directors, an
additional annual retainer of $14,000 to be paid in equal quarterly
installments. Dr. John K. A. Prendergast is currently designated as the Lead
Independent Director. There are no additional fees for attendance at Board of
Directors or committee meetings; however, Avigen reimburses members of the Board
of Directors for their expenses incurred in connection with attendance at Board
and committee meetings in accordance with Avigens policy. In the fiscal year
ended December 31, 2008, the total compensation paid to non-employee directors
was $193,667.
31
Each of
Avigens non-employee directors is qualified to receive stock option grants
under Avigens 2006 Equity Incentive Stock Option Plan. The Board of Directors
has determined that non-employee directors of Avigen, not serving as Chairman,
will be granted options to purchase 20,000 shares of Avigens common stock at
each annual meeting of Avigens stockholders if such non-employee director has
served for the entire preceding year. An option to purchase a prorated number of
shares is granted to each non-employee director who has served for less than the
full preceding year. In addition, each director who is elected for the first
time to be a non-employee director of Avigen will be granted an option to
purchase 30,000 shares upon the date of initial election to the Board of
Directors whether by the Board of Directors or stockholders of Avigen.
The Board of
Directors has also determined that any non-employee director that serves as
Chairman of Avigens Board of Directors will be granted options to purchase
40,000 shares of Avigens common stock at each annual meeting of Avigens
stockholders.
The
following table shows for the fiscal year ended December 31, 2008 certain
information with respect to the compensation of all non-employee directors of
Avigen:
D
IRECTOR
C
OMPENSATION
F
OR
F
ISCAL
2008
|
|
Fees Earned or
|
|
Option
|
|
|
|
|
Paid in Cash
|
|
Awards ($)
|
|
|
Name
|
|
($)
|
|
(2)(3)(4)
|
|
Total ($)
|
Zola Horovitz, Ph.D.
|
|
|
$56,000
|
|
|
|
$110,301
|
|
|
$166,301
|
Stephen Dilly,
M.B.B.S., Ph.D.
|
|
|
28,000
|
|
|
|
45,570
|
|
|
73,570
|
Yuichi Iwaki M.D., Ph.D. (1)
|
|
|
11,667
|
|
|
|
85,412
|
|
|
97,079
|
Jan Öhrström,
M.D.
|
|
|
28,000
|
|
|
|
45,570
|
|
|
73,570
|
John Prendergast, Ph.D.
|
|
|
42,000
|
|
|
|
47,501
|
|
|
89,501
|
Richard
Wallace
|
|
|
28,000
|
|
|
|
63,302
|
|
|
91,302
|
____________________
(1)
|
|
Includes $47,356
attributable to an extension of the exercise period for Dr. Iwakis
options.
|
|
(2)
|
|
The amounts shown in
this column represent the dollar amounts recognized for financial
statement reporting purposes for the fiscal year ended December 31, 2008
in accordance with FAS 123(R), excluding an estimate of forfeitures
related to service-based vesting conditions, and thus include amounts from
awards granted in and prior to 2008. Assumptions used in the calculation
of these amounts are described in the notes to Avigens audited financial
statements for the fiscal year ended December 31, 2008, which will be
included in Avigens Annual Report on Form 10-K expected to be filed with
the SEC on or about March 16, 2009. All grants were made subject to
individual award agreements, the form of which was previously filed with
the SEC.
|
|
(3)
|
|
The following options
were outstanding as of December 31, 2008: Z. Horovitz: 222,500; S. Dilly:
56,667; Y. Iwaki: 115,000; J. Öhrström: 56,667; J. Prendergast: 142,500;
and R. Wallace: 75,000.
|
|
(4)
|
|
The following table
sets forth each grant of options to Avigens non-employee directors during
2008 under the 2006 Plan, together with the exercise price per share and
grant fair value of each award computed in accordance with FAS 123(R)
using the Black-Scholes model.
|
|
|
Options
|
|
|
|
|
|
|
|
Grant
Date
|
|
|
Granted
|
|
|
|
Exercise
|
|
Fair
Value
|
|
|
in
|
|
Grant
|
|
Price Per
|
|
of
Option
|
Non-employee Director
|
|
2008 (#)
|
|
Date
|
|
Share ($)
|
|
Award ($)
|
Zola Horovitz, Ph.D.
|
|
40,000
|
|
05/19/08
|
|
|
$2.96
|
|
|
62,660
|
Stephen G.
Dilly, M.B.B.S., Ph.D.
|
|
20,000
|
|
05/19/08
|
|
|
2.96
|
|
|
31,330
|
Jan K. Öhrström, M.D.
|
|
20,000
|
|
05/19/08
|
|
|
2.96
|
|
|
31,330
|
John K. A.
Prendergast, Ph.D.
|
|
20,000
|
|
05/19/08
|
|
|
2.96
|
|
|
31,330
|
Richard Wallace
|
|
20,000
|
|
05/19/08
|
|
|
2.96
|
|
|
31,330
|
32
HOUSEHOLDING OF PROXY
MATERIALS
The SEC has
adopted rules that permit companies and intermediaries (e.g., brokers) to
satisfy the delivery requirements for proxy statements and annual reports with
respect to two or more stockholders sharing the same address by delivering a
single proxy statement addressed to those stockholders. This process, which is
commonly referred to as householding, potentially means extra convenience for
stockholders and cost savings for companies.
A single
proxy statement may be delivered to multiple stockholders sharing an address
unless contrary instructions have been received from the affected stockholders.
Once you have received notice from your broker that it will be householding
communications to your address, householding will continue until you are
notified otherwise or until you notify your broker or Avigen that you no longer
wish to participate in householding. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate proxy
statement and annual report in the future you may (1) notify your broker, (2)
direct your written request to: Investor Relations, Avigen, Inc., 1301 Harbor
Bay Parkway, Alameda, California 94502, or (3) contact our Chief Financial
Officer, Andrew Sauter, at (510) 748-7150. Stockholders who currently receive
multiple copies of the proxy statement at their address and would like to
request householding of their communications should contact their broker. In
addition, Avigen will promptly deliver, upon written or oral request to the
address or telephone number above, a separate copy of the annual report and
proxy statement to a stockholder at a shared address to which a single copy of
the documents was delivered.
A copy of
Avigens Annual Report to the Securities and Exchange Commission on Form 10-K
for the fiscal ended December 31, 2008 will be available after March 16, 2009
without charge upon written request to: Investor Relations, Avigen, Inc., 1301
Harbor Bay Parkway, Alameda, California 94502.
OTHER MATTERS
The Board of
Directors knows of no other matters that will be presented for consideration at
the Special Meeting of Stockholders, and the Avigen Bylaws provide that only
matters specified in the notice of the Special Meeting may properly be brought
before the Special Meeting. If any other matters are properly brought before the
Special Meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
Sincerely,
M.
C
HRISTINA
T
HOMSON
Vice President, General Counsel and Secretary
[DATE], 2009
33
YOUR VOTE IS IMPORTANT
Please take a moment now to vote your
shares of Avigen, Inc.
Common Stock for the upcoming Special Meeting of
Stockholders.
PLEASE REVIEW THE PROXY STATEMENT
AND VOTE TODAY IN ONE OF THREE WAYS:
1.
|
|
Vote by
Telephone
Please call toll-free
in the U.S. or Canada at
1-xxx-xxx-xxxx
, on a touch-tone
telephone
.
If outside the U.S. or Canada, call
1-xxx-xxx-xxxx
. Please follow
the simple instructions. You will be required to provide the unique
control number printed below.
|
|
OR
|
|
2.
|
|
Vote by Internet
Please access
https://www._________________
, and follow the simple instructions. Please note you must type an
s after http. You will be required to provide the unique control number
printed below.
|
You may vote by telephone or
Internet 24 hours a day, 7 days a week.
Your telephone or Internet vote authorizes the named proxies to
vote your shares in the same manner
as if you had marked, signed and
returned a WHITE proxy card.
|
OR
3.
|
|
Vote by Mail
If you do not wish to vote by telephone
or over the Internet, please complete, sign, date and return the WHITE
proxy card in the envelope provided, or mail to: Avigen, Inc., c/o
Innisfree M&A Incorporated, FDR Station, P.O. Box 5155, New York, NY
10150-5155
|
6
TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE AND SIGN,
DATE AND RETURN IN THE ENVELOPE PROVIDED
6
|
|
AVIGEN,
INC.
|
|
AVIGENS BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THE BOARD REMOVAL
PROPOSAL, AND TAKES NO POSITION WITH RESPECT TO THE BYLAW AMENDMENT
PROPOSAL OR THE REPEAL BYLAWS PROPOSAL. PLEASE SIGN, DATE AND MAIL THIS
WHITE PROXY CARD TODAY.
|
|
BOARD REMOVAL
PROPOSAL:
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
To remove all of the
current directors serving on Avigens Board of Directors, without
cause.
|
|
o
|
|
o
|
|
o
|
|
BYLAW AMENDMENT
PROPOSAL:
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
To amend Avigens
Amended and Restated Bylaws (Bylaws) to permit stockholders to elect
directors to the Board in cases when the entire board is vacant.
|
|
o
|
|
o
|
|
o
|
|
REPEAL BYLAWS
PROPOSAL:
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
To repeal any provision
of the Bylaws that was effected since January 8, 2009.
|
|
o
|
|
o
|
|
o
|
THIS PROXY WILL NOT BE VOTED ON THE
ELECTION PROPOSAL.
These items of business are more fully
described in the Proxy Statement accompanying this proxy card.
|
Date
|
|
Signature
|
|
Signature
(if jointly held)
|
|
Title(s)
|
|
Please sign exactly as your
name appears hereon. If the stock is registered in the names of two or
more persons, each should sign. Executors, administrators, trustees,
guardians and attorneys-in-fact should add their titles. If signer is a
corporation, please give full corporate name and have a duly authorized
officer sign, stating title. If signer is a partnership, please sign in
partnership name by authorized
person.
|
Please sign, date and promptly
return this proxy card in the enclosed postage-paid envelope.
PLEASE VOTE TODAY!
SEE REVERSE SIDE FOR THREE EASY WAYS TO
VOTE.
|
6
TO VOTE BY
MAIL PLEASE DETACH PROXY CARD HERE AND SIGN, DATE AND RETURN IN THE
ENVELOPE PROVIDED
6
|
|
|
|
|
AVIGEN, INC. PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING
OF
STOCKHOLDERS TO BE HELD ON ______________, 2009
The undersigned hereby appoints
KENNETH G. CHAHINE and M. CHRISTINA THOMSON, and each of them, as
attorneys and proxies of the undersigned, with full power of substitution,
to vote any or all of the shares of stock of Avigen, Inc. which the
undersigned may be entitled to vote at the Special Meeting of Stockholders
of Avigen, Inc. to be held at _____________, on [DAY], _____________, 2009
at [TIME] (local time), and at any and all postponements, continuations
and adjournments thereof, with all powers that the undersigned would
possess if personally present, upon and in respect of the matters listed
on the reverse side and in accordance with the instructions designated on
the reverse side, with discretionary authority as to any and all other
matters that may properly come before the Special Meeting.
If no direction is made on the
Board Removal Proposal, your shares will be voted AGAINST such proposal.
If no direction is made on the Bylaw Amendment Proposal or the Repeal
Bylaws Proposal, your shares will be voted ABSTAIN with respect to such
proposal.
THE UNDERSIGNED, A HOLDER OF SHARES OF COMMON STOCK, PAR VALUE
$0.001 PER SHARE, OF AVIGEN, INC. (THE COMMON STOCK), ACTING WITH
RESPECT TO ALL OF THE SHARES OF COMMON STOCK HELD BY THE
UNDERSIGNED,
HEREBY REVOKES ALL PROXIES PREVIOUSLY GIVEN BY THE UNDERSIGNED TO
VOTE AT THE SPECIAL MEETING OF
STOCKHOLDERS OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
|
(continued and to be signed on the
reverse)
Avigen (MM) (NASDAQ:AVGN)
Historical Stock Chart
From Sep 2024 to Oct 2024
Avigen (MM) (NASDAQ:AVGN)
Historical Stock Chart
From Oct 2023 to Oct 2024