UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.__)
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under § 240.14a-12
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ONYX PHARMACEUTICALS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee
was paid previously. Identify the previous filing
by registration statement number, or the Form or
Schedule and the date of its filing.
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1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
249 East Grand
Avenue
South San Francisco, CA 94080
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 26, 2011
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Onyx Pharmaceuticals, Inc., a Delaware
corporation (also referred to as “we,” “us,”
“Onyx,” and the “Company”). The meeting will
be held on Thursday, May 26, 2011 at 10:00 a.m., local
time, at the San Francisco Airport Marriott located at 1800
Old Bayshore Highway, Burlingame, California 94010 for the
following purposes:
1. To elect our three nominees for director to hold office
until the 2014 Annual Meeting of Stockholders.
2. To approve an amendment to the Company’s
Certificate of Incorporation to increase the number of
authorized shares of common stock from 100,000,000 to
200,000,000 shares.
3. To approve, on an advisory basis, the compensation of
the Company’s named executive officers, as disclosed in
this proxy statement.
4. To indicate, on an advisory basis, the preferred
frequency of stockholder advisory votes on the compensation of
the Company’s named executive officers.
5. To ratify the selection by the Audit Committee of the
Board of Directors of Ernst & Young LLP as our
independent registered public accounting firm for the fiscal
year ending December 31, 2011.
6. To conduct any other business properly brought before
the meeting.
These items of business are more fully described in the proxy
statement accompanying this Notice.
The record date for the Annual Meeting is March 28, 2011.
Only stockholders of record at the close of business on that
date may vote at the meeting or any adjournment thereof.
Important
Notice Regarding the Availability of Proxy Materials for the
Stockholders’ Meeting to Be Held at 10:00 a.m., local
time, on Thursday, May 26, 2011 at the San Francisco
Airport Marriott located
at 1800
Old Bayshore Highway, Burlingame, California 94010
The proxy
statement and annual report to stockholders are available
at
https://materials.proxyvote.com/683399.
The Board
of Directors recommends that you vote FOR the proposals
identified above.
By Order of the Board of Directors
Robert L. Jones
Secretary
South San Francisco, California
April , 2011
You are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, please vote as
promptly as possible in order to ensure your representation at
the meeting. You may vote your shares via a toll-free telephone
number or the Internet, by following the instructions on the
proxy card. You may also submit your proxy card for the Annual
Meeting by completing, signing, dating and returning your proxy
card in the pre-addressed envelope provided. Even if you have
voted by proxy, you may still vote in person if you attend the
meeting. Please note, however, that if your shares are held of
record by a broker, bank or other nominee and you wish to vote
at the meeting, you must obtain a proxy issued in your name from
that record holder.
TABLE OF
CONTENTS
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ONYX
PHARMACEUTICALS, INC.
249 East Grand Avenue
South San Francisco, CA 94080
PROXY
STATEMENT
FOR THE 2011 ANNUAL MEETING OF STOCKHOLDERS
May 26,
2011
INFORMATION
CONCERNING SOLICITATION AND VOTING
Our Board of Directors is soliciting proxies for our 2011 Annual
Meeting of Stockholders to be held on Thursday, May 26,
2011 at 10:00 a.m. local time at the San Francisco
Airport Marriott located at 1800 Old Bayshore Highway,
Burlingame, California 94010. Our principal executive offices
are located at 249 East Grand Avenue, South
San Francisco, CA 94080, and our telephone number is
(650) 266-0000.
The proxy materials, including this proxy statement, proxy card
or voting instruction card and our 2010 Annual Report, are being
distributed and made available on or about April 12, 2011.
This proxy statement contains important information for you to
consider when deciding how to vote on the matters brought before
the meeting. Please read it carefully.
In accordance with rules and regulations adopted by the
U.S. Securities and Exchange Commission (the
“SEC”), we have elected to provide our stockholders
access to our proxy materials over the Internet. Accordingly, a
Notice of Internet Availability of Proxy Materials (the
“Notice”) will be mailed on or about April 12,
2011 to most stockholders who owned our common stock at the
close of business on March 28, 2011. Stockholders will have
the ability to access the proxy materials on a website referred
to in the Notice or request a printed set of the proxy materials
be sent to them by following the instructions in the Notice.
The Notice will also provide instructions on how you can elect
to receive future proxy materials electronically or in printed
form by mail. If you choose to receive future proxy materials
electronically, you will receive an email next year with
instructions containing a link to the proxy materials and a link
to the proxy voting site. Your election to receive proxy
materials electronically or in printed form by mail will remain
in effect until you terminate such election.
Choosing to receive future proxy materials electronically will
allow us to provide you with the information you need in a
timelier manner, will save us the cost of printing and mailing
documents to you and will conserve natural resources.
QUESTIONS
AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why did I
receive a Notice regarding the Internet availability of proxy
materials this year instead of a full set of proxy
materials?
We have sent a Notice of Internet Availability of Proxy
Materials to most of our stockholders of record and beneficial
owners. Instructions on how to access the proxy materials over
the Internet or to request a paper copy may be found in the
Notice. In addition, you may request to receive future proxy
materials in printed form by mail or electronically. Your
election to receive future proxy materials by mail or
electronically will remain in effect until you terminate such
election.
Why did I
receive a full set of proxy materials instead of a Notice
regarding the Internet availability of proxy
materials?
We are providing paper copies of the proxy materials to
stockholders who have previously requested to receive them. If
you would like to reduce the environmental impact and the costs
incurred by us in mailing proxy materials, you may elect to
receive all future proxy materials electronically via email or
the Internet. To sign up for electronic delivery, please follow
the instructions provided with your proxy materials and on your
proxy card or voting instruction card, to vote using the
Internet and, when prompted, indicate that you agree to receive
or access future stockholder communications electronically.
Alternatively, you can go to
https://materials.proxyvote.com/683399
and enroll for
online delivery of annual meeting and proxy voting materials.
How can I
access the proxy materials over the Internet?
You may view and also download our proxy materials, including
the 2010 Annual Report, our 2010
Form 10-K
and the Notice on our website at
www.onyx-pharm.com
as
well as
https://materials.proxyvote.com/683399.
How can I
vote my proxy over the Internet or by telephone?
Please refer to the proxy card for instructions on, and access
information for, voting by telephone or over the Internet.
Who can
vote at the Annual Meeting?
Only stockholders of record at the close of business on
March 28, 2011 will be entitled to vote at the Annual
Meeting. On this record date, there were 63,080,240 shares
of common stock outstanding and entitled to vote.
Stockholder
of Record: Shares Registered in Your Name
If on March 28, 2011 your shares were registered directly
in your name with our transfer agent, Wells Fargo Bank, N.A.,
then you are a stockholder of record. As a stockholder of
record, you may vote in person at the meeting or vote by proxy.
Whether or not you plan to attend the meeting, we recommend that
you vote by proxy to ensure your vote is counted if you later
decide not to attend the meeting.
Beneficial
Owner: Shares Registered in the Name of a Broker or
Bank
If on March 28, 2011 your shares were held, not in your
name, but rather in an account at a brokerage firm, bank,
dealer, or other similar organization, then you are the
beneficial owner of shares held in “street name” and
these proxy materials are being forwarded to you by that
organization. The organization holding your account is
considered to be the stockholder of record for purposes of
voting at the Annual Meeting. As a beneficial owner, you have
the right to direct your broker or other agent on how to vote
the shares in your account and you should follow such
organization’s instructions on how to do so. You are also
invited to attend the Annual Meeting. However, since you are not
the stockholder of record, you may not vote your shares in
person at the meeting unless you request and obtain a valid
proxy from your broker or other agent.
What am I
voting on?
There are five matters scheduled for a vote:
1. Election of our three nominees for director to hold
office until the 2014 Annual Meeting of Stockholders;
2. To approve an amendment to the Company’s
Certificate of Incorporation to increase the number of
authorized shares of common stock from 100,000,000 to
200,000,000 shares;
3. Advisory approval of the compensation of the
Company’s named executive officers, as disclosed in this
proxy statement in accordance with SEC rules;
4. Advisory indication of the preferred frequency of
stockholder advisory votes on the compensation of the
Company’s named executive officers; and
5. Ratification of the selection of Ernst & Young
LLP as our independent registered public accounting firm for the
fiscal year ending December 31, 2011.
How do I
vote?
You may either vote “For” all the nominees to the
Board of Directors or you may “Withhold” your vote for
any nominee you specify. With regard to your advisory vote on
how frequently we should solicit stockholder advisory approval
of executive compensation, you may vote for any one of the
following: one year, two years or three years,
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or you may abstain from voting on that matter. For each of the
other matters to be voted on, you may vote “For” or
“Against” or abstain from voting. The procedures for
voting are:
Stockholder
of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at
the Annual Meeting, by mail, by telephone or over the Internet.
Whether or not you plan to attend the meeting, we urge you to
vote by proxy to ensure your vote is counted. You may still
attend the meeting and vote in person if you have already voted
by proxy. Voting in person will revoke your proxy. There are
four ways to vote:
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To vote in person, come to the Annual Meeting and we will give
you a ballot when you arrive.
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To vote using the proxy card, complete, sign and date the
enclosed proxy card and return it promptly in the envelope
provided. If you return your signed proxy card to us before the
Annual Meeting, we will vote your shares as you direct.
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To vote by telephone, call the toll-free telephone number on the
proxy card and follow the recorded instructions. You will need
to have the control number that appears on your proxy card
available when voting.
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To vote over the Internet, access Onyx’s secure website
registration page through the Internet, as described on the
proxy card, and follow the instructions. You will need to have
the control number that appears on your proxy card available
when voting.
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Please note that the Internet and telephone voting facilities
for registered stockholders will close at 11:59 p.m., EDT,
on May 25, 2011.
Beneficial
Owner: Shares Registered in the Name of Broker or
Bank
If you are a beneficial owner of shares registered in the name
of your broker, bank, or other agent, you should have received a
proxy card and voting instructions with these proxy materials
from that organization rather than from us. Complete and mail
the proxy card to ensure that your vote is counted.
Alternatively, you may vote by telephone or over the internet,
as instructed by your broker or bank. To vote in person at the
Annual Meeting, you must obtain a valid proxy from your broker,
bank or other agent. Follow the instructions from your broker or
bank included with these proxy materials or contact your broker
or bank to request a proxy form.
Can I
vote my shares by filling out and returning the
Notice?
No. The Notice will, however, provide instructions on how to
vote by Internet, by telephone, by requesting and returning a
paper proxy card or voting instruction card or by submitting a
ballot in person at the meeting.
How many
votes do I have?
On each matter to be voted upon, you have one vote for each
share of common stock you own as of March 28, 2011.
What if I
return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any
voting selections, your shares will be voted “For” the
election of the three nominees for director; “For”
approval of the amendment to the Company’s Certificate of
Incorporation to increase the authorized number of shares of
common stock from 100,000,000 to 200,000,000; “For”
the advisory approval of executive compensation; “For”
one year as the preferred frequency of advisory votes to approve
executive compensation; and “For” ratification of the
selection of Ernst & Young LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2011. If any other matter is properly
presented at the meeting, your proxy (one of the individuals
named on your proxy card) will vote your shares using his or her
best judgment.
3
Who is
paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In
addition to mailing the proxy materials, our directors and
employees may also solicit proxies in person, by telephone, or
by other means of communication. Directors and employees will
not be paid any additional compensation for soliciting proxies.
We will also reimburse brokerage firms, banks and other agents
for the cost of forwarding proxy materials to beneficial owners.
What does
it mean if I receive more than one proxy card?
You may receive more than one proxy card if your shares are
registered in more than one name or are registered in different
accounts. Please complete, sign and return each proxy card to
ensure that all of your shares are voted.
Can I
change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote
at the meeting. If you are the record holder of your shares, you
may revoke your proxy in any one of three ways:
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You may submit another properly completed proxy vote by mail,
telephone or Internet with a later date.
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You may send a written notice that you are revoking your proxy
to our Secretary at 249 East Grand Avenue, South
San Francisco, CA 94080
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You may attend the Annual Meeting and vote in person. Simply
attending the meeting will not, by itself, revoke your proxy.
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If your shares are held by your broker or bank as a nominee or
agent, you should follow the instructions provided by your
broker or bank.
When are
stockholder proposals due for next year’s annual
meeting?
To be considered for inclusion in next year’s proxy
materials, your proposal must be submitted in writing by
December 14, 2011 to our Corporate Secretary at
249 East Grand Avenue, South San Francisco, CA 94080.
If you wish to nominate a director or submit a proposal that is
not to be included in next year’s proxy materials, the
proposal must be received by the Company between
February 26, 2012 and March 27, 2012. You are also
advised to review our Bylaws, which contain additional
requirements about advance notice of stockholder proposals and
director nominations.
How are
votes counted?
Votes will be counted by the inspector of election appointed for
the meeting, who will separately count for the proposal to elect
directors, votes “For,” “Withhold” and
broker non-votes; with respect to the proposal regarding
frequency of stockholder advisory votes to approve executive
compensation, votes for frequencies of one year, two years or
three years, abstentions and broker non-votes; and, with respect
to other proposals, votes “For” and
“Against,” abstentions and, if applicable, broker
non-votes. Abstentions will be counted towards the vote total
for each proposal, and will have the same effect as
“Against” votes. Broker non-votes have no effect and
will not be counted towards the vote total for any proposal
except Proposal 2. For Proposal 2, broker non-votes
will have the same effect as “Against” votes.
If your shares are held by your broker as your nominee (that is,
in “street name”), you will need to obtain a proxy
form from the institution that holds your shares and follow the
instructions included on that form regarding how to instruct
your broker to vote your shares. If you do not give instructions
to your broker, your broker can vote your shares with respect to
“discretionary” items, but not with respect to
“non-discretionary” items. Discretionary items are
proposals considered routine under the rules of the New York
Stock Exchange (“NYSE”) on which your broker may vote
shares held in street name in the absence of your voting
instructions. Non-discretionary items are matters that may
substantially affect the rights or privileges of stockholders,
such as mergers, stockholder proposals, elections of directors
(even if not contested) and, for the first time, under a new
amendment to the NYSE rules, executive compensation, including
the advisory stockholder votes on executive compensation and on
the frequency
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of stockholder votes on executive compensation. On
non-discretionary items for which you do not give your broker
instructions, the shares will be treated as broker non-votes.
How many
votes are needed to approve each proposal?
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For the election of our three nominees for Class III
directors, the three nominees receiving the most “For”
votes (among votes properly cast in person or by proxy) will be
elected. Only votes “For” or “Withhold” will
affect the outcome.
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To be approved, Proposal 2, the amendment to the
Company’s Certificate of Incorporation to increase the
authorized number of shares of common stock from 100,000,000 to
200,000,000, must receive “For” votes from the
holders, either in person or by proxy, of a majority of the
outstanding shares. If you do not vote or if you
“Abstain” from voting, it will have the same effect as
an “Against” vote. Broker non-votes will have the same
effect as “Against” votes.
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To be approved, Proposal 3, the advisory approval of the
compensation of the Company’s named executive officers,
must receive “For” votes from the holders of a
majority of shares either present in person or represented by
proxy and entitled to vote. Failure to submit a proxy card or
vote at the Annual Meeting, or an abstention vote or a broker
non-vote will have no effect on the outcome of Proposal 3.
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For Proposal No. 4, the advisory vote on the frequency
of stockholder advisory votes on executive compensation, the
frequency receiving the votes of the holders of a majority of
shares present in person or represented by proxy and entitled to
vote at the annual meeting will be considered the frequency
preferred by the stockholders. Failure to submit a proxy card or
vote at the Annual Meeting, or an abstention vote or a broker
non-vote will have no effect on the outcome of Proposal 4.
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To be approved, Proposal 5, ratification of the selection
of Ernst & Young LLP as our independent registered
public accounting firm for the fiscal year ending
December 31, 2011, must receive a “For” vote from
the majority of votes cast either in person or by proxy. Failure
to submit a proxy card or vote at the Annual Meeting, or an
abstention vote withheld or a broker non-vote will have no
effect on the outcome of Proposal 5.
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What is
the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A
quorum will be present if at least a majority of the outstanding
shares are represented by stockholders present at the meeting or
by proxy. On the record date, there were 63,080,240 outstanding
and entitled to vote. Thus, 31,540,121 must be represented by
stockholders present at the meeting or by proxy to have a quorum.
Your shares will be counted towards the quorum only if you
submit a valid proxy (or one is submitted on your behalf by your
broker, bank or other nominee) or if you vote in person at the
meeting. Abstentions and broker non-votes will be counted
towards the quorum requirement. If there is no quorum, a
majority of the votes present at the meeting may adjourn the
meeting to another date.
How can I
find out the results of the voting at the Annual
Meeting?
Preliminary voting results will be announced at the Annual
Meeting. Final voting results will be published in a current
report on
Form 8-K
that we expect to file within four business days after the
Annual Meeting. If final voting results are not available to us
in time to file a current report on
Form 8-K
within four business days after the Annual Meeting, we intend to
file a current report on
Form 8-K
to publish preliminary results and, within four business days
after the final results are known to us, file an additional
current report on
Form 8-K
to publish the final results.
5
PROPOSAL 1
ELECTION
OF DIRECTORS
Our Amended and Restated Certificate of Incorporation and our
Bylaws provide that the Board of Directors shall be divided into
three classes: Class I, Class II and Class III,
with each class having a three-year term. Vacancies on the Board
may be filled only by persons elected by a majority of the
remaining directors. A director elected by the Board to fill a
vacancy (including a vacancy created by an increase in the
number of directors) serves for the remainder of the full term
of the class of directors to which he or she was elected and
until that director’s successor is elected and qualified.
The Board of Directors typically schedules a board meeting on
the day of the annual meeting of stockholders and it is our
policy to invite current directors and nominees to attend the
Annual Meeting. All of the current directors, with the exception
of William R. Ringo, attended the 2010 Annual Meeting of
Stockholders.
The Board of Directors is presently composed of eight members.
There are three directors in Class III, each of whose term
of office expires in 2011. Each of the nominees for election to
Class III, N. Anthony Coles, M.D., Magnus Lundberg and
William R. Ringo, is currently a member of our Board of
Directors. Dr. Coles and Mr. Lundberg were elected by
the stockholders at the 2008 Annual Meeting. Mr. Ringo was
appointed as a director effective February 3, 2011 by the
Board to fill a newly created vacancy. If re-elected at the 2011
Annual Meeting, the nominees would serve until the 2014 Annual
Meeting and until that director’s successor is elected and
has qualified, or until that director’s earlier death,
resignation or removal.
Directors are elected by a plurality of the votes of the holders
of shares present in person or represented by proxy and entitled
to vote at the meeting. The three nominees receiving the highest
number of affirmative votes will be elected. Shares represented
by executed proxies will be voted, if authority to do so is not
withheld, for the election of the nominees named below. In the
event that any of the nominees should be unavailable for
election as a result of an unexpected occurrence, shares
represented by executed proxies will be voted for the election
of a substitute nominee proposed by management. Dr. Coles,
Mr. Lundberg and Mr. Ringo have each agreed to serve,
if elected, and management has no reason to believe that any of
them will be unable to serve.
The Nominating and Governance Committee seeks to assemble a
Board that, as a whole, possesses the appropriate balance of
professional and industry knowledge, financial expertise and
management experience necessary to oversee and direct the
Company’s business. To that end, the Committee has
evaluated the Board’s current members in the broader
context of the Board’s overall composition. The Committee
maintains a goal of recruiting members who complement and
strengthen the skills of other members and who also exhibit
integrity, collegiality, sound business judgment and other
qualities that the Committee views as critical to effective
functioning of the Board.
The brief biographies below include information, as of the date
of this proxy statement, regarding the specific and particular
experience, qualifications, attributes or skills of each nominee
for director that led the Committee to believe that such nominee
should continue to serve on the Board. In addition, following
the biographies of the nominees are the biographies of
Class I and Class II directors containing information
as to why the Committee believes that such director should
continue serving on the Board.
Nominees
For Election For A Three Year Term Expiring At The 2014 Annual
Meeting — Class III
N. Anthony Coles
,
M.D.
, age 50, was
appointed President, Chief Executive Officer and a Director,
effective March 31, 2008. From May 2006 to March 17,
2008, Dr. Coles was President, Chief Executive Officer, and
a member of the Board of Directors of NPS Pharmaceuticals, Inc.,
a biotechnology company focused on the discovery and development
of novel therapeutics. From November 2005 to May 2006,
Dr. Coles was President, Chief Operating Officer and a
member of the Board of Directors of NPS Pharmaceuticals. From
2002 until October 2005, Dr. Coles was Senior Vice
President of Commercial Operations at Vertex Pharmaceuticals
Incorporated. Beginning in 1996, Dr. Coles held a number of
executive positions while at Bristol-Myers Squibb Company,
including Senior Vice President of Strategy and Policy; Senior
Vice President of Marketing and Medical Affairs,
Neuroscience/Infectious Diseases/Dermatology; Vice President,
Western Area Sales Cardiovascular and Metabolic Business Unit
for U.S. primary care; and Vice President, Cardiovascular
Global Marketing. From 1992 until 1996, Dr. Coles served in
various positions at Merck & Co., Inc., most recently
as Vice President of the Hypertension and Heart
6
Failure Business Group. Dr. Coles earned his M.D. from Duke
University, his master’s degree in public health from
Harvard College and his undergraduate degree from Johns Hopkins
University. Dr. Coles currently serves as a trustee and
member of the Executive Committee for the Johns Hopkins
University Board of Trustees, as well as a member of the board
of trustees for Johns Hopkins Medicine. Dr. Coles is also a
member of the board of directors for Laboratory Corporation of
America (LabCorp), as well as Campus Crest Communities, Inc.,
both NYSE traded companies. He is also a member of the board of
the Biotechnology Industry Organization (BIO). In his leadership
positions at several public companies, Dr. Coles has
managed pharmaceutical product pipelines, overseen launches of
numerous pharmaceutical products, and has built commercial
organizations. In addition, he has been responsible for
strategic planning and corporate development at several public
biotechnology and biopharmaceutical companies. We believe
Dr. Coles’ dual role as an executive officer and
director of Onyx gives him unique insights into the
day-to-day
operations of the Company, a practical understanding of the
issues and opportunities that face the Company, and its
strategic planning, commercial growth, and strategic
transactions.
Magnus Lundberg
, age 54, has served as a Director
since June 2000. Since April 2004, Mr. Lundberg has served
as President and Chief Executive Officer of Phadia AB, a
privately held diagnostic company, and formerly a division of
Pfizer Inc, a pharmaceutical company. From March 1999 to April
2004, Mr. Lundberg served as President and Chief Executive
Officer of Phadia AB, while it was a division of Pfizer. From
September 1996 to March 1999, Mr. Lundberg served as
President of both Chiron Therapeutics and Chiron Vaccines, each
a division of Chiron Corporation, a biotechnology company. From
1981 to 1996, Mr. Lundberg held various management
positions at Pharmacia Corporation, a pharmaceutical company
acquired by Pfizer in 2003. Mr. Lundberg holds an M.Sc. in
Biology and Biochemistry from Abo Akademi in Turku, Finland.
Mr. Lundberg has served in leadership positions in several
international companies, which we believe qualifies him, among
other things, to provide valuable input to and oversight of the
Company’s global activities. He has experience managing
companies to profitability and sustained growth and has overseen
strategies for developing and balancing product pipelines.
Mr. Lundberg’s education and experience satisfy the
financial literacy requirements of NASDAQ applicable to Audit
Committee members.
William R. Ringo
, age 65, was appointed as a
Director effective February 3, 2011. Mr. Ringo
currently serves as Executive Partner at Sofinnova Ventures and
Senior Advisor to Barclays Capital. From April 2008 until his
retirement in April 2010, Mr. Ringo served as Senior Vice
President of Strategy and Business Development for Pfizer. From
August 2004 to April 2006, Mr. Ringo served as the
President and Chief Executive Officer of Abgenix, a
biotechnology firm focused on developing human antibodies to
treat cancer that was acquired by Amgen in April 2006.
Mr. Ringo began his career at Eli Lilly & Company
in 1973 and during his
28-year
tenure he held a number of senior positions, including Product
Group President for Oncology and Critical Care, President of
Internal Medicine Products, President of the Infectious Diseases
Business Unit and Vice President of Sales and Marketing for
U.S. Pharmaceuticals. He retired from Lilly in 2001.
Mr. Ringo has over 35 years of experience in the
pharmaceutical, biotechnology and financial industries.
Mr. Ringo holds a bachelor’s degree and masters in
business administration from the University of Dayton. He is
currently chairman of Sangamo Biosciences and serves as a
director on the Alvine Pharmaceuticals, Inc. and BioCrossroads
boards. We believe that Mr. Ringo’s experience in
growing oncology businesses will enable him to advise the
Company in its development and commercialization of oncology
products. In his leadership positions with pharmaceutical
companies, Mr. Ringo has been responsible for creating and
implementing strategies for launching products and growing
markets. We believe that his experience qualifies him to guide
the Company’s strategies and operational decisions related
to its commercial efforts, including its planned launch of
carfilzomib. Mr. Ringo’s education and experience
satisfy the financial literacy requirements of NASDAQ applicable
to Audit Committee members.
THE BOARD
OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH OF OUR NOMINEES FOR DIRECTOR
Directors
Continuing In Office Until The 2012 Annual Meeting —
Class I
Paul Goddard, Ph.D.
, age 61, has served as a
Director since February 1997 and is currently the Lead Director
of the Company. Dr. Goddard has served as Chief Executive
Officer since April 2005 and Chairman of the Board of Directors
since August 2003 of ARYx Therapeutics, Inc. From August 1998 to
March 2000, Dr. Goddard served as
7
President and Chief Executive Officer of Elan Pharmaceuticals,
Inc., a biotechnology company and a division of Elan plc. From
1991 to 1998, Dr. Goddard served as Chief Executive Officer
and Chairman of the Board of Neurex Corporation, a biotechnology
company, until Neurex Corporation was acquired by Elan
Corporation plc. Dr. Goddard also serves on the Boards of
Directors of Adolor Corporation and A.P. Pharma, Inc., where he
is also Chairman of the Board. He completed his Ph.D. in the
area of Etiology and Pathophysiology of colon cancer at
St. Mary’s Hospital, University of London.
Dr. Goddard has extensive knowledge of and experience in
the pharmaceutical industry. We believe his service as an
executive at numerous publicly traded healthcare companies
qualifies him to provide oversight to the Company’s
strategic plans, commercial growth, strategic transactions and
global expansion and to provide insights into Onyx’s
industry and regulatory environment. Dr. Goddard’s
substantial experience in executive compensation matters,
developed in his tenures as chief executive officer, is
especially valuable as the Chairman of the Compensation
Committee.
Antonio J. Grillo-López, M.D.
, age 71, has
served as a Director since September 2002. From November 1992 to
January 2001, Dr. Grillo-López served as Chief Medical
Officer of IDEC Pharmaceuticals Corporation and from January
2001 to November 2003 held the position of Chief Medical Officer
Emeritus of IDEC Pharmaceuticals Corporation.
Dr. Grillo-López has been a consultant to the
U.S. National Cancer Institute and has served on the
Oncologic Drugs Advisory Committee of the FDA. He currently
serves on the Board of Trustees of the Hope Funds for Cancer
Research. Dr. Grillo-López holds a B.S. and an M.D.
from the University of Puerto Rico. We believe that, by virtue
of his medical degree and industry experience,
Dr. Grillo-López is well qualified to provide guidance
and oversight to the Company’s clinical and regulatory
strategies and to its portfolio management. The Nominating and
Governance Committee also believes he is well qualified to
advise the Company regarding evaluation of product candidates in
potential strategic transactions.
Wendell Wierenga, Ph.D.
, age 63, has served as
a Director since December 1996. Since January 2007,
Dr. Wierenga has served as Executive Vice President of
Research and Development of Ambit Biosciences Corporation, a
biopharmaceutical company. From September 2003 to December 2006,
Dr. Wierenga served as Executive Vice President, Research
and Development of Neurocrine Biosciences, Inc., a biotechnology
company. From June 2003 to June 2006, Dr. Wierenga served
on the Board of Directors of Ciphergen Biosciences (now
Vermillion, Inc.). From September 2000 to August 2003,
Dr. Wierenga served as the Chief Executive Officer of
Syrrx, Inc., a biotechnology company. From February 1999 to
August 2000, Dr. Wierenga served as Senior Vice President,
Worldwide Pharmaceutical Sciences, Technologies and Development
for the Parke-Davis Pharmaceutical Research division of
Warner-Lambert Company, a subsidiary of Pfizer Inc, and from
1990 to 1999 as Senior Vice President of Research of
Parke-Davis. Dr. Wierenga served as Vice President of
Medtech Ventures of Warner-Lambert, an investment fund, from
1992 to 2000. Dr. Wierenga also serves on the Board of
Directors of Cytokinetics, Inc. and XenoPort, Inc.
Dr. Wierenga holds a B.A. from Hope College and a Ph.D. in
chemistry from Stanford University. We believe
Dr. Wierenga’s scientific training and experience
qualify him to provide oversight of the Company’s clinical-
stage product candidates, and clinical and regulatory
strategies. The Committee further believes he is well-qualified
to provide the Company with guidance regarding its early stage
pipeline and managing research and development investment
decisions.
Directors
Continuing In Office Until The 2013 Annual Meeting —
Class II
Corinne H. Nevinny
, age 51, has served as a Director
since October 2005. Ms. Nevinny is currently General
Partner of LMNVC LLC, a privately held venture firm. From
September 2009 to August 2010, she has served as President,
Global Operations, and General Manager, Cardiac Surgery Systems
and Vascular, at Edwards Lifesciences Corporation, a leading
cardiovascular technology company. Prior to assuming her current
position, she was President of Global Operations from December
2005 until September 2009. Ms. Nevinny served as Corporate
Vice President, Chief Financial Officer and Treasurer of Edwards
Lifesciences Corporation from March 2003 until December 2005.
From 1998 until 2003, Ms. Nevinny was Vice President and
Chief Financial Officer of Tularik, Inc, a biotechnology
company. From 1996 until 1998, Ms. Nevinny was Executive
Director for the health care group at Warburg Dillon Read LLC,
an investment bank. Ms. Nevinny also serves on the Board of
Directors of Neurocrine Biosciences, Inc., a biopharmaceutical
company. Ms. Nevinny received her undergraduate degree from
Stanford University and her M.B.A. from Harvard Business School.
We believe her leadership positions with publicly traded
healthcare companies qualify her to provide insight and guidance
for a wide variety of the Company’s activities, including
its financial and commercial strategies, global sales of the
Company’s products and strategic transactions.
8
Her education and experience qualify Ms. Nevinny to serve
as an “audit committee financial expert” (as that term
is defined in Item 407(d)(5) of
Regulation S-K)
and to provide oversight of the Company’s financial
strategies.
Thomas G. Wiggans
, age 59, has served as a Director
since March 2005. From August 2008 to September 2009, until
Peplin, Inc. was acquired by LEO Pharma of Copenhagen, Denmark,
Mr. Wiggans served as Chairman of the Board of Directors
and Chief Executive Officer of Peplin, Inc., a biotechnology
company. Prior to that, Mr. Wiggans served as Chief
Executive Officer of Connetics Corporation, a biotechnology
company, from 1994 until December 2006, and as Chairman of the
Board from January 2006, until December 2006, when Connetics
Corporation was acquired by Stiefel Laboratories. From 1992 to
1994, Mr. Wiggans served as President and Chief Operating
Officer of CytoTherapeutics, a biotechnology company. From 1980
to 1992, Mr. Wiggans served in various positions at
Ares-Serono Group, a pharmaceutical company, including President
of its U.S. pharmaceutical operations and Managing Director
of its U.K. pharmaceutical operations. Mr. Wiggans
currently serves as a Director of Sangamo Biosciences and
Somaxon Pharmaceuticals, as well as two private companies, one
of which, Excaliard Pharmaceuticals, he is the non-executive
Chairman. He also serves on the Board of Trustees of the
University of Kansas Endowment Association. In addition, he is
Chairman of the Biotechnology Institute, a non-profit
educational organization. Mr. Wiggans holds a B.S. in
Pharmacy from the University of Kansas and an M.B.A. from
Southern Methodist University. Mr. Wiggans has extensive
knowledge of the biotechnology industry. He has served in
leadership positions with biotechnology companies during key
growth periods and has developed and launched multiple
pharmaceutical products. We believe his experience qualifies
him, among other things, to provide oversight of the
Company’s strategies for developing markets and growing
revenues. By virtue of his education and experience he satisfies
the financial literacy requirements of The NASDAQ Stock Market,
L.L.C. (“NASDAQ”) applicable to Audit Committee
members.
INFORMATION
REGARDING THE BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE
Corporate
Governance
Onyx has adopted Corporate Governance Guidelines (the
“Guidelines”) that outline, among other matters, the
role of the Board and the responsibilities of various Board
committees. These Guidelines are available, along with other
important corporate governance materials, on our website at
http://www.onyx-pharm.com/wt/page/corp_gov;
however, information found on our website is not incorporated by
reference into this proxy statement. The Guidelines assure that
the Board will have the necessary authority and practices in
place to review and evaluate the Company’s business
operations as needed and to make decisions that are independent
of the Company’s management. The Guidelines are also
intended to align the interests of directors and management with
those of the Company’s stockholders. The Guidelines set
forth the practices the Board intends to follow with respect to
board composition and selection, board meetings and involvement
of senior management, Chief Executive Officer performance
evaluation and succession planning, and board committees and
compensation.
The Guidelines specifically require, among other things, that:
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A majority of the directors must be independent.
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The Board appoints all members of the Board committees.
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The Audit, Compensation and Nominating and Governance Committees
are composed entirely of independent directors.
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The independent directors meet in executive session at least
twice a year.
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The Guidelines were adopted and are periodically reviewed by the
Board to, among other things, maintain and ensure compliance
with legal and regulatory requirements, including applicable
NASDAQ listing standards and rules, as well as, evolving
corporate governance best practices.
Independence
Of The Board Of Directors
As required under the NASDAQ listing standards, a majority of
the members of a listed company’s board of directors must
qualify as “independent,” as affirmatively determined
by the listed company’s board of directors. Our
9
Board consults with our counsel to ensure that the Board’s
determinations are consistent with all relevant securities and
other laws and regulations regarding the definition of
“independent,” including those set forth in applicable
listing standards of NASDAQ, as in effect from time to time.
Consistent with these considerations, after review of all
relevant transactions and relationships between each director,
or any of his or her family members, and us, our senior
management and our independent registered public accounting
firm, if any, the Board has affirmatively determined that none
of our directors or nominees for director have a material or
other disqualifying relationship with the Company and all of our
directors are independent directors within the meaning of the
applicable NASDAQ listing standards, except for Dr. Coles,
our President and Chief Executive Officer.
As required under applicable NASDAQ listing standards, in fiscal
year 2010 our independent directors met a total of three times
in regularly scheduled executive sessions at which only
independent directors were present. Our Board committees also
met regularly in executive sessions at which only independent
directors were present. Persons interested in communicating with
our independent directors regarding specific concerns or issues
may address correspondence to a particular director or to the
independent directors generally, in care of: Onyx
Pharmaceuticals, Inc., 249 East Grand Avenue, South
San Francisco, CA 94080. If no particular director is
named, letters will be forwarded, depending on the subject
matter, to the Chair of the Audit, Compensation, or Nominating
and Governance Committee.
Board
Leadership Structure
Dr. Goddard serves as our Board of Directors’ lead
independent director. Currently, meetings of the Board are
generally chaired by the lead independent director or, at his
request, Dr. Coles, the Company’s President and Chief
Executive and also a member of the Board. The position of
chairperson of the Board is currently vacant.
The Board appointed Dr. Goddard as the lead independent
director to reinforce the independence of the Board as a whole
for purposes of calling and conducting meetings of the Board.
The Company believes that the lead independent director helps
ensure the effective independent functioning of the Board in its
oversight responsibilities. The lead independent director is
empowered to, among other things, preside over Board meetings at
which the chairperson is not present, including, if applicable,
executive sessions of the independent directors, serve as a
liaison between the Chief Executive Officer
and/or
chairperson, approve information to be sent to the Board, if
requested to do so by the Board, approve proposed meeting
agendas and schedules and call meetings of the Board
and/or
independent directors.
While the Board does not currently have a chairperson, the
Company has not adopted any policy regarding the
chairperson’s independence, and would consider appointing
either an independent or non-independent director as
chairperson, depending on what the Board determined to be in the
best interests of the Company and its stockholders. The Company
believes that having the President and Chief Executive Officer
serve also as a director helps to ensure that the Board and
management act with a common purpose, and that Dr. Coles
helps to act as a bridge between management and the Board,
facilitating the regular flow of information and providing the
Board with valuable insight into the
day-to-day
operations of the Company. For similar reasons, the Company does
not preclude that the President and Chief Executive could
additionally serve as chairperson of the Board. Combining the
positions of Chief Executive Officer and Board chairperson could
also offer the advantage of providing a single, clear chain of
command to execute the Company’s strategic initiatives and
business plans. In appropriate circumstances, the Board would
also consider appointing an independent director as chairperson
of the Board, which may have the advantage of creating an
environment that is more conducive to objective evaluation and
oversight of management’s performance, increasing
management accountability and improving the ability of the Board
to monitor whether management’s actions are in the best
interests of the Company and its stockholders. The Company also
believes that regardless of the chairperson’s independence,
it may be advantageous to have a Board chairperson who has
history with and knowledge of the Company.
10
Information
Regarding The Board Of Directors And Its Committees
During the fiscal year ended December 31, 2010 our Board of
Directors held ten meetings. The Board has three standing
committees: an Audit Committee, a Compensation Committee and a
Nominating and Governance Committee. The following table
provides membership and meeting information for fiscal year
ended December 31, 2010 for each of the Board committees:
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Nominating and
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Name
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Audit
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Compensation
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Governance
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N. Anthony Coles, M.D.
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Paul Goddard, Ph.D.(1)
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X
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*
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X
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Antonio Grillo-López, M.D.
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X
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Magnus Lundberg
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X
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Corinne H. Nevinny
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X
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*
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William Ringo(1)
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Wendell Wierenga, Ph.D.
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X
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Thomas G. Wiggans(1)
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X
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X
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Total meetings in fiscal year 2010
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7
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7
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2
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Committee Chairperson
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(1)
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Mr. Ringo was appointed as a director by the Board,
effective February 3, 2011, to fill a newly created vacancy
and will also replace Mr. Wiggans on the Audit Committee
and Dr. Goddard on the Nominating and Governance Committee.
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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 listing requirements regarding
“independence” and that each member is free of any
relationship that would interfere with his or her individual
exercise of independent judgment in his or her service as a
member of our Board and the committees on which he or she serves.
Audit
Committee
The Audit Committee meets with our independent registered public
accounting firm at least quarterly to review the financial
results of the fiscal quarters and the annual audit and discuss
the financial statements; determines and approves the engagement
of the independent registered public accounting firm; determines
whether to retain or terminate the existing independent
registered public accounting firm or to appoint and engage a new
independent registered public accounting firm; reviews and
approves the retention of the independent registered public
accounting firm to perform any proposed permissible non-audit
services; monitors the rotation of partners of the independent
registered public accounting firm on our audit engagement team
as required by law; confers with management and the independent
registered public accounting firm regarding the effectiveness of
internal controls over financial reporting; establishes
procedures, as required under applicable law, for the receipt,
retention and treatment of complaints received by us 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 the financial statements to be included in our quarterly
reports on
Form 10-Q
and Annual Report on
Form 10-K;
evaluates the independent registered public accounting
firm’s performance; receives and considers the independent
registered public accounting firm’s comments as to scope,
adequacy and effectiveness of financial reporting controls; and
reviews the results of management’s efforts to monitor
compliance with the Company’s programs and policies
designed to ensure adherence to applicable laws and rules and
the Company’s code of conduct, including reviewing and
approving related-party transactions.
11
The Audit Committee has adopted a written Audit Committee
Charter that has been approved by the Board of Directors. Our
Audit Committee Charter can be found on our corporate website at
http://www.onyx-pharm.com/file.cfm/53/docs/audit_comm_charter.pdf;
however, information found on our website is not incorporated by
reference into this proxy statement.
The Board of Directors annually reviews the NASDAQ listing
standards definition of independence for Audit Committee members
and has determined that all members of our Audit Committee are
independent (as independence is currently defined in
Rule 5605(c)(2)(A)(i) of the NASDAQ listing standards). The
Board of Directors has determined that Ms. Nevinny
qualifies as an “audit committee financial expert,” as
defined in applicable SEC rules. The Board made a qualitative
assessment of Ms. Nevinny’s level of knowledge and
experience based on a number of factors, including her formal
education and experience overseeing or assessing the performance
of companies or public accountants with respect to the
preparation, auditing or evaluation of financial statements.
Compensation
Committee
The Compensation Committee reviews and approves our overall
compensation and benefits strategy, policies, plans and
programs. The Compensation Committee reviews and approves
corporate performance goals and objectives relevant to the
compensation of our executive officers and other senior
management; recommends to the Board for approval the
compensation and other terms of employment of our Chief
Executive Officer; reviews and approves the compensation and
other terms of employment of executive officers and other senior
management, if necessary; and administers our equity incentive
and purchase plans. The Compensation Committee also reviews with
management the Company’s Compensation Discussion and
Analysis and considers whether to recommend that it be included
in proxy statements and other filings.
Our Compensation Committee Charter can be found on our corporate
website at
http://www.onyx-pharm.com/file.cfm/53/docs/comp_comm_charter.pdf;
however, information found on our website is not incorporated by
reference into this proxy statement. All members of our
Compensation Committee are independent (as independence is
currently defined in Rule 5605(a)(2) of the NASDAQ listing
standards).
Our Compensation Committee Charter requires the Committee to
meet a minimum of two times per year. However, historically the
Committee has met with greater frequency. Executive sessions are
regularly held at the Compensation Committee meetings. The
agenda for each meeting is usually developed by the Chair of the
Compensation Committee, in consultation with management. From
time to time, various members of management and other employees
as well as outside advisors or consultants 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. Our Chief
Executive Officer may not participate in or be present during
any deliberations or determinations of the Compensation
Committee regarding his compensation. The Compensation Committee
Charter grants the Compensation Committee full access to all
books, records, facilities and personnel of the Company, as well
as authority to obtain, at the expense of the Company, 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
consultant’s reasonable fees and other retention terms.
In 2010, the Compensation Committee engaged Radford, an AON
Hewitt Consulting Company specializing in the technology and
life sciences industries. The Compensation Committee requested
that Radford:
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evaluate the efficacy of the Company’s existing
compensation strategy and practices in supporting and
reinforcing the Company’s long-term strategic
goals; and
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assist in refining the Company’s compensation strategy and
in developing and implementing an executive compensation program
to execute that strategy, including executive compensation,
equity compensation, and board compensation.
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As part of its engagement, Radford was requested by the
Compensation Committee to develop a comparative group of
companies and to perform analyses of competitive performance and
compensation levels for that group. At the request of the
Compensation Committee, Radford also worked with certain of our
management to better assess
12
the Company’s business operations and strategy, key
performance metrics and strategic goals, as well as the labor
markets in which the Company competes. Radford developed
recommendations that were presented to the Compensation
Committee for its consideration. Following an active dialogue,
the Compensation Committee approved the recommendations made by
Radford for executives other than the Chief Executive Officer,
and recommended that the Board approve the recommendations for
the Chief Executive Officer. Such recommendations are discussed
in the Compensation Discussion and Analysis section of this
proxy statement.
Under its Charter, the Compensation Committee may form, and
delegate authority to, subcommittees and to management, as
appropriate. The Compensation Committee has granted to certain
authorized delegates, the Company’s Chief Executive
Officer, Chief Financial Officer and the Senior Vice President,
Global Human Resources, the authority to grant stock options to
non-executive officer employees and consultants within certain
specific guidelines approved by the Compensation Committee, and
certain other limitations, without any further action required
by the Compensation Committee. In 2007, the Compensation
Committee’s delegated authority to grant restricted stock
awards to non-executive officer employees and consultants was
further delegated to the Company’s Chief Executive Officer
within certain specific guidelines approved by the Compensation
Committee, and certain other limitations, without any further
action required by the Compensation Committee. The purpose of
these delegations of authority is to enhance the flexibility of
option and stock administration within the Company and to
facilitate the timely grant of options and restricted stock
awards to employees, particularly new employees. All stock
option and restricted stock awards granted by the authorized
delegates must comply with the terms and conditions of our 2005
Equity Incentive Plan and must be within specified limits
approved by the Compensation Committee. In particular, the
authorized delegates may not grant options or restricted stock
awards to himself or herself, or grant options or restricted
stock awards to any employee to acquire more than an aggregate
of 100,000 shares per year or any consultant to acquire
more than 10,000 shares per year individually, or
40,000 shares to consultants as a group, without
Compensation Committee approval.
Historically, the Compensation Committee has made adjustments to
annual compensation, determined bonus and equity awards and
established performance objectives at one or more meetings held
during the first quarter of the year. However, the Compensation
Committee also considers matters related to individual
compensation, such as the evaluation of the Company’s
performance of corporate objectives and individual
executive’s performance of certain individual goals, as
well as high-level strategic issues, such as the efficacy of the
Company’s compensation strategy, potential modifications to
that strategy and new trends, plans or approaches to
compensation, at various meetings throughout the year.
Generally, the Compensation Committee’s process comprises
two related elements: the determination of compensation levels
and the establishment of performance objectives for the current
year. For executives other than the Chief Executive Officer, the
Compensation Committee solicits and considers evaluations and
recommendations submitted to the Committee by the Chief
Executive Officer. In the case of the Chief Executive Officer,
the evaluation of performance is conducted by the Compensation
Committee, which recommends any adjustments to compensation, as
well as awards to be granted, to the Board for approval. For all
executives and directors, as part of its deliberations, the
Compensation Committee may review and consider, as appropriate,
materials such as financial reports and projections, operational
data, tax and accounting information, tally sheets that set
forth the total compensation that may become payable to
executives in various hypothetical scenarios, executive and
director stock ownership information, company stock performance
data, analyses of historical executive compensation levels and
current company-wide compensation levels, and recommendations of
the Compensation Committee’s compensation consultant,
including analyses of executive and director compensation paid
at other companies identified by the consultant.
The specific determinations of the Compensation Committee with
respect to executive compensation for fiscal year 2010 are
described in greater detail in the Compensation Discussion and
Analysis section of this proxy statement.
Nominating
And Governance Committee
The Nominating and Governance Committee of the Board of
Directors is responsible for identifying, reviewing and
evaluating candidates to serve as our directors (consistent with
criteria approved by the Board), reviewing and evaluating
incumbent directors, recommending incumbent directors to the
Board for reelection to the Board, recommending to the Board for
selection candidates for election to the Board, making
recommendations to the Board regarding the membership of the
committees of the Board, assessing the performance of the Board
and developing a set of corporate governance principles. Our
Nominating and Governance Committee charter can be
13
found on our corporate website at
http://www.onyx-pharm.com/file.cfm/53/docs/Nominating_charter.pdf
;
however, information found on our website is not incorporated by
reference into this proxy statement. All members of the
Nominating and Governance Committee are independent (as
independence is currently defined in Rule 5605(a)(2) of the
NASDAQ listing standards).
The Nominating and Governance Committee believes that candidates
for director should have certain minimum qualifications,
including being able to read and understand basic financial
statements, having the highest personal integrity and ethics,
possessing relevant expertise, having sufficient time, having
the ability to exercise sound business judgment and having the
commitment to rigorously represent the long-term interests of
our stockholders. The Nominating and Governance Committee
retains the right to modify these qualifications from time to
time. Candidates for director nominees, including incumbent
directors and candidates for vacancies on the Board, are
reviewed in the context of the current composition of the Board,
our strategic goals, operating requirements and the long-term
interests of stockholders. In conducting this assessment, the
Nominating and Governance Committee considers diversity, age,
skills and any other factors as it deems appropriate given our
current needs and the current needs of the Board, to maintain a
balance of knowledge, experience and capability. While we do not
have a formal diversity policy for selecting Board members, our
Nominating and Governance Committee believes it is important
that the members of our Board collectively bring the experiences
and skills appropriate to effectively carry out the Board of
Directors’ responsibilities both as our business exists
today and as we plan to develop an organization capable of
changing the way cancer is treated. We broadly construe
diversity to mean a variety of opinions, perspectives and
backgrounds, such as gender, race and ethnicity differences, as
well as other differentiating characteristics, all in the
context of the requirements and needs of our Board at that point
in time. In the case of incumbent directors whose terms of
office are set to expire, the Nominating and Governance
Committee also reviews the directors’ overall service to us
during their term, including the number of meetings attended,
level of participation, quality of performance, and any other
relationships and transactions that might impair the
directors’ independence. In the case of new director
candidates, the Nominating and Governance Committee also
determines 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. In the case of candidates for
vacancies on the Board, the Nominating and Governance Committee
uses its and the Board of Directors’ network of contacts to
compile a list of potential candidates, but may also engage, if
it deems appropriate, a professional search firm. The Nominating
and Governance Committee conducts any appropriate and necessary
inquiries into the backgrounds and qualifications of possible
candidates after considering the function and needs of the
Board. The Nominating and Governance Committee meets to discuss
and consider the candidates’ qualifications and then
selects a nominee for recommendation to the Board by majority
vote. To date, the Nominating and Governance Committee has not
paid a fee to any third party to assist in the process of
identifying or evaluating director candidates. To date, the
Nominating and Governance Committee has not rejected a timely
director nominee from a stockholder or stockholders holding more
than 5 percent of our voting stock.
The Nominating and Governance Committee will consider director
candidates recommended by stockholders. The Nominating and
Governance Committee does not intend to alter the manner in
which it evaluates candidates, including the minimum criteria
set forth above, based on whether the candidate was recommended
by a stockholder or not. Stockholders who wish to recommend
individuals for consideration by the Nominating and Governance
Committee to become nominees for election to the Board and for
inclusion in the proxy statement may do so by delivering a
written recommendation to the Nominating and Governance
Committee at the following address: 249 East Grand Avenue,
South San Francisco, CA 94080 at least 120 days prior
to the anniversary date of the mailing of our proxy statement
for the prior year’s annual meeting of stockholders.
Submissions must include the full name of the proposed nominee,
a description of the proposed nominee’s business experience
for at least the previous five years, complete biographical
information, a description of the proposed nominee’s
qualifications as a director and a representation that the
nominating stockholder is a beneficial or record owner of our
stock. Any submission must be accompanied by the written consent
of the proposed nominee to be named as a nominee and to serve as
a director if elected.
14
Role
Of The Board In Risk Oversight
One of the Board’s key functions is informed oversight of
the Company’s various processes for managing risk. The
Board administers this oversight function directly through the
Board as a whole, as well as through the Board’s standing
committees that address risks associated with their respective
areas of oversight. In particular, our Board is responsible for
monitoring and assessing risk exposure in the Company’s
strategic plans, development programs, corporate goals and
operating plans, including a determination of the nature and
level of risk appropriate for the Company. Our Audit Committee
has the responsibility to consider and discuss our major
exposures to financial risk and the steps our management takes
to monitor and control these exposures, including guidelines,
policies and processes. The Audit Committee meets periodically
with our Chief Compliance Officer and also monitors the
Company’s compliance with various legal and regulatory
requirements, our whistleblower system, in addition to oversight
of the performance of our audit function. Our Nominating and
Governance Committee monitors the effectiveness of our corporate
governance guidelines and policies, as well as, the Board’s
self-assessment of its own effectiveness. Our Compensation
Committee assesses and monitors whether any of our compensation
policies and programs has the potential to encourage excessive
risk-taking. It is the responsibility of the committee chairs to
report findings regarding material risk exposures to the Board
as quickly as possible. In addition, the Board meets with
certain members of our executive team, including the heads of
our business, compliance and legal functions, who discuss the
risks and exposures involved in their respective areas of
responsibility as well as any developments that could impact our
risk profile or other aspects of our business.
Meetings
Of The Board Of Directors
The Board of Directors met ten times during the fiscal year
ended December 31, 2010. All directors attended at least
75 percent of the aggregate of the meetings of the Board of
Directors and of the committees on which they served, held
during the period for which they were a director or committee
member.
Stockholder
Communications With The Board Of Directors
We have not adopted a formal process for stockholder
communications with the Board. However, every effort has been
made to ensure that the views of stockholders are heard by the
Board or individual directors, as applicable, and that
appropriate responses are provided to stockholders in a timely
manner. We believe our responsiveness to stockholder
communications to the Board has been excellent. Our stockholders
may direct communications to a particular director or to the
independent directors generally, to the attention of Investor
Relations, in care of: Onyx Pharmaceuticals, Inc.,
249 East Grand Avenue, South San Francisco, CA
94080.
Code
Of Conduct
We have a Code of Conduct that applies to all officers,
directors and employees. The Code of Conduct is available on our
website at
http://www.onyx-pharm.com/wt/page/code_conduct
;
however, information found on our website is not incorporated by
reference into this proxy statement. If we make any substantive
amendments to the Code of Conduct or grant any waiver from a
provision of the Code of Conduct to any executive officer or
director, we will promptly disclose the nature of the amendment
or waiver on our website.
COMPENSATION
OF DIRECTORS
During the fiscal year ended December 31, 2010, each of our
non-employee directors received an annual retainer of $30,000
and the non-employee lead director received an annual retainer
of $55,000. In addition, the chair of each of the Audit,
Compensation and Nominating and Governance Committees received
an additional annual retainer of $24,000, $15,000 and $10,000,
respectively, and each committee member (other than committee
chairs) of each of the Audit, Compensation and Nominating and
Governance Committees received an additional annual retainer of
$12,000, $7,500 and $5,000, respectively. Each director also
received $2,500 for attending each Board of Directors meeting in
person or telephonically. In addition, each director receives an
additional $1,500 for attending each Board of Directors meeting
in person or telephonically above 10 meetings per year. Each
director on the Audit, Compensation and Nominating and
Governance Committees receives an additional $1,500 for
attending each Audit, Compensation and Nominating and Governance
Committees in person or telephonically above 10, 8 and 6
15
meetings, respectively, per year. For the fiscal year ended
December 31, 2010, the total cash compensation paid to
non-employee directors was $445,500. The members of the Board of
Directors are also eligible for reimbursement for their expenses
incurred in connection with attendance at Board meetings.
Effective January 1, 2010, the Board of Directors cash
compensation and equity awards were increased.
The 2005 Equity Incentive Plan provides that each new member of
our Board will be granted an option to purchase
20,000 shares of our common stock on the date of his or her
initial election to the Board and, through December 31,
2008, an automatic, non-discretionary option grant to purchase
10,000 shares of our common stock on the anniversary of
each non-employee director’s initial grant, if the
non-employee director is continuing to serve as a director on
such anniversary date. The initial option grants vest as to 25%
of the shares underlying the award on the first anniversary of
the grant date and in equal monthly installments thereafter over
the next three years. The annual option grants vest fully on the
first anniversary of the grant date.
At subsequent Annual Meeting of Stockholders, the stockholders
approved an amendment to our 2005 Equity Incentive Plan that
restructured the non-discretionary grant program providing for
the automatic grants of stock awards to non-employee Board
members over their period of service on the Board as follows:
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beginning in 2010, on the last business day of March each year,
continuing non-employee directors received an option to purchase
5,000 shares of common stock and a restricted stock award
covering 2,000 shares of common stock, with such numbers of
shares reduced
pro rata
if such non-employee Board member
has served on the Board for less than one year, and on
May 26, 2010, each non-employee director received an
additional restricted stock award covering 1,000 shares of
common stock; and
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beginning in 2011, on the last business day of March each year,
continuing non-employee directors will receive an option to
purchase 5,000 shares of common stock and a restricted
stock award covering 3,000 shares of common stock, with
such numbers of shares reduced
pro rata
if such
non-employee Board member has served on the Board for less than
one year;
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During fiscal year 2010, we granted options to purchase an
aggregate of 30,000 shares of common stock at an exercise
price per share of $30.28 and aggregate restricted stock award
covering 18,000 shares of common stock to our non-employee
directors pursuant to the 2005 Equity Incentive Plan at an
average grant date market price per share of $27.47.
The following table provides information regarding compensation
of non-employee directors who served during the fiscal year
ended December 31, 2010.
Director
Compensation
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Fees Earned or Paid
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Option
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Stock
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Name
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in Cash ($)
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Awards ($)(1)
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Awards ($)(1)
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Total ($)
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Paul Goddard, Ph.D.
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$
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100,000
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$
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69,541
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$
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82,410
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$
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251,951
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Antonio J. Grilló-Lopez, M.D.
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57,500
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69,541
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82,410
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209,451
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Magnus Lundberg
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62,000
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69,541
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82,410
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213,951
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Corinne H. Nevinny
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79,000
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69,541
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82,410
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230,951
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William R. Ringo(2)
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—
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—
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—
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—
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Wendell Wierenga, Ph.D.
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72,500
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69,541
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82,410
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224,451
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Thomas G. Wiggans
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74,500
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69,541
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82,410
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226,451
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(1)
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Amounts shown do not reflect compensation actually received by
the directors. Instead, the amounts shown are the grant date
fair values as determined pursuant to Accounting Standards
Codification (“ASC”) Topic 718 for option and stock
awards granted in fiscal year 2010. The assumptions used to
calculate the value of option awards are set forth under
Note 15 of the Notes to the Financial Statements included
in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010, as filed with
the SEC on February 23, 2011.
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(2)
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William R. Ringo was appointed as a director effective
February 3, 2011 by the Board of Directors to fill a newly
created vacancy.
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16
PROPOSAL 2
APPROVAL
OF AN INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON
STOCK
The Board of Directors is requesting stockholder approval of an
amendment to the Company’s Amended and Restated Certificate
of Incorporation (“Restated Certificate”) to increase
the number of Company’s authorized shares of common stock
from 100,000,000 shares to 200,000,000 shares.
The additional common stock to be authorized by adoption of the
amendment would have rights identical to currently authorized
common stock of the Company. Adoption of the proposed amendment
and any issuance of the common stock would not affect the rights
of the holders of currently outstanding common stock of the
Company, except for effects incidental to increasing the number
of shares of our common stock outstanding, such as dilution of
the earnings per share and voting rights of current holders of
common stock. If the amendment is adopted, it will become
effective upon filing of a Certificate of Amendment of the
Restated Certificate with the Secretary of State of the State of
Delaware.
In addition to the 63,079,709 shares of common stock
outstanding on March 15
,
2011, as of December 31,
2010 the Board has reserved 6,274,471 shares for issuance
upon exercise of options and rights granted under our equity
compensation plans, up to 7,540,987 shares for issuance
upon potential conversion of convertible senior notes due 2016,
and 6,566,178 shares available for future issuance under
our equity compensation plans.
Although at present the Board of Directors has no other plans to
issue the additional shares of common stock, it believes it is
imperative that we maintain flexibility to issue additional
shares for business and financial purposes in the future. The
additional shares may be used for various purposes without
further stockholder approval, including raising capital;
providing equity incentives to employees, officers or directors;
establishing strategic relationships with other companies;
making earn-out payments to former Proteolix, Inc. stockholders
using shares of our common stock; expanding our business or
product lines through the acquisition of other businesses or
products; and other purposes. Without additional authorized
shares of common stock, it could be difficult for us to achieve
these purposes and we may be unable to capitalize on
opportunities or raise the funds we may need to further expand
our operations through the offer and sale of our securities,
which could have an adverse effect on our ability to implement
our plans to invest in the development of our earlier-stage
product candidates and carfilzomib.
The affirmative vote of the holders of a majority of the
outstanding shares of the common stock will be required to
approve this amendment to the Company’s Restated
Certificate. As a result, abstentions and broker non-votes will
have the same effect as negative votes.
The
Board Of Directors Recommends
A Vote In Favor Of Proposal 2.
17
PROPOSAL 3
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Onyx is asking its stockholders to cast an advisory vote to
approve the 2010 compensation of our named executive officers
listed in the “Executive Compensation — Summary
Compensation Table” as disclosed in this proxy statement
(our “NEOs”). This Proposal, commonly known as a
“say-on-pay”
proposal, gives our stockholders the opportunity to express
their views on the design and effectiveness of our executive
compensation programs.
As described in detail under the heading “Compensation
Discussion and Analysis,” our executive compensation
programs are designed to attract, motivate, and retain our NEOs,
who are critical to our success. Under these programs, our NEOs
are rewarded for the achievement of both specific financial and
strategic goals, which are expected to result in increased
stockholder value. Please read the “Compensation Discussion
and Analysis” and the tables and narrative that follow for
additional details about our executive compensation programs,
including information about the fiscal year 2010 compensation of
our NEOs.
Fiscal
Year 2010 Business Highlights
Our executive team has successfully managed our company through
fiscal year 2010, and we believe the compensation program for
our NEOs was instrumental in helping us achieve strong financial
performance through appropriate setting of both corporate and
individual goals under our annual incentive bonus program, and
the alignment between the performance of our common stock and
the equity awards made to our NEOs. For the fiscal year ending
December 31, 2010, we reported:
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Nexavar margins remained stable year over year, and sales of
Nexavar as recorded by Bayer in countries around the world
increased from $843.5 million in 2009 to
$934.0 million in 2010 despite pricing pressures in
European countries and the strengthening of the U.S. Dollar
against the Euro.
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In September 2010, we entered into an exclusive license
agreement with Ono Pharmaceutical Co., Ltd., or Ono. The
agreement grants Ono the right to develop and commercialize both
carfilzomib and ONX 0912 for all oncology indications in Japan.
We retain development and commercialization rights for all other
countries. If regulatory approval for carfilzomib
and/or
ONX
0912 is achieved in Japan, Ono is obligated to pay us
double-digit royalties on net sales of the licensed compounds in
Japan.
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In December 2010, we presented complete data results from an
ongoing pivotal Phase 2b trial, known as the
“003-A1”
trial, for carfilzomib in multiple myeloma patients. Results
demonstrated carfilzomib was well-tolerated in heavily
pre-treated relapsed and refractory multiple myeloma patients
and could be administered at a full dose over prolonged periods
of time, even in a very sick patient population for whom all
available treatment options have been exhausted and who have
multiple comorbidities.
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We began enrollment in two Phase 3 trials to evaluate the
efficacy of carfilzomib in multiple myeloma patients. One trial,
referred to as the ASPIRE trial, will evaluate carfilzomib in
combination with lenalidomide and low dose dexamethasone, versus
lenalidomide and low dose dexamethasone alone. The other trial,
referred to as the FOCUS trial, was initiated after seeking
Protocol Assistance/Scientific Advice from the Committee for
Medicinal Products for Human Use of the European Medical Agency
on the development of cafilzomib in the European Union. The
FOCUS trial will evaluate carfilzomib monotherapy in refractory
multiple myeloma patients in Europe using best supportive care
as the comparator.
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We completed enrollment in two trials to evaluate the efficacy
of Nexavar in hepatocellular carcinoma (HCC), or liver cancer,
patients. One trial, referred to as the SPACE trial, is a Phase
2 trial which will evaluate Nexavar or placebo in combination
with transarterial chemoembolization (TACE) performed with drug
eluting beads and doxorubicin for patients with intermediate
stage HCC. The other trial, referred to as the STORM trial, is a
Phase 3 clinical trial which will evaluate the efficacy of
Nexavar as an adjuvant therapy for patients with liver cancer
who have undergone resection or loco-regional treatment with
curative intent. In early 2011, we also completed enrollment in
another Phase 3 trial, referred to as the SEARCH trial, which
will examine Nexavar tablets in combination with
Tarceva
®
(erlotinib) tablets as a potential new treatment option for
patients with advanced HCC.
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18
Fiscal
Year 2010 Compensation Program Highlights
We believe that our executive compensation programs are
structured in the best manner possible to support our company
and our business objectives.
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Our cash and equity incentive compensation programs are
substantially tied to our key business objectives.
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Consistent with our
pay-for-performance
philosophy, based on our fiscal year 2010 results being below
the target, our NEOs received 67% - 79% of their target
cash bonuses.
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We continue to emphasize stock options, restricted stock and
performance share awards as key elements of our equity
compensation programs, so that our NEOs are rewarded when our
stock price increases and when they achieve identified goals
that contribute to our long-term success.
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The “earned value,” in a range of 87% to 89%, of an
NEO’s annual equity incentives is contingent on stock price
appreciation (in the case of the stock options) and the
achievement of pre-established performance objectives (in the
case of the performance shares). In addition, each of the equity
incentives is subject to a service-based vesting requirement.
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Our NEOs are not provided with any company
“perquisites” that are not otherwise provided to all
employees of Onyx.
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The Compensation Committee regularly reviews the compensation
programs for our NEOs to ensure they achieve the desired goals
of aligning our executive compensation structure with our
stockholders’ interests and current market practices. This
includes establishing performance targets based on our strategic
and operating plans. We closely monitor the compensation
programs and pay levels of executives from life sciences
companies of similar size and complexity, so that we may ensure
that our compensation programs are within the norm of market
practices. This enables us to retain our executive officers in a
competitive market for executive talent.
We believe that our executive compensation programs have been
effective at incenting the achievement of positive results,
appropriately aligning pay and performance, and in enabling us
to attract and retain very talented executives within our
industry.
In addition, beginning in fiscal year 2011 the Compensation
Committee determined that a rebalancing of target equity awards
for the executive officers will more closely align incentives
with shareholder value creation. The Compensation Committee
reduced the annual stock option equivalent targets in 2011 for
the executive officers and approved a performance share program
that will vest solely on the Committee’s determination that
the Company has achieved certain performance goals related to
long term value creation. If the Committee determines that the
goals have not been met, none of the performance shares will
vest.
Advisory
Vote and Board Recommendation
We request stockholder approval of our 2010 compensation of our
NEOs as disclosed in this proxy statement pursuant to the
SEC’s compensation disclosure rules (which disclosure
includes the “Compensation Discussion and Analysis,”
the compensation tables and the narrative disclosures that
accompany the compensation tables within the Executive
Compensation section of this proxy statement). This vote is not
intended to address any specific item of compensation, but
rather the overall compensation of our NEOs and the philosophy,
policies and practices described in this proxy statement.
Accordingly, we ask that you vote “FOR” the following
resolution at our 2011 Annual Meeting of Stockholders:
“RESOLVED, that the stockholders of Onyx Pharmaceuticals,
Inc. (the “Company”) approve, on an advisory basis,
the compensation of the named executive officers, as disclosed
in the Company’s Proxy Statement for the 2011 Annual
Meeting of Stockholders pursuant to the compensation disclosure
rules of the Securities and Exchange Commission, including the
Compensation Discussion and Analysis, the 2010 Summary
Compensation Table and the other related tables and disclosure
within the Executive Compensation section of this proxy
statement.”
19
Approval of the above resolution requires the affirmative vote
of holders of a majority of the shares present or represented by
proxy and entitled to vote at the annual meeting. Abstentions
and broker non-votes will have no effect on the outcome of this
Proposal.
As an advisory vote, the outcome of the vote on this Proposal is
not binding upon us. However, our Compensation Committee, which
is responsible for designing and administering our executive
compensation programs, values the opinions expressed by our
stockholders in their vote on this Proposal and will consider
the outcome of this vote when making future compensation
decisions for our NEOs.
The
Board Of Directors Recommends
A Vote “For” Proposal 3.
20
PROPOSAL 4
ADVISORY VOTE ON THE FREQUENCY OF
SAY-ON-PAY
VOTES
As described in our
“say-on-pay”
Proposal No. 3 above, our stockholders are being asked
to cast an advisory vote on our executive compensation programs.
In addition, we are asking our stockholders to cast an advisory
vote on how often we should include a
say-on-pay
vote in our proxy materials for future stockholder meetings.
Stockholders may vote to request the
say-on-pay
vote every year, every two years or every three years or may
abstain from voting.
Vote
and Board Recommendation
Our Board believes that
say-on-pay
votes should be conducted every year so that our stockholders
may provide us with their direct input on our compensation
philosophy, policies and practices, as disclosed in our proxy
statement each year. Our Board’s determination was based
upon the premise that NEO compensation is evaluated, adjusted
and approved on an annual basis by our Compensation Committee
and that the metrics that are used in determining
performance-based award achievements are annual metrics. Our
Compensation Committee, which administers our executive
compensation programs, values the opinions expressed by our
stockholders in these votes and will consider the outcome of
these votes in making its decisions on executive compensation.
You may cast your vote on your preferred voting frequency by
choosing one year, two years, three years, or abstain from
voting when you vote in response to the resolution set forth
below.
“RESOLVED, that the option of once every one year, two
years, or three years that receives the affirmative vote of
holders of a majority of the shares present or represented by
proxy and entitled to vote at the annual meeting will be
determined to be the preferred frequency of the stockholders
with which Onyx Pharmaceuticals, Inc. is to hold a stockholder
vote to approve, on an advisory basis, the compensation of the
named executive officers, as disclosed pursuant to the
Securities and Exchange Commission’s compensation
disclosure rules (which disclosure shall include the
Compensation Discussion and Analysis, the Summary Compensation
Table, and the other related tables and disclosure).”
The option of one year, two years or three years that receives
the affirmative vote of holders of a majority of the shares
present or represented by proxy and entitled to vote at the
annual meeting will be the frequency for the advisory vote on
executive compensation that has been selected by stockholders.
Abstentions and broker non-votes will have no effect on the
outcome of this Proposal. However, because this vote is advisory
and not binding on the Board or Onyx in any way, the Board may
decide that it is in the best interests of our stockholders and
Onyx to hold an advisory vote on executive compensation more or
less frequently than the option approved by our stockholders.
The
Board Of Directors Recommends
A Vote to Hold Annual
Say-On-Pay
Votes
21
PROPOSAL 5
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee of the Board of Directors has selected
Ernst & Young LLP as our independent registered public
accounting firm for the fiscal year ending December 31,
2011 and has further directed that management submit the
selection of the independent registered public accounting firm
for ratification by the stockholders at the Annual Meeting.
Ernst & Young has audited our financial statements
since our inception in 1992. Representatives of
Ernst & Young are expected to be present at the Annual
Meeting. They will have an opportunity to make a statement if
they so desire and will be available to respond to appropriate
questions.
Neither our Bylaws nor other governing documents or law require
stockholder ratification of the selection of Ernst &
Young as our independent registered public accounting firm.
However, the Audit Committee of the Board is submitting the
selection of Ernst & Young to the stockholders for
ratification as a matter of good corporate practice. If the
stockholders fail to ratify the selection, the Audit Committee
of the Board will reconsider whether or not to retain that firm.
Even if the selection is ratified, the Audit Committee of the
Board in its discretion may direct the appointment of a
different independent registered public accounting firm at any
time during the year if they determine that such a change would
be in our and our stockholders’ best interests.
The affirmative vote of the holders of a majority of the votes
cast either in person or by proxy at the Annual Meeting will be
required to ratify the selection of Ernst & Young.
Abstentions and broker non-votes are counted towards a quorum,
but are not counted for any purpose in determining whether this
Proposal 3 has been approved.
Principal
Accountant Fees And Services
In connection with the audit of the 2010 financial statements,
we entered into an engagement agreement with Ernst &
Young which sets forth the terms by which Ernst &
Young will perform our audit services. That agreement is subject
to alternative dispute resolution procedures.
The following table represents aggregate fees billed to us for
fiscal years ended December 31, 2010 and December 31,
2009 by Ernst & Young, our principal accountant:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
|
December 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
(In thousands)
|
|
|
|
|
Audit Fees
|
|
$
|
684
|
|
|
$
|
717
|
|
|
Audit-Related Fees
|
|
|
—
|
|
|
|
—
|
|
|
Tax Fees
|
|
|
—
|
|
|
|
—
|
|
|
All Other Fees
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
684
|
|
|
$
|
717
|
|
|
|
|
|
|
|
|
|
|
|
In the above table, in accordance with the SEC’s
definitions and rules, “audit fees” are fees we paid
Ernst & Young for professional services for the audit
of our financial statements included in
Form 10-K
and review of financial statements included in
Form 10-Qs,
for services related to attestation of the effectiveness of
internal controls under the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002 and for services that are
normally provided by the accountant in connection with statutory
and regulatory filings; and “tax fees” are fees for
preparation of federal and state income tax returns and related
tax advice.
All fees and services described above were pre-approved by the
Audit Committee.
Pre-Approval
Policies And
Procedures
.
The Audit Committee has adopted a policy and procedures for the
pre-approval of audit and non-audit services rendered by our
independent public accounting firm, Ernst & Young. The
policy generally pre-approves specified services in the defined
categories of audit services, audit-related services, and tax
services up to specified amounts. Pre-approval may also be given
as part of the Audit Committee’s approval of the scope of
the engagement of the
22
independent auditor or on an individual explicit
case-by-case
basis before the independent auditor is engaged to provide each
service. The pre-approval of services may be delegated to one or
more of the Audit Committee’s members, but the decision
must be reported to the full Audit Committee at its next
scheduled meeting.
The Audit Committee has determined that the rendering of the
services other than audit services by Ernst & Young is
compatible with maintaining the principal accountant’s
independence.
THE BOARD
OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 5.
23
REPORT OF
THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
1
The Audit Committee has prepared the following report on its
activities with respect to our audited financial statements for
the year ended December 31, 2010.
Our management is responsible for the preparation, presentation
and integrity of our financial statements and is also
responsible for maintaining appropriate accounting and financial
reporting practices and policies. Management is also responsible
for establishing and maintaining adequate internal controls and
procedures designed to provide reasonable assurance that we are
in compliance with accounting standards and applicable laws and
regulations.
Ernst & Young LLP, our independent registered public
accounting firm for 2010, is responsible for expressing opinions
on the conformity of our audited financial statements with
accounting principles generally accepted in the United States
and has expressed its own opinion on the effectiveness of our
internal control over financial reporting.
In this context, the Audit Committee has reviewed and discussed
with management and Ernst & Young the audited
financial statements for the fiscal year ended December 31,
2010, management’s assessment of the effectiveness of our
internal control over financial reporting and Ernst &
Young’s independent evaluation of our internal control over
financial reporting. The Audit Committee has also discussed with
Ernst & Young the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards
, Vol. 1. AU
section 380) as adopted by the Public Company
Accounting Oversight Board (“PCAOB”) in
Rule 3200T. The Audit Committee has also received the
written disclosures and the letter from the independent
registered public accounting firm required by PCAOB Ethics and
Independence Rule 3526,
Communication with Audit
Committees Concerning Independence
, regarding the
independent registered public accounting firm’s
communications with the audit committee concerning independence,
and has discussed with the independent registered public
accounting firm the independent registered public accounting
firms’ independence.
Based on the considerations referred to above, the Audit
Committee recommended to the Board of Directors that the audited
financial statements for the year ended December 31, 2010
be included in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010.
From the members of our Audit Committee:
Corinne H. Nevinny, Chair
Magnus Lundberg
William R. Ringo
1
This
Section is not “soliciting material,” is not deemed
“filed” with the SEC and is not to be incorporated by
reference in any filing of the Company under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, other than the Company’s Annual Report on
Form 10-K,
whether made before or after the date hereof and irrespective of
any general incorporation language in that filing.
24
MANAGEMENT
Information with respect to our executive officers and other
members of management as of March 29, 2011 is set forth
below:
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
|
|
N. Anthony Coles, M.D.
|
|
|
50
|
|
|
President, Chief Executive Officer and Director
|
|
Matthew K. Fust
|
|
|
46
|
|
|
Executive Vice President and Chief Financial Officer
|
|
Laura A. Brege
|
|
|
53
|
|
|
Executive Vice President, Corporate Affairs
|
|
Kaye Foster-Cheek
|
|
|
51
|
|
|
Senior Vice President, Global Human Resources
|
|
Juergen Lasowski, Ph.D
|
|
|
52
|
|
|
Executive Vice President, Corporate Development and Strategy
|
|
Ted W. Love, M.D.
|
|
|
52
|
|
|
Executive Vice President and Head of Research and Development
and Technical Operations
|
|
Suzanne M. Shema, J.D.
|
|
|
53
|
|
|
Senior Vice President, General Counsel
|
|
Julianna Wood
|
|
|
54
|
|
|
Vice President, Public Affairs
|
N. Anthony Coles, M.D.,
was appointed
President, Chief Executive Officer and a member of our Board of
Directors, effective March 31, 2008. From May 2006 to
March 17, 2008, Dr. Coles was President, Chief
Executive Officer, and a member of the Board of Directors of NPS
Pharmaceuticals, Inc., a biotechnology company focused on the
discovery and development of novel therapeutics. From November
2005 to May 2006, Dr. Coles was President, Chief Operating
Officer and a member of the Board of Directors of NPS
Pharmaceuticals. From 2002 until October 2005, Dr. Coles
was Senior Vice President of Commercial Operations at Vertex
Pharmaceuticals Incorporated. Beginning in 1996, Dr. Coles
held a number of executive positions while at Bristol-Myers
Squibb Company, including Senior Vice President of Strategy and
Policy; Senior Vice President of Marketing and Medical Affairs,
Neuroscience/Infectious Diseases/Dermatology; Vice President,
Western Area Sales Cardiovascular and Metabolic Business Unit
for U.S. primary care; and Vice President, Cardiovascular
Global Marketing. From 1992 until 1996, Dr. Coles served in
various positions at Merck & Company, Inc., most
recently as Vice President of the Hypertension and Heart Failure
business group. Dr. Coles earned his M.D. from Duke
University, his master’s degree in public health from
Harvard College and his undergraduate degree from Johns Hopkins
University. Dr. Coles currently serves as a trustee and
member of the Executive Committee for the Johns Hopkins
University Board of Trustees, as well as a member of the board
of trustees for Johns Hopkins Medicine. Dr. Coles is also a
member of the board of directors for Laboratory Corporation of
America (LabCorp), as well as Campus Crest Communities, Inc.,
both NYSE traded companies. He is also a member of the board of
the Biotechnology Industry Organization (BIO).
Matthew K. Fust
joined us as Executive Vice President and
Chief Financial Officer in January 2009. From May 2003 to
December 2008, Mr. Fust served as Chief Financial Officer
at Jazz Pharmaceuticals, Inc., a specialty pharmaceutical
company. From 2002 to 2003, Mr. Fust served as Chief
Financial Officer at Perlegen Sciences, a biopharmaceutical
company. Mr. Fust serves on the Board of Directors of
Sunesis Pharmaceuticals, a biopharmaceutical company.
Mr. Fust received a B.A. from the University of Minnesota
and an M.B.A. from the Stanford Graduate School of Business.
Laura A. Brege
joined us in June 2006 as Executive Vice
President and Chief Business Officer. In October 2007,
Ms. Brege was appointed Chief Operating Officer and in
January 2011 she was appointed Executive Vice President,
Corporate Affairs. Previously, Ms. Brege was a General
Partner at Red Rock Management, a venture capital firm
specializing in early stage financing for technology companies,
since 1999. From 1991 to 1999, Ms. Brege served as the
Senior Vice President, Chief Financial Officer for COR
Therapeutics, Inc., a biotechnology company. Prior to joining
COR Therapeutics Ms. Brege served in various financial
roles at Flextronics, Inc. and The Cooper Companies. Ms Brege
currently serves on the Board of Directors of Acadia
Pharmaceuticals, Angiotech Pharmaceuticals, and Zvents, Inc.
Ms. Brege holds an MBA from University of Chicago and a
B.A. in Government and a B.S. in Economics from Honors Tutorial
College, Ohio University.
Kaye Foster-Cheek
joined us in September 2010 as Senior
Vice President, Global Human Resources. From May 2003 to March
2010, Ms. Foster-Cheek was Vice President of Human
Resources and Executive Committee
25
Member at Johnson & Johnson where she was responsible
for the human resources and talent management functions. From
May 1990 to May 2003, Ms. Foster-Cheek held several senior
Human Resources executive positions with Pfizer Inc, and led the
integration of both the Warner-Lambert and Pharmacia mergers for
multiple countries. Ms. Foster-Cheek earned her
undergraduate degree at Baruch College of the City University of
New York and received an M.B.A. from Columbia University,
Graduate School of Business.
Juergen Lasowski, Ph.D.
, joined us as Senior Vice
President, Corporate Development in May 2008. In February 2011,
Dr. Lasowski was appointed Executive Vice President,
Corporate Development and Strategy. From April 2006 to October
2007, Dr. Lasowski was the Senior Vice President of
Corporate Development at NPS Pharmaceuticals. From 1989 to
January 2006, Dr. Lasowski held several positions at
Sanofi-Aventis and its predecessor companies. Dr. Lasowski
earned a Ph.D. in organic chemistry from the University of
Mainz, Germany and an M.B.A. from INSEAD in France.
Ted W. Love, M.D.,
joined us in February 2010 as
Executive Vice President and Head of Research and Development.
In January 2011, Dr. Love was appointed Executive Vice
President and Head of Research & Development and
Technical Operations. Prior to joining us, Dr. Love was
President, Chief Executive Officer and Chairman of the Board of
Directors at ARCA Biopharma, Inc. (formerly Nuvelo, Inc.), a
biopharmaceutical company, which he joined in 2001. Previously,
he served as Senior Vice President of Development at Theravance,
Inc. Earlier in his career, Dr. Love spent six years at
Genentech, Inc. in a number of senior management positions in
Medical Affairs and Product Development and also served as
Chairman of Genentech’s Product Development Committee.
Dr. Love earned his undergraduate degree in molecular
biology from Haverford College and his medical degree at Yale
Medical School. Dr. Love completed his residency and
fellowship training in internal medicine and cardiology at
Harvard Medical School and Massachusetts General Hospital, where
he later served on the faculty. He currently serves on the Board
of Directors of Affymax, Inc., Santarus, Inc., ARCA biopharma,
Inc., and on the California Institute for Regenerative Medicine
Independent Citizens’ Oversight Committee.
Suzanne M. Shema, J.D.,
joined us as Senior Vice
President and General Counsel in August 2009. From 2006 to 2009,
Ms. Shema served as General Counsel and Corporate
Compliance Officer at ZymoGenetics, Inc., a biopharmaceutical
company. From 2001 to 2006, she held several positions at
ZymoGenetics, Inc. From February 2000 to May 2001,
Ms. Shema served as General Counsel at aQuantive, Inc. From
July 1998 to February 2000, she was corporate counsel at
ZymoGenetics. From 1991 to March 1998, she served as Associate
General Counsel at Research Corporation Technologies, Inc. From
1989 to 1991, Ms. Shema served as Associate General Counsel
at NeoRx Corporation. Previously, she held an associate position
at the firm of Seed and Berry. Ms. Shema received a B.S. in
Chemistry from the University of Texas, an M.S. in Chemistry
from the University of Washington and a J.D. from the University
of Washington School of Law.
Julianna Wood
joined us as Vice President, Corporate
Communications and Investor Relations in May 2003. In January
2011, Ms. Wood was appointed Vice President, Public
Affairs. From December 2001 to May 2003, Ms. Wood was
Senior Director of Investor Relations and Corporate
Communications at Caliper Technologies Corporation. Previously,
she served in a similar capacity at Sangamo BioSciences, Inc.
and Chiron Corporation. Ms. Wood holds a B.A. from Stanford
University and has an M.B.A. from Duke University.
26
SECURITY
OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of our common stock as of March 15, 2011 by:
(i) each director and nominee for director; (ii) each
of the executive officers named in the Summary Compensation
Table; (iii) all of our current executive officers and
directors as a group; and (iv) all those known by us to be
beneficial owners of more than five percent of our common stock.
Beneficial
Ownership (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Issuable
|
|
|
|
|
|
|
|
|
|
|
Pursuant to Options
|
|
|
|
|
|
|
|
Outstanding
|
|
|
Exercisable Within
|
|
|
|
|
|
|
|
Shares of
|
|
|
60 Days of
|
|
|
Percent of
|
|
|
Name of Beneficial Owner
|
|
Common Stock (2)
|
|
|
March 15, 2011
|
|
|
Total
|
|
|
|
|
BlackRock, Inc. (3)
40 East 52nd Street
New York, NY 10022
|
|
|
4,349,191
|
|
|
|
—
|
|
|
|
6.92
|
%
|
|
Sectoral Asset Management Inc. (4)
2100-1000
Sherbrooke St.
West Montreal PQ H3A 3G4
Canada
|
|
|
3,860,105
|
|
|
|
—
|
|
|
|
6.14
|
%
|
|
Wellington Management Company, LLP (5)
280 Congress Street
Boston, MA 02210
|
|
|
4,836,868
|
|
|
|
—
|
|
|
|
7.70
|
%
|
|
Paul Goddard, Ph.D.
|
|
|
5,290
|
|
|
|
60,726
|
|
|
|
|
*
|
|
Antonio J. Grillo-López, M.D
|
|
|
4,265
|
|
|
|
76,914
|
|
|
|
|
*
|
|
Magnus Lundberg
|
|
|
4,616
|
|
|
|
59,041
|
|
|
|
|
*
|
|
Corinne H. Nevinny
|
|
|
3,964
|
|
|
|
47,410
|
|
|
|
|
*
|
|
William R. Ringo
|
|
|
—
|
|
|
|
—
|
|
|
|
|
*
|
|
Wendell Wierenga, Ph.D.
|
|
|
3,580
|
|
|
|
56,452
|
|
|
|
|
*
|
|
Thomas G. Wiggans
|
|
|
6,115
|
|
|
|
60,287
|
|
|
|
|
*
|
|
N. Anthony Coles, M.D.
|
|
|
49,633
|
|
|
|
364,293
|
|
|
|
|
*
|
|
Matthew K. Fust
|
|
|
18,101
|
|
|
|
67,447
|
|
|
|
|
*
|
|
Laura A. Brege
|
|
|
18,927
|
|
|
|
220,980
|
|
|
|
|
*
|
|
Kaye Foster Cheek
|
|
|
17,800
|
|
|
|
—
|
|
|
|
|
*
|
|
Ted W. Love, M.D.
|
|
|
29,737
|
|
|
|
36,094
|
|
|
|
|
*
|
|
All current executive officers and directors as a group
(15 persons)
|
|
|
198,696
|
|
|
|
1,282,878
|
|
|
|
2.03
|
%
|
|
|
|
|
|
*
|
|
Less than one percent.
|
|
|
|
(1)
|
|
This table is based upon information supplied by officers and
directors and, with respect to the beneficial owners of more
than five percent of our common stock, Schedules 13D and 13G
filed with the SEC, which information may not be accurate as of
March 15, 2011. Unless otherwise indicated in the footnotes
to this table and subject to community property laws where
applicable, we believe that each of the stockholders named in
this table has sole voting and investment power with respect to
the shares indicated as beneficially owned. The address of each
person named in the table, unless otherwise indicated, is
c/o Onyx
Pharmaceuticals, Inc., 249 East Grand Avenue, South
San Francisco, CA 94080. Applicable percentages are based
on 63,079,709 shares outstanding on March 15, 2011
adjusted as required by rules promulgated by the SEC.
|
|
|
|
(2)
|
|
This column includes restricted stock awards granted as of
March 15, 2011 for which the individuals have voting power.
Restricted stock awards are subject to certain restrictions,
including vesting.
|
27
|
|
|
|
|
(3)
|
|
BlackRock, Inc., in its capacity as investment adviser, may be
deemed to beneficially own the number of shares of common stock
set forth in the table above, which are held of record by
clients of BlackRock, Inc.
|
|
|
|
(4)
|
|
Sectoral Asset Management Inc, in its capacity as an investment
adviser, has the sole right to dispose of the number of shares
of common stock set forth in the table above and has shared
voting rights over 3,860,105 shares. Jérôme G.
Pfund and Michael L. Sjöström are the majority
shareholders of Sectoral Asset Management Inc. and are each
deemed to have the sole right to dispose of the number of shares
of common stock set forth in the table above and shared voting
rights over 3,860,105 shares. Sectoral Asset Management
Inc. and Messrs. Pfund and Sjöström disclaim
beneficial ownership of our common stock held by Sectoral Asset
Management Inc.
|
|
|
|
(5)
|
|
Wellington Management Company, LLP, in its capacity as
investment adviser, may be deemed to beneficially own the number
of shares of common stock set forth in the table above, which
are held of record by clients of Wellington Management Company,
LLP.
|
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the “1934 Act”) requires our directors
and executive officers, and persons who own more than ten
percent of a registered class of our equity securities, to file
with the SEC initial reports of ownership and reports of changes
in ownership of our common stock and other equity securities.
Officers, directors and greater than ten percent stockholders
are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such
reports furnished to us and written representations that no
other reports were required, during the fiscal year ended
December 31, 2010 all Section 16(a) filing
requirements applicable to our officers, directors and greater
than ten percent beneficial owners were complied with.
COMPENSATION
DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis addresses the
following topics:
|
|
|
|
|
|
•
|
our compensation philosophy and objectives;
|
|
|
|
|
•
|
our process for setting executive officer performance and
compensation;
|
|
|
|
|
•
|
the components of executive officer compensation; and
|
|
|
|
|
•
|
our compensation decisions for the 2010 fiscal year and for the
first quarter of the 2011 fiscal year.
|
The Named Executive Officers for the 2010 fiscal year were as
follows:
|
|
|
|
|
Named Executive Officer
|
|
Title
|
|
|
|
N. Anthony Coles, M.D.
|
|
President and Chief Executive Officer
|
|
Matthew K. Fust
|
|
Executive Vice President and Chief Financial Officer
|
|
Laura A. Brege
|
|
Executive Vice President, Corporate Affairs
|
|
Kaye Foster-Cheek
|
|
Senior Vice President, Global Human Resources
|
|
Ted W. Love, M.D.
|
|
Executive Vice President, Head of Research and Development and
Technical Operations
|
Executive
Compensation Philosophy and Objectives
The Compensation Committee’s overall goals with respect to
executive officer compensation are to provide compensation
sufficient to attract, motivate and retain executives of
outstanding ability, performance and potential, and to establish
and maintain an appropriate relationship between executive
compensation and the creation of shareholder value. The
Compensation Committee believes that the most effective
compensation program is one that
28
provides competitive base pay, rewards the achievement of
established annual and long-term goals and objectives and
provides an incentive for retention.
Compensation
Objectives
Our executive compensation program is designed around the
following five principles:
1) develop compensation policies and practices that are
consistent with Onyx’s strategic business objectives;
2) attract, motivate and retain executive officers and
other employees who contribute to the long-term success of the
organization;
3) design programs to retain key employees, reward past
performance and incentivize future contributions balancing both
short and long-term financial and business objectives to build a
sustainable company;
4) provide long-term incentive opportunities to continue to
establish the relationship between employee contributions,
rewards and stockholder value creation; and
5) align our compensation program with Onyx’s core
values and culture.
Target
Pay Position/Mix of Pay
The components used to support these objectives are base salary,
the annual incentive bonus program, equity awards and certain
other benefits (discussed in greater detail below under
“Executive Compensation Components”). The combined mix
of these pay elements allows us to provide a competitive total
rewards package to our executives. To date, we have not
specified a target percentage of the overall compensation
package to be represented by the various compensation elements.
The Compensation Committee’s intention is that long-term
equity compensation, measured as the value transferred, be a
significant part of the executive compensation philosophy and
historically, it has represented the largest component.
Employees in more senior roles have an increasing proportion of
their compensation tied to longer-term performance because they
are in a position to have greater influence on longer-term
results. For each target or pre-determined element of
compensation, such as base salary, target bonus and quantity of
equity awards, our strategy has been to examine peer group
compensation practices and set target compensation at
approximately the 60th percentile of the peer group for
base salary and bonus and the 50th percentile for equity.
This is the same target pay position for all our employee
levels. However, our Compensation Committee has historically
approved actual compensation for officers at levels other than
the targeted percentile based on the responsibilities and
requirements of the position, the individual’s experience,
individual and company performance relative to individual and
corporate performance goals and the peer group to ensure an
appropriate
pay-for-performance
alignment. In addition, we emphasize variable, or at-risk,
compensation to link actual compensation to corporate
performance.
Beginning in fiscal year 2011 the Compensation Committee
determined that a rebalancing of target equity awards for the
executive officers will more closely align incentives with
shareholder value creation. The Compensation Committee reduced
the annual stock option equivalent targets in 2011 for the
executive officers and approved a performance share program that
will vest solely on the Committee’s determination that the
Company has achieved certain performance goals related to long
term value creation. If the Committee determines that the goals
have not been met, none of the performance shares will vest.
The Compensation Committee determines and approves the
compensation levels and the establishment of performance
objectives for the executive officers, excluding the Chief
Executive Officer, based on recommendations received from the
Chief Executive Officer. The Board of Directors determines and
approves the compensation levels and establishment of
performance objectives for the Chief Executive Officer based on
recommendations received from the Compensation Committee. As a
part of determining executive officer performance and
compensation and recommending the Chief Executive Officer’s
performance and compensation, the Compensation Committee engaged
Radford, an AON Hewitt Consulting Company. Radford provides
analysis and recommendations regarding:
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|
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trends and emerging topics with respect to executive
compensation;
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peer group selection for executive compensation benchmarking;
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compensation practices of our peer group;
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compensation programs for executives and broad-based
employees; and
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stock utilization and other metrics.
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In addition, the Company subscribes to Radford’s annual
Global Life Science compensation survey data on an ongoing
basis. Radford advised the Compensation Committee on all of the
principal aspects of executive compensation, including executive
new hire compensation arrangements. The Compensation Committee
regularly meets in executive session to discuss executive
compensation issues in which Radford may be asked to
participate. Radford attended meetings of the Compensation
Committee when requested to do so and reported to the
Compensation Committee rather than to management, although they
met with management for purposes of gathering information for
their analyses and recommendations.
Compensation
Benchmarking
The Compensation Committee benchmarks the Company’s
executive compensation against a peer group of companies to
determine competitiveness and market trends. The Compensation
Committee reviews the companies in our peer group annually,
reviews Radford’s recommendations regarding such companies,
and makes adjustments as necessary to ensure the peer group
continues to properly reflect the market in which we compete for
talented executives. The Committee also annually reviews the
executive pay practices of other similarly situated companies as
reported in industry surveys and reports from compensation
consulting firms. These surveys are specific to the
biopharmaceutical and biotechnology sector. We request
customized reports of these surveys so that the compensation
data reflects the practices of companies that are similar to us.
This information is also considered when making recommendations
for each element of compensation.
In developing the peer group of companies for 2010, the
Compensation Committee, with assistance from its outside
consultant, examined market capitalization of the top 40
biotechnology companies and based on review of these companies,
assembled the final peer list for 2010. The peer group examined
and approved in 2010 consisted of the following biotechnology
companies:
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Acorda Therapeutics, Inc.
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Genzyme Corporation
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Myriad Genetics, Inc.
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Alexion Pharmaceuticals, Inc.
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Geron Corporation
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Nektar Therapeutics
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Alkermes, Inc.
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Gilead Sciences, Inc.
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Pharmasset, Inc.
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Amylin Pharmaceuticals, Inc.
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Halozyme Therapeutics, Inc.
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Questcor Pharmaceuticals, Inc.
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Auxilium Pharmaceuticals, Inc.
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Human Genome Sciences, Inc.
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Regeneron Pharmaceuticals, Inc.
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Biogen Idec Inc.
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InterMune, Inc.
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Salix Pharmaceuticals, Ltd.
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BioMarin Pharmaceuticals, Inc.
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Incyte Corporation
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Savient Pharmaceuticals Inc.
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Celgene Corporation
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Isis Pharmaceuticals, Inc.
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Seattle Genetics, Inc.
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Cephalon, Inc.
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Lexicon Pharmaceuticals, Inc.
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Targacept, Inc.
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Cubist Pharmaceuticals, Inc.
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Mannkind Corporation
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Theravance, Inc.
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Dendreon Corporation
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Medicines Co.
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United Therapeutics Corporation
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Endo Pharmaceuticals Holdings Inc.
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Micromet, Inc.
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Vertex Pharmaceuticals Incorporated
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Enzon Pharmaceuticals, Inc.
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Momenta Pharmaceuticals, Inc.
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ViroPharma, Inc.
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In establishing the 2010 peer group list, Allos Therapeutics,
Inc., Alnylam Pharmaceuticals, Inc., AMAG Pharmaceuticals, Inc.,
Cadence Pharmaceuticals, Inc., Exelixis, Inc., Medarex,
Medivation, Inc., OSI Pharmaceuticals, Inc., Sepracor and
XenoPort, Inc. were removed from the 2009 peer group list as a
result of acquisitions and changes in market capitalization. In
addition, Enzon Pharmaceuticals, Inc., Incyte Corporation,
Lexicon Pharmaceuticals, Inc., Medicines Co., Micromet, Inc.,
Momenta Pharmaceuticals, Inc., Pharmasset, Inc., Questcor
Pharmaceuticals, Inc., Targacept, Inc. and ViroPharma, Inc. were
added to the peer group list as a result of increases in market
capitalization. Data on the compensation practices of the
above-mentioned peer group generally is gathered by Radford or
through searches of publicly available information. Peer group
data is gathered with respect
30
to base salary, bonus targets and all equity awards. It does not
include generally available benefits, such as health care
coverage.
Executive
Compensation Components
Base
Salary
Base salary is the primary fixed compensation element in the
executive pay program, which is intended to attract and retain
executive officers of outstanding ability. Our Compensation
Committee believes that base salaries should reflect the job
responsibilities, performance, experience and skill level of the
executive, as well as pay level relative to similar positions at
companies in our peer group, and internal parity with respect to
the rest of the executive team. We have an annual “merit
budget” based on data and recommendations provided by
Radford which is the company’s overall budget for base
salary increases and includes recommended guidelines for
adjustments based on an employee’s individual performance
against annual goals and objectives and their compensation
compared to similar positions within and outside of the company.
These guidelines are used throughout our company for all
employees. All base salary increases are effective on January 1
of each year.
Annual
Incentive Bonus Program
Our annual incentive bonus program is an “at-risk”
cash compensation arrangement for all employees designed to
reward the achievement of key financial, operational and
strategic goals that we believe support longer-term stockholder
value. Payment of cash bonuses to our executive officers is
subject to the achievement of a minimum performance threshold
tied to our corporate goals established by the Board of
Directors.
Equity
Compensation
Equity compensation represents the largest at-risk component of
our executive officer compensation program. We believe this is
appropriate to align the interests of our executive officers
with those of our stockholders to achieve and sustain long-term
stock price growth. We accomplish this objective by providing
executive officers with a substantial economic interest in the
long-term appreciation of our common stock through the grant of
a mix of stock options and restricted shares, measured on an
option equivalent basis. The target mix of stock options to
restricted shares for vice presidents and above as part of their
annual award is 70% stock options and 30% restricted stock. In
addition, the Compensation Committee has delegated to management
the option, at their discretion, to offer a 70% stock option and
30% restricted stock mix to vice presidents and above upon hire
to respond to specific situations. For all other employees, the
annual grant ratio is 50% stock options and 50% restricted
shares, and new hire grants are provided in the form of stock
options only. In the case of restricted stock awards, the number
of shares granted is determined based on a 3:1 ratio of stock
options to restricted stock. For example, if an executive
officer level employee were to receive an annual equity award of
100 option equivalent shares, he or she would receive an option
exercisable for 70 shares of our common stock and a
restricted stock award of 10 shares. Stock options are
issued with an exercise price equal to the closing price of our
stock on the date of grant, which, for annual grants, is the
last business day of March each year and for new hire and
promotion grants, is generally the date of hire or promotion.
Stock options provide value only if our stock price increases,
which benefits all stockholders and the executive or employee
only if he or she remains with us until his or her options vest,
thus aligning the interests of our stockholders, and our
employees and executives, during their employment, with the
long-term success of the Company. Our standard practice is to
grant options to executive officers upon hire that vest ratably
over a four-year period (the first 1/4th vest one year from
the grant date and 1/48th each month thereafter until fully
vested) and each year to grant additional options to executive
officers that vest 1/8th after six months from the grant
date and
1/48th each
month thereafter over four years. Stock options granted for
promotions vest ratably 1/48th each month from the grant
date over four years. Restricted stock grants vest over three
years, with 1/3rd vesting on each of the three anniversaries of
the grant date. We believe this vesting schedule is appropriate
and encourages retention of our executive officers. Also, this
vesting schedule is typical among our peer companies.
Beginning in 2011 we are rebalancing this component of our
executive officer compensation program to further enhance the
linkage to shareholder value creation through the use of
performance based vesting of restricted shares for a portion of
total equity compensation delivered to all executive officers.
31
Equity
Grant Practices
Generally, our Compensation Committee approves all equity grants
to our executive officers, other than the Chief Executive
Officer. Equity grants made to the Chief Executive Officer are
approved by the full Board of Directors, based on
recommendations made by the Compensation Committee. We grant
options at exercise prices equal to the closing price of our
common stock on the NASDAQ Global Market on the date of grant.
In addition, we do not coordinate grants of options so that they
are made before an announcement of favorable information, or
after an announcement of unfavorable information. To date, we
have not repriced or replaced any stock options if the grant
price declines after the grant date. Re-pricing or replacement
of stock options, for any reason, can only occur upon a majority
vote of our shareholders as defined in our 2005 Equity Incentive
Plan. Our practice has been to grant stock options for all
employees on their first day of employment, or the effective
date of a promotion that carries an option grant with it, and to
approve annual stock award grants at the first Compensation
Committee of the year and full Board of Directors meeting
(typically in February or March). In 2007, the Board of
Directors established the grant date for annual equity incentive
awards for all employees to be the last business day of March
for annual grants awarded in 2007 and for each year thereafter.
The annual grant date and associated exercise price of executive
officer grants are the same as for the rest of the employee
population. Our Compensation Committee and our Board of
Directors selected the date of the first Compensation Committee
and Board of Directors meeting of each year as the date to
approve annual equity grants because it coincides with our
Compensation Committee’s and Board of Directors’
review of the Company’s and individual’s performance
during the year and the approval of other executive officer
compensation decisions (e.g., base salary increases and bonus
payments). Further, our Compensation Committee and our Board of
Directors believe that the meetings provide adequate time for
our Compensation Committee and Board of Directors to ask
questions of the Chief Executive Officer regarding his
recommendations for the other executive officers and to
carefully deliberate the Chief Executive Officer’s
compensation arrangements.
For administrative efficiency, our Board of Directors has
created a restricted stock committee, currently composed of the
Chief Executive Officer, and has delegated authority to that
committee to approve restricted stock awards to non-executive
officer employees and consultants. The Board of Directors has
also granted to the Chief Executive Officer, Chief Financial
Officer and Senior Vice President, Global Human Resources the
authority to approve option grants to non-executive officer
employees. The purpose of these delegations of authority is to
enhance the flexibility of option and stock administration
within the Company and to facilitate the timely granting of
options and restricted stock awards to employees, particularly
new employees. All stock option and restricted stock awards
granted by the authorized delegates must comply with the terms
and conditions of our 2005 Equity Incentive Plan and must be
within specified limits approved by the Compensation Committee.
In particular, the authorized delegates may not grant options or
restricted stock awards to executive officers, including himself
or herself, or grant options or restricted stock awards to any
employee to acquire more than an aggregate of
100,000 shares per year or any consultant to acquire more
than 10,000 shares per year individually, or
40,000 shares to consultants as a group, without
Compensation Committee approval.
Benefits
and Perquisites
We offer a number of benefits to the executive officers pursuant
to benefit programs that are also provided to all non-executive
officer employees for participation. These benefits programs
include the Employee Stock Purchase Plan (ESPP), vacation,
medical, dental and vision insurance, long-term and short-term
disability insurance, life and accidental death and
dismemberment insurance, health and dependent care flexible
spending accounts, wellness programs, educational assistance,
employee assistance and certain other benefits. Most employees
are also eligible for variable pay under the sales incentive
plan or the incentive plan described above.
We maintain a tax-qualified 401(k) Plan, which provides for
broad-based employee participation. Under the 401(k) Plan, all
Onyx employees were eligible to contribute up to $16,500 of
their compensation in 2010 subject to certain Internal Revenue
Service and plan restrictions. Beginning in fiscal year 2007,
Onyx provided a discretionary company match for all employee
contributions of $0.50 per dollar contributed, up to a maximum
match of $3,000 in any calendar year. In fiscal year 2008 and,
then subsequently, in fiscal year 2011, the maximum match was
increased to $3,500 and $4,500, respectively, in any calendar
year. Onyx does not provide defined benefit pension plans or
defined contribution retirement plans to its executives or other
employees other than the 401(k) Plan.
32
Tax
Considerations
We believe it is in our best interest, to the extent practical,
to have executive officer compensation be fully deductible under
Section 162(m) of the Code. Section 162(m) generally
provides that a publicly-held company may not deduct
compensation paid to certain of its top executive officers to
the extent that such compensation exceeds $1.0 million per
officer in a calendar year. Compensation that is
“performance-based compensation” within the meaning of
the Code does not count toward the $1.0 million deduction
limit.
We have taken steps to structure payments to executive officers
under the corporate bonus and equity compensation programs to
meet the Section 162(m) requirements. We believe that
performance based awards granted from our Incentive Plan are
Section 162(m) compliant. Our Compensation Committee
nevertheless retains the discretion to provide compensation that
potentially may not be fully deductible to reward performance
and/or
enhance retention.
Total
Compensation
We believe we are fulfilling our compensation objectives and in
particular, rewarding executive officers in a manner that
supports our strong
pay-for-performance
philosophy and in a way that strives to maintain fair,
reasonable and responsible pay that incentivizes our executives
and aligns their interests with those of our stockholders. A
substantial portion of executive compensation is tied directly
to our performance and is structured to ensure that there is an
appropriate balance between our long-term and short-term
performance. Overall, the base pay and total target cash
compensation, including target bonuses for the executive
officers in 2010, were between the 50th and
60th percentiles of our peer group. Equity compensation for
ongoing executive officer grants is targeted at the
50th percentile. In determining an executive officer’s
award and where it is positioned relative to the
50th percentile, the Committee examines market benchmark
data focusing on ongoing equity grant values based on the
Black-Scholes model, grant levels as a percent of total
outstanding shares and absolute number of shares granted. In
addition to specific annual grant benchmark data, the Committee
also considers where an executive’s total equity ownership
is positioned relative to the peer group as well as the
retention value of an executive’s existing equity holdings
when determining the appropriate size of ongoing equity awards.
The average resulting mix of compensation elements for our named
executive officers, excluding Dr. Coles’, in 2010 was
22% base salary, 10% target annual bonus opportunity and 68%
equity grant value, which is in line with our compensation
philosophy.
2010
Executive Officer Compensation
In February 2010, our Compensation Committee approved 2010 base
salaries and target incentive bonus percentages, 2010 stock
option grants and restricted stock awards to the executive
officers. These decisions were based on the executive
compensation philosophy principles described earlier in this
discussion including our Compensation Committee’s
assessment of achievement of corporate performance goals during
2009 and individual executive officer performance.
Base
Salary
In February 2010, our President, Chief Executive Officer and
Director, Dr. Coles, presented his recommendations for the
executive officers’ salaries (except himself and any
executive officers hired during fiscal year 2010) to our
Compensation Committee. The salaries for 2010 represented an
average increase of 4.2% over 2009 annualized salary levels for
the executive officers (excluding Dr. Coles and any
executive officers hired during fiscal year 2010).
Dr. Coles proposed increases in salary levels for such
executive officers due to their performance, their positions
relative to the external market and consideration of their
position and compensation relative to other employees. Based on
Dr. Coles’ performance evaluation for these
individuals, comparable market data for these positions provided
by Radford and our strong performance overall, our Compensation
Committee approved Dr. Coles’ recommendations for the
executive officers.
Our Compensation Committee, in consultation with Radford, makes
compensation recommendations for the Chief Executive Officer
that must be approved by our full Board of Directors. The
recommendations made by the Compensation Committee and Radford
were based on Dr. Coles’ performance, external
comparative market data
33
and maintaining a targeted total cash compensation at the
60th percentile, resulting in Dr. Coles’ 2010
base salary increasing by 4.0% over 2009.
Annual
Incentive Bonus Program
As in 2009, the Compensation Committee reaffirmed that 80% of
the target bonus should be linked to corporate performance goals
and 20% should be linked to individual performance for executive
officers for 2010, excluding the Chief Executive Officer. For
the Chief Executive Officer 100% of the target bonus was linked
to corporate performance goals. Target bonuses for non-executive
employees are also based on individual responsibility and
performance and corporate performance with weightings for each
varying by employee level. Generally, employees with greater
responsibilities have a higher weighting on corporate
performance. Individual performance is measured by comparing
achievements for the year against the individual’s goals
and objectives. The corporate performance goals are allocated to
three components, financial, development and organizational
performance goals, with each component weighted to reflect its
significance as determined by the Compensation Committee. The
first component consists of financial performance goals for
several key financial metrics, each weighted, including sales
levels and operating expenses. The second and third components
relate to pre-specified key operational metrics for development
and organizational goals.
Weightings for each of the key metrics for each component are
determined at the beginning of the year and are reviewed and
approved by the Compensation Committee as well as the Board of
Directors. Additionally, the Compensation Committee established
a tiered system to measure achievement against the various goals
that included a threshold achievement level, a target
achievement level and a maximum achievement level for each goal.
The Compensation Committee reaffirmed that the Company had to
meet a required minimum threshold of 50% of the pre-determined
corporate performance goals in order to trigger a payout under
the plan. If the required minimum threshold is not achieved, the
annual bonus pool will not be funded. If the maximum achievement
level is met, the annual bonus pool may be funded up to a
maximum payout of 150% of the target bonus pool. The
Compensation Committee can modify actual bonus payments based on
the contributions of each executive officer to corporate
performance goals, and exercise its discretion in determining
overall achievement level
1. Financial performance goals comprised 40% of the
corporate performance goals and included achievement of three
key financial metrics, each weighted as follows:
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Global Nexavar sales, excluding Japan — 20%
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U.S. Nexavar sales — 10%
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Management of non-GAAP operating expenses — 10%
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2. Product development goals comprised 50% of the corporate
performance goals and were based on the three themes of
advancing carfilzomib, driving Nexavar development and advancing
our earlier-stage pipeline, as follows:
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Initiate first-patient, first-visit (FPFV) for the carfilzomib
ASPIRE (009) trial — 5%
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Initiate FPFV for the carfilzomib FOCUS
(011) trial — 5%
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Submit New Drug Application (NDA) for carfilzomib — 15%
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Drive Nexavar development
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Initiate FPFV for the Nexavar Phase 3 breast cancer
trial — 5%
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Topline data readout for Nexavar Phase 3 NExUS trial —
5%
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Topline data readout for Nexavar Phase 2 Hudis trial —
5%
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Advance earlier-stage pipeline
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Establish maximum tolerable dose (MTD) in the Phase 1 trial for
ONX 0801 — 2.5%
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34
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Determine pharmacokinetic (PK) profile for ONX 0912 —
2.5%
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Complete negotiations with S*BIO Pte Ltd (S*BIO) — 2.5%
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Support S*BIO in filing special protocol assessment (SPA) for
ONX 0803 program — 2.5%
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3. Organizational goals comprised the remaining 10% of the
corporate performance goals and were based on certain activities
related to our acquisition of Proteolix, Inc. (Proteolix) in
November 2009 as follows:
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Successful integration of the Proteolix team with the combined
organization — 5%
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Complete the knowledge sharing from the Proteolix team across
the combined organization — 5%
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We are not disclosing certain of our specific target objectives
or levels of achievement related to our financial goals because
we believe that their disclosure might allow our competitors to
predict certain business strategies and cause us competitive
harm. Because we are not disclosing these target objectives, we
are stating our assessment of how likely it will be for these
targets to be achieved by our executive officers. Although
achievement of our target objectives involved future performance
and, therefore, was subject to uncertainties at the time the
objectives were set, the Compensation Committee believes it
established target objectives that were achievable with an
appropriate amount of dedication and hard work and, therefore,
it was more likely than not that each executive officer would
earn a bonus under the annual incentive bonus award program at
the threshold level, consistent with our compensation
philosophy. However, our Compensation Committee believes that at
the time the objectives were set, there would be a substantial
degree of difficulty in achieving the objectives at the target
100% level and an even greater degree of difficulty in achieving
them at the stretch 150% level.
2010 achievements considered by our Compensation Committee
in assessing the level of achievement of each goal are as
follows:
Financial:
In determining whether we met our financial objectives, our
Compensation Committee considered our performance against the
three key financial metrics noting:
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Worldwide Nexavar sales, excluding Japan, were
$795.0 million;
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Nexavar U.S. revenue; and
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Non-GAAP operating expenses were $425.0 million.
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The Compensation Committee considered the negative effects of
foreign currency exchange on our financial results in 2010,
particularly as compared against prior periods. The Compensation
Committee noted that if worldwide Nexavar sales were adjusted
for the effects of foreign currency exchange, the goal would
have been achieved at the 50% level. Given that the Compensation
Committee had in prior years not adjusted the goals to remove
any positive effects of foreign currency exchange fluctuations,
the Committee determined that for consistency, it would not
adjust the 2010 goals for negative currency effects, but
acknowledged that these fluctuations were outside our control
and that absent these fluctuations, the goal would have been
achieved at the 50% level.
Development
and Strategic:
In determining our performance against the development goals,
the Compensation Committee considered the product development
goals related to advancing carfilzomib, driving Nexavar
development and advancing our earlier-stage pipeline.
The maximum achievement level was met for the ASPIRE trial as a
result of first-patient first-visit occurring in July 2010. The
ASPIRE trial is an international Phase 3 combination trial with
Revlimid in relapsed multiple myeloma, which will form the basis
of global registrations in the earlier stage of the disease.
35
Our goal of initiating enrollment in the FOCUS trial, a Phase 3
trial in Europe to evaluate patients with refractory multiple
myeloma relapsed after at least three prior regimens, was
achieved in September 2010 triggering the target achievement
level. This trial will provide data needed for European
registration of carfilzomib in treatment of late-stage multiple
myeloma patients.
Our goal to submit the NDA for carfilzomib in the U.S. by
the end of the year was delayed based on a meeting in fiscal
year 2010 with the Chemistry, Manufacturing and Controls
(CMC) review division of the U.S. Food and Drug
Administration (FDA) and, thus, did not reach the threshold
achievement level. The FDA requested additional CMC information
related to commercial-scale manufacturing of carfilzomib. Onyx
had previously anticipated filing an NDA by the end of 2010 for
accelerated approval of carfilzomib and now expects that its NDA
filing for accelerated approval could occur as early as mid-year
2011. In January 2011, the FDA approved Fast Track status for
the carfilzomib NDA, and in January 2011 we began a rolling
submission of the NDA.
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Driving Nexavar Development
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Top-line data readout for the NExUS lung cancer trial and the
Hudis breast cancer trial were presented in the second quarter
of 2010 and November 2010, respectively, which met the maximum
achievement level for and target achievement level,
respectively, for these goals.
Our goal of initiating the Phase 3 trial breast cancer
combination trial with capecitabine through first-patient,
first-visit was delayed into fiscal year 2011 and, thus, did not
reach the threshold achievement level.
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Advancing Our Earlier-Stage Pipeline
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The target achievement level was met for the Phase 1 trial of
ONX 0912, which is continuing dose escalation. Patients with
solid tumors were dosed up to 180 mg with daily-by-5 oral
administration.
We met the target achievement levels for both goals associated
with S*BIO. Our expanded agreement with S*BIO was completed in
April 2010 and our development team worked extensively with
S*BIO to support SPA submission.
Although dose-finding in our Phase 1 trial of ONX 0801
continued, MTD was not established and, thus, did not reach the
threshold achievement level.
Organizational:
Both of our organizational goals were met at the maximum
achievement levels. The successful integration of Proteolix was
measured through the completion and the subsequent results of a
performance checklist by employees across through the
organization. These data were corroborated by our annual
employee survey in August 2010, showing that Onyx had
“Global Best Practice” scores for alignment on
organizational mission. The Proteolix knowledge sharing
framework and tools were completed in first quarter 2010 with
knowledge transfer in critical areas occurring by second quarter
2010.
In February 2011, as described above, our Compensation Committee
met to review and certify the results of each corporate
performance goal to determine the corporate performance factor
at which bonuses would be achieved under the annual incentive
bonus program for 2010. Based on the achievement level
established for each metric under the financial component of the
corporate performance goals, including sales and cash flow
objectives, our actual performance was not met for two metrics
and exceeded the maximum achievement level for one metric. We
met most of the corporate performance goals related to the
development metrics and exceeded both of the goals related to
the organizational metrics. Based on the strength of our
performance against the original 2010 objectives,
36
the overall corporate performance goals would have been achieved
at a weighted average of 62.5%, which is summarized in the
following table:
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Contribution to
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Overall
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2010
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Corporate
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2010
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Performance
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Performance
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|
|
|
|
|
|
Weighting
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
Factor
|
|
|
Factor
|
|
|
Corporate Performance Category
|
|
(A)
|
|
|
50%
|
|
|
100%
|
|
|
150%
|
|
|
Actual
|
|
|
(B)
|
|
|
(A x B)
|
|
|
|
|
Financial
|
|
Total Nexavar revenue (excluding Japan)
in millions
|
|
|
20.0
|
%
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
785
|
|
|
|
0
|
%
|
|
|
0.0
|
%
|
|
|
|
Nexavar U.S. revenue in millions
|
|
|
10.0
|
%
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
0
|
%
|
|
|
0.0
|
%
|
|
|
|
Non-Operating Expense in millions
|
|
|
10.0
|
%
|
|
|
477
|
|
|
|
455
|
|
|
|
433
|
|
|
|
425
|
|
|
|
150
|
%
|
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
|
Initiate carfilzomib ASPIRE trial, FPFV
|
|
|
5.0
|
%
|
|
|
Sep.
|
|
|
|
Aug.
|
|
|
|
Jul.
|
|
|
|
Jul.
|
|
|
|
150
|
%
|
|
|
7.5
|
%
|
|
|
|
Initiate carfilzomib FOCUS trial, FPFV
|
|
|
5.0
|
%
|
|
|
Q4
|
|
|
|
Q3
|
|
|
|
Q2
|
|
|
|
Q3
|
|
|
|
100
|
%
|
|
|
5.0
|
%
|
|
|
|
Submit NDA for carfilzomib
|
|
|
15.0
|
%
|
|
|
Dec.
|
|
|
|
Nov.
|
|
|
|
Oct.
|
|
|
|
N/A
|
|
|
|
0
|
%
|
|
|
0.0
|
%
|
|
|
|
Obtain topline data readout for
NExUS trial
|
|
|
5.0
|
%
|
|
|
Q4
|
|
|
|
Q3
|
|
|
|
Q2
|
|
|
|
Q2
|
|
|
|
150
|
%
|
|
|
7.5
|
%
|
|
|
|
Obtain topline data readout for breast
cancer trial (Hudis)
|
|
|
5.0
|
%
|
|
|
Dec.
|
|
|
|
Nov.
|
|
|
|
Oct.
|
|
|
|
Nov.
|
|
|
|
100
|
%
|
|
|
5.0
|
%
|
|
|
|
Initiate Nexavar Phase 3 breastcancer
trial, FPFV
|
|
|
5.0
|
%
|
|
|
Nov.
|
|
|
|
Sep.
|
|
|
|
Jul.
|
|
|
|
Nov.
|
|
|
|
0
|
%
|
|
|
0.0
|
%
|
|
|
|
Determine PK profile for ONX 0912
|
|
|
2.5
|
%
|
|
|
Q4
|
|
|
|
Q3
|
|
|
|
Q2
|
|
|
|
Q3
|
|
|
|
100
|
%
|
|
|
2.5
|
%
|
|
|
|
Complete S*BIO negotiations
|
|
|
2.5
|
%
|
|
|
May
|
|
|
|
Apr.
|
|
|
|
Mar.
|
|
|
|
Apr.
|
|
|
|
100
|
%
|
|
|
2.5
|
%
|
|
|
|
Support S*BIO in filing special
protocal assessment for ONX 0801
program
|
|
|
2.5
|
%
|
|
|
Dec.
|
|
|
|
Nov.
|
|
|
|
Oct.
|
|
|
|
Nov.
|
|
|
|
100
|
%
|
|
|
2.5
|
%
|
|
|
|
Establish MTD in Phase 1 trial of
ONX 0801
|
|
|
2.5
|
%
|
|
|
Dec.
|
|
|
|
Nov.
|
|
|
|
Oct.
|
|
|
|
N/A
|
|
|
|
0
|
%
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organizational
|
|
Successful integration of Proteolix, Inc.
|
|
|
5.0
|
%
|
|
|
Q3
|
|
|
|
Q2
|
|
|
|
Q1
|
|
|
|
Q1
|
|
|
|
150
|
%
|
|
|
7.5
|
%
|
|
|
|
Completion of Proteolix, Inc. asset
knowledge sharing
|
|
|
5.0
|
%
|
|
|
Q4
|
|
|
|
Q3
|
|
|
|
Q2
|
|
|
|
Q2
|
|
|
|
150
|
%
|
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall Corporate Performance Factor
|
|
|
62.5
|
%
|
|
|
|
|
|
*
|
|
Competitively harmful information. We are not disclosing certain
of the specific target objectives or actual achievement levels
because we believe that their disclosure might allow our
competitors to predict certain business strategies and would
cause us competitive harm.
|
The Compensation Committee then considered the following
additional factors that were not pre-specified as corporate
goals:
|
|
|
|
|
|
•
|
We licensed rights to carfilzomib in Japan to Ono, which was
strategically important to us and also provided financial
support for our operations, given the $59.2 million
up-front cash payment Ono made to us in connection with that
transaction. In addition, potential future milestone and
development support payments that the Company may receive from
Ono could total up to $283.5 million.
|
|
|
|
|
•
|
The price of our common stock performed well in 2010, relative
to the NASDAQ Biotechnology Index.
|
|
|
|
|
•
|
The management team has been strengthened in 2010 with the
addition of the Senior Vice President, Global Human Resources as
well as the Executive Vice President and Head of
Research & Development.
|
The Committee recognized that these additional factors were not
anticipated at the beginning of 2010 when corporate objectives
were established for the year, and were, therefore, not included
in the 2010 corporate goals. Nonetheless, the Committee
concluded that these additional accomplishments were significant
to our 2010 corporate performance, and specifically attributable
to the performance of our management team and employees. In an
effort to align incentive compensation with our corporate
results, the Committee exercised its discretion with regard to
the corporate goals and positively adjusted the achievement of
corporate performance by 4.5%, in recognition of the these
additional unplanned stretch achievements.
The Committee determined that our corporate performance for the
year, against the target achievement levels, and as adjusted for
extraordinary additional accomplishments, was 67%. The
Compensation Committee determined that a 67% payout reflected
our actual performance for the year against its target
achievement level. As specified above, 80% of the named
executive officers’ 2010 target bonus, other than the Chief
Executive Officer’s, was linked to corporate
37
performance goals with the remaining 20% linked to individual
achievements. Therefore, the 80% of the target bonus linked to
corporate performance goals would be paid out at 67% and the 20%
of the target bonus linked to individual achievements was paid
out between 90% and 120%, depending on the individual’s
level of achievement. Assessment of individual achievements was
based on individual goals and performance by the Chief Executive
Officer, Compensation Committee and Board of Directors. For the
Chief Executive Officer, 100% of his target bonus was linked to
corporate performance goals, and, therefore,
Dr. Coles’ target bonus was paid out at 67% of the
target level.
The Compensation Committee established categories of individual
goals in which executive officers, other than the Chief
Executive Officer, were expected to make measurable achievement,
but did not establish specific performance measurement metrics
for each goal. For 2010, 80% of the target bonus was linked to
corporate performance goals and 20% to individual performance
for executive officers, excluding the Chief Executive Officer.
For the fiscal year 2010, the performance goals taken into
consideration to determine the individual performance factor
scores for each named executive officer, excluding the Chief
Executive Officer, were as follows:
|
|
|
|
|
Name
|
|
Individual 2010 Goals
|
|
|
Matthew K. Fust
Executive Vice President and Chief Financial Officer
|
|
• Complete site selection and Board
approval for new corporate headquarters
• Execute on financing efforts with
partners, both strategic and financial, to support development
portfolio by September 30, 2010
• Evaluate and implement new systems
platforms to enable the Company’s growth
• Structure the Finance team to enable
support to the organization for carfilzomib launch
• Implement process and strategies to
strengthen the Company’s position in the Bayer
collaboration
• Establish European headquarters to
support international expansion
|
|
|
|
|
Laura A. Brege
Executive Vice President, Corporate Affairs
|
|
• Create the Government Affairs
capability within the Company
• Develop a strategic plan for
carfilzomib launch and global expansion
• Establish a Portfolio and Life-Cycle
Management Process
• Ensure effective integration of the
Proteolix acquisition
|
|
|
|
|
Kaye Foster-Cheek
Senior Vice President, Global Human Resources
|
|
• Develop an organizational
architecture, governance model and implementation strategy for
global expansion
• Re-engineer the talent acquisition
process
• Lead Human Resources components for the
corporate headquarters relocation strategy
• Build critical talent
|
|
|
|
|
Ted W. Love, M.D.
Executive Vice President, Research &
Development
and Technical Operations
|
|
• Scale up the research and development
capabilities to deliver pipeline progress
• Establish a world-class scientific
advisory board
• Collaborate with Investor Relations to
enhance the Company’s external exposure
• Ensure research and development spend
correlates with delivering projects on time and on budget
• Provide medical and scientific
leadership to corporate development evaluation of strategic
opportunities
|
38
The Chief Executive Officer made recommendations regarding the
executive officers’ achievement of their individual
performance goals to the Compensation Committee, and in
determining the actual level of achievement, as with any
personnel evaluation, applied judgment and discretion and
carefully weighed individual achievements in each category. In
his assessment, Dr. Coles evaluated each executive
officer’s specific accomplishments against the established
objectives as well as the impact of those accomplishments on our
overall performance.
Mr. Fust’s notable achievements in 2010 were
completion of a transaction enabling a move to one consolidated
facility, implementing a foreign exchange hedging strategy and
partnering with Corporate Development to secured funding for
pipeline development, development of a multi-year IT
implementation plan and establishing Zug, Switzerland as the
Company’s European headquarters to support international
expansion. Based on these achievements, Dr. Coles
recommended an individual performance factor of 100% for
Mr. Fust.
For 2010, Ms. Brege’s primary achievements resulted in
the establishment of a governmental affairs office expanding
Onyx’s capabilities and reach, bringing on key talent in
the product life-cycle area, strengthening our position in the
Bayer litigation, and developing our European Union expansion
strategy across the organization. Offsetting
Ms. Brege’s success in the above areas was the
decision to delay filing the NDA for carfilzomib due to CMC
issues, causing Dr. Coles to recommend an individual
performance factor of 90% for Ms. Brege based on the above
factors.
Ms. Foster-Cheek joined Onyx on September 30, 2010 and
was not part of the corporate and individual goal setting
process at the beginning of the year. Dr. Coles directed
Ms. Foster-Cheek to lead an organizational assessment of
the Onyx leadership architecture to ensure alignment with the
corporate challenges in 2011 and beyond. The new architecture
was presented to the Board of Directors with implementation
approved for the first quarter 2011. Additionally,
Ms. Foster-Cheek redesigned the talent acquisition strategy
and process to improve talent quality and time to hire. Based on
her accomplishments, Dr. Coles recommended an individual
performance factor of 120%.
Dr. Love joined Onyx on February 1, 2010. His
leadership in assessing talent gaps and attracting new
executives to the Company has positioned Onyx for its next phase
of growth. His contributions during corporate development
activities were extremely valuable to Dr. Coles and the
other Executive Officers. Dr. Love’s focused
management of the research and development organization led to
the initiation of two Phase 3 trials (ASPIRE and FOCUS) and the
acceleration of the development for ONX 0912, both of which also
contributed to the achievement of the pre-specified corporate
development goals noted above. Based on his accomplishments Dr.
Coles recommended an individual performance factor of 100%.
Dr. Coles presented his assessment and recommendation for
individual performance factor scores for each executive officer
to the Compensation Committee, based on each executive
officer’s achievement of his or her individual objectives
as well as significant unplanned results. Based on an
independent evaluation of each of the executive officer’s
individual achievements compared to their objectives and taking
into consideration Dr. Coles’ assessments and
recommendations for each executive officer, the Compensation
Committee determined and approved individual performance factor
scores for each of the executive officers, concluding that
individuals’ accomplishments in all cases substantially met
the Compensation Committee’s expectations at or near the
target level and in the case of Ms. Foster-Cheek, exceeded
the target expectations. Accordingly, the Compensation Committee
approved individual performance factors for Mr. Fust,
Ms. Brege, Ms. Foster-Cheek and Dr. Love of 100%,
90%, 120% and 100%, respectively.
39
The following chart summarizes the total bonus payment and
company and individual performance weightings used to calculate
the total bonus payment to each named executive officer for
performance during fiscal year 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Bonus
|
|
|
|
|
|
Corporate Performance
|
|
|
Individual Performance
|
|
|
|
|
|
Total Bonus
|
|
Named Executive
|
|
(as a % of
|
|
|
Target
|
|
|
Performance
|
|
|
|
|
|
Performance
|
|
|
|
|
|
Total Bonus
|
|
|
Payment (as a
|
|
|
Officer
|
|
Salary)
|
|
|
Bonus
|
|
|
Factor (1)
|
|
|
Weighting
|
|
|
Factor
|
|
|
Weighting
|
|
|
Payment
|
|
|
% of Target)
|
|
|
|
|
N. Anthony Coles, M.D.
|
|
|
100
|
%
|
|
$
|
676,000
|
|
|
|
67
|
|
|
|
100
|
%
|
|
|
0
|
|
|
|
0
|
%
|
|
$
|
452,920
|
|
|
|
67
|
%
|
|
Matthew K. Fust
|
|
|
50
|
%
|
|
$
|
217,350
|
|
|
|
67
|
|
|
|
80
|
%
|
|
|
100
|
|
|
|
20
|
%
|
|
$
|
159,970
|
|
|
|
74
|
%
|
|
Laura A. Brege
|
|
|
50
|
%
|
|
$
|
237,600
|
|
|
|
67
|
|
|
|
80
|
%
|
|
|
90
|
|
|
|
20
|
%
|
|
$
|
170,122
|
|
|
|
72
|
%
|
|
Kaye Foster-Cheek (2)
|
|
|
45
|
%
|
|
$
|
38,250
|
|
|
|
67
|
|
|
|
80
|
%
|
|
|
120
|
|
|
|
20
|
%
|
|
$
|
30,251
|
|
|
|
79
|
%
|
|
Ted W. Love, M.D. (3)
|
|
|
50
|
%
|
|
$
|
222,292
|
|
|
|
67
|
|
|
|
80
|
%
|
|
|
100
|
|
|
|
20
|
%
|
|
$
|
163,321
|
|
|
|
73
|
%
|
|
|
|
|
|
(1)
|
|
The Corporate Performance Factor of 67 is based on 62.5 for
performance against the target achievement levels for
established corporate goals plus 4.5 for performance against
additional unplanned achievements.
|
|
|
|
(2)
|
|
Ms. Foster-Cheek’s target bonus and total bonus
payment was pro-rated based on her start date of
September 30, 2010.
|
|
|
|
(3)
|
|
Dr. Love’s target bonus and total bonus payment was
pro-rated based on his start date of February 1, 2010.
|
Executive
Equity Compensation
In December 2007, the Compensation Committee reviewed and
discussed the Company’s equity compensation program,
including a comparison against companies in our peer group and
the Company’s philosophy with regard to granting a mix of
stock options and restricted stock grants. The target mix of
stock options to restricted shares for vice presidents and above
as part of their annual award is 70% stock options and 30%
restricted stock. In addition, the Compensation Committee has
delegated to management the option, at their discretion, to
offer a 70% stock option and 30% restricted stock mix to vice
presidents and above upon hire. Equity compensation for ongoing
executive officer grants is targeted at the
50th percentile. In determining an executive officer’s
award and where it is positioned relative to the
50th percentile, the Committee examines market benchmark
data focusing on ongoing equity grant values based on the
Black-Scholes model, grant levels as a percent of total
outstanding shares and absolute number of shares granted. In
addition to specific annual grant benchmark data, the Committee
also considers where an executive’s total equity ownership
is positioned relative to the peer group as well as the
retention value of an executive’s existing equity holdings
when determining the appropriate size of ongoing equity awards.
Executive
Officer Hires
Ted W. Love, M.D., Executive Vice President, Head of
Research & Development and Technical Operations
On February 1, 2010, Ted W. Love, M.D., was appointed
Executive Vice President, Head of Research &
Development at Onyx. Under the terms of an at-will employment
agreement entered into between Onyx and Dr. Love on
January 28, 2010, Dr. Love received an initial base
salary of $485,000 per year and is eligible to receive an annual
cash bonus targeted at 50% of his base salary, dependent on
Onyx’s achievement of its corporate performance targets, as
determined by the Board of Directors of Onyx. Onyx granted
Dr. Love an option to purchase 115,500 shares of Onyx
common stock and 16,500 shares of restricted common stock
of Onyx. The option grant will vest and become exercisable over
four years with 25% of the shares vesting and becoming
exercisable on the first year anniversary of the grant date and
the remaining 75% vesting and becoming exercisable in 36 equal
monthly installments thereafter. The restricted shares will vest
in a series of three successive equal annual installments over
the three-year period commencing from the grant date. The
restricted stock and option vesting are subject to
Dr. Love’s continued employment with Onyx.
Dr. Love’s compensation package was intended to be
consistent with our total compensation philosophy while taking
into consideration Dr. Love’s individual attributes
and breadth of experience.
Kaye
Foster-Cheek, Senior Vice President, Global Human
Resources
On September 30, 2010, Kaye Foster-Cheek was appointed
Senior Vice President, Global Human Resources at Onyx. Under the
terms of an at-will employment agreement entered into between
Onyx and Ms. Foster-Cheek on
40
September 30, 2010, Ms. Foster-Cheek received an
initial base salary of $340,000 per year and is eligible to
receive an annual cash bonus targeted at 45% of her base salary,
dependent on Onyx’s achievement of its corporate
performance targets, as determined by the Board of Directors of
Onyx. Onyx granted Ms. Foster-Cheek $300,000 for relocation
expenses, monthly housing assistance in the amount of $3,250 for
the first thirty months of employment, an option to purchase
91,000 shares of Onyx common stock, 13,000 shares of
restricted common stock of Onyx and 4,800 shares of
performance-based restricted common stock of Onyx. The option
grant will vest and become exercisable over four years with 25%
of the shares vesting and becoming exercisable on the first year
anniversary of the grant date and the remaining 75% vesting and
becoming exercisable in 36 equal monthly installments
thereafter. The restricted shares will vest in a series of three
successive equal annual installments over the three-year period
commencing from the grant date. The performance-based restricted
shares will vest in full on the closing date of
Ms. Foster-Cheek’s purchase of a residence in the
San Francisco Bay Area. The restricted stock and option
vesting are subject to Ms. Foster-Cheek’s continued
employment with Onyx. Ms. Foster-Cheek’s compensation
package was intended to be consistent with our total
compensation philosophy while taking into consideration
Ms. Foster-Cheek’s individual attributes and breadth
of experience.
Executive
Compensation Summary
The following table summarizes our approved 2010 salaries,
annual incentive target bonus percentages and equity awards for
our named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 Executive Compensation Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Incentive Bonus
|
|
|
Number of Stock
|
|
|
Restricted Shares
|
|
|
Name
|
|
Base Salary
|
|
|
Target
|
|
|
Options Awarded (1)
|
|
|
Awarded (1)
|
|
|
|
|
N. Anthony Coles, M.D.
|
|
$
|
676,000
|
|
|
|
100
|
%
|
|
|
147,000
|
|
|
|
21,000
|
|
|
Matthew K. Fust
|
|
$
|
434,700
|
|
|
|
50
|
%
|
|
|
45,500
|
|
|
|
6,500
|
|
|
Laura A. Brege
|
|
$
|
475,200
|
|
|
|
50
|
%
|
|
|
56,000
|
|
|
|
8,000
|
|
|
Kaye Foster-Cheek (2)
|
|
$
|
340,000
|
|
|
|
45
|
%
|
|
|
91,000
|
|
|
|
17,800
|
|
|
Ted W. Love, M.D. (3)
|
|
$
|
485,000
|
|
|
|
50
|
%
|
|
|
115,500
|
|
|
|
16,500
|
|
|
|
|
|
|
(1)
|
|
Stock option and restricted stock award amounts were approved by
the Compensation Committee and, then, ratified by the Board of
Directors on February 3, 2010 and were granted to such
“named executive officers” on March 31, 2010.
Stock option awards had an exercise price of $30.28.
|
|
|
|
(2)
|
|
Ms. Kaye Foster-Cheek’s stock option and restricted
share awards were granted on her date of hire,
September 30, 2010, and stock option awards had an exercise
price of $26.38.
|
|
|
|
(3)
|
|
Dr. Love’s stock option and restricted share awards
were granted on his date of hire, February 1, 2010, and
stock option awards had an exercise price of $28.62.
|
2011
Executive Officer Compensation
In February 2011, our Compensation Committee and our Board of
Directors approved 2011 base salaries, stock option grants and
restricted stock awards to the executive officers. Salary
increases were made effective as of January 1, 2011. In
December 2010, the Compensation Committee approved the 2011
annual incentive target bonus percentages. These decisions were
based on the executive compensation philosophy principles
described earlier in this discussion, including our Compensation
Committee’s assessment of achievement of corporate
performance goals during 2010.
41
Executive
Compensation Summary
The following table summarizes our approved 2011 salaries,
targeted annual incentive bonuses and equity awards for our
named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 Executive Compensation Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
Incentive
|
|
|
Number of Stock
|
|
|
Restricted Shares
|
|
|
Restricted Stock
|
|
|
Name
|
|
Base Salary
|
|
|
Bonus Target
|
|
|
Options Awarded (1)
|
|
|
Awarded (1)
|
|
|
Units Awarded (1)
|
|
|
|
|
N. Anthony Coles, M.D.
|
|
$
|
701,000
|
|
|
|
100
|
%
|
|
|
105,000
|
|
|
|
15,000
|
|
|
|
50,000
|
|
|
Matthew K. Fust
|
|
$
|
452,100
|
|
|
|
50
|
%
|
|
|
42,000
|
|
|
|
6,000
|
|
|
|
22,500
|
|
|
Laura A. Brege
|
|
$
|
487,100
|
|
|
|
50
|
%
|
|
|
35,000
|
|
|
|
5,000
|
|
|
|
22,500
|
|
|
Kaye Foster-Cheek
|
|
$
|
343,500
|
|
|
|
45
|
%
|
|
|
28,000
|
|
|
|
4,000
|
|
|
|
12,500
|
|
|
Ted W. Love, M.D.
|
|
$
|
506,500
|
|
|
|
50
|
%
|
|
|
42,000
|
|
|
|
6,000
|
|
|
|
22,500
|
|
|
|
|
|
|
(1)
|
|
Stock option, restricted shares, and restricted stock unit award
amounts were approved by the Compensation Committee and, then,
ratified by the Board of Directors on February 3, 2011 and
were granted to such “named executive officers” on
March 31, 2011. Restricted stock unit awards are
performance-based with vesting contingent upon the Compensation
Committee’s approval that specific performance goals have
been met within specified time periods. If the goals are not
met, the restricted share units will expire unvested.
|
Post-Employment
Obligations
Dr. Coles’
Severance Arrangement
On February 22, 2008, we entered into an employment
agreement with Dr. Coles setting forth the terms and
conditions of his appointment as President and Chief Executive
Officer and setting forth the payments and benefits in the event
that his employment is terminated without cause in a
non-change-in-control circumstance. The severance payments and
benefits in such a circumstance include 36 months of his
current base salary, payment of COBRA medical insurance coverage
premiums consistent with his current coverage for
18 months, up to 18 months accelerated vesting of
equity awards granted under his employment agreement that are
subject to time based vesting and 12 months to exercise
vested stock options.
Executive
Severance Benefit Plan
On December 3, 2008, the Board of Directors adopted an
Executive Severance Benefit Plan (the “Severance
Plan”), pursuant to which current and future
Section 16(b) officers, as defined by the Securities
Exchange Act of 1934, of Onyx, excluding Dr. Coles, will be
eligible to participate and receive severance benefits under
certain circumstances. Under the Severance Plan, if a
participating executive officer is involuntarily terminated
without cause, or constructively terminated, both as defined in
the Severance Plan, then the Executive will be entitled to
receive (a) cash severance in a lump sum amount equal to up
to one year’s base salary, (b) up to 12 months of
benefits to continue his or her current health insurance
coverage and (c) up to six months following termination to
exercise vested stock options. The Severance Plan does not
supersede any individually negotiated employment agreement.
Dr. Coles’
Change-in-Control
Severance Agreement
On February 22, 2008, the Company entered into an
employment agreement, including an Executive
Change-in-Control
Severance Benefits Agreement (the “Agreement”), with
Dr. Coles. Pursuant to the Agreement, if
Dr. Coles’ employment with the Company terminates due
to an “involuntary termination without cause” or a
“constructive termination,” as those terms are defined
in the Agreement, in either case within 24 months following
the effective date of a
“change-in-control”
(defined in the Agreement) Dr. Coles will receive the
following benefits:
|
|
|
|
|
|
•
|
a lump sum cash payment equal to four times his base salary;
|
|
|
|
|
•
|
payment of his projected COBRA premiums for a period of
24 months in a lump sum;
|
|
|
|
|
•
|
continuation of payment of his premiums for group life insurance
for 24 months or until such earlier date he shall secure
subsequent employment that shall provide him with life insurance
benefits;
|
42
|
|
|
|
|
|
•
|
payment for his outplacement services for a period of one year
following termination, not to exceed $40,000;
|
|
|
|
|
•
|
all stock awards granted to him on or after the effective date
of the Agreement will vest in full and he will have
12 months following termination to exercise these stock
awards; and
|
|
|
|
|
•
|
in the event that any severance benefits paid pursuant to the
Agreement would constitute a “parachute payment”
within the meaning of Section 280G of the Internal Revenue
Code and would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code (the “Excise
Tax”), he shall be entitled to a
“gross-up
payment” (defined in the Agreement). Notwithstanding the
foregoing, no
gross-up
payment will be paid if a reduction in parachute payments by 10%
would cause no Excise Tax to be imposed on him.
|
Executive
Change-in-Control
Severance Benefits Agreement
On June 4, 2008, the Compensation Committee of the Board of
Directors amended the Executive
Change-in-Control
Severance Benefits Agreement (the “CIC Agreement”).
The amended form of the CIC Agreement is intended to comply with
new tax regulations and to simplify the calculation of any lump
sum cash severance. Subject to limited exceptions, we have
entered into a CIC Agreement with our Executive Vice Presidents,
Senior Vice Presidents and Vice Presidents (each an
“Executive”). Except as provided in the CIC Agreement
and explained below, the CIC Agreement supersedes any other
policy, plan, program or arrangement relating to severance
benefits payable by the Company to the Executive. Under the CIC
Agreement, if an Executive’s employment with the Company
terminates due to an “involuntary termination without
cause” or a “constructive termination,” as those
terms are defined in the CIC Agreement, in either case within
24 months following the effective date of a
“change-in-control”
(defined in the CIC Agreement), an Executive will receive the
following benefits:
|
|
|
|
|
|
•
|
a lump sum cash payment as follows: Executive Vice President and
Senior Vice President — 26 months of base salary;
and Vice President — 16 months of base salary;
|
|
|
|
|
•
|
payment of the projected COBRA premiums for Executives for such
period of time determined by position as follows, or until such
earlier date as the Executive shall secure subsequent employment
that shall provide the Executive with health benefits: Executive
Vice President and Senior Vice President —
18 months; and Vice President — 12 months;
|
|
|
|
|
•
|
continuation of payment of the premiums for the Executive’s
group life insurance for the number of months determined by
position as follows, or until such earlier date as the Executive
shall secure subsequent employment that shall provide the
Executive with life insurance benefits: Executive Vice President
and Senior Vice President — 18 months; and Vice
President — 12 months;
|
|
|
|
|
•
|
payment for outplacement services for the Executive for a period
of one year following termination, not to exceed $25,000 for
Executive Vice Presidents and Senior Vice Presidents and $15,000
for Vice Presidents;
|
|
|
|
|
•
|
all stock awards granted to the Executive and that are governed
by the CIC Agreement will vest in full and the Executive will
have 12 months following termination to exercise these
stock awards (unless the stock award term expires prior to that
time, in which case to the end of the stock award term); and
|
|
|
|
|
•
|
in the event that any severance benefits paid pursuant to the
CIC Agreement would constitute a “parachute payment”
within the meaning of Section 280G of the Internal Revenue
Code and would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code (the “Excise
Tax”), the Executive Vice Presidents and Senior Vice
Presidents shall be entitled to a
“gross-up
payment” (defined in the CIC Agreement). Notwithstanding
the foregoing, no
gross-up
payment will be paid if a reduction in parachute payments by 10%
would cause no Excise Tax to be imposed on an Executive.
|
Certain stock awards (the “Prior Stock Awards”) held
by Executives remain subject to a predecessor executive change
in control severance benefits agreement (the “Predecessor
Agreement”) and continue to be governed by the Predecessor
Agreement. The vesting of the Prior Stock Awards shall
accelerate as follows:
|
|
|
|
|
|
•
|
in the event of a
“change-in-control”
(defined in the CIC Agreement), the vesting of 50% of the Prior
Stock Awards shall be accelerated and shall be exercisable for
12 months following any subsequent termination of
|
43
|
|
|
|
|
|
|
the Executive’s employment (unless the Prior Stock Award
term expires prior to that time, in which case to the end of the
Prior Stock Award term); and
|
|
|
|
|
|
|
•
|
if an Executive’s employment with the Company terminates
due to an “involuntary termination without cause” or a
“constructive termination,” as those terms are
restated in the CIC Agreement, in either case within
13 months following a “change in control,” the
Prior Stock Award will vest in full and the Executive will have
12 months following termination in which to exercise the
Prior Stock Award (unless the Prior Stock Award term expires
prior to that time, in which case to the end of the Prior Stock
Award term).
|
Eligibility for the change of control and severance benefits
summarized in the section titled “
Post-Employment
Obligations
” is contingent upon execution of a general
release by the individual upon his or her termination.
Potential
Payments Upon Termination —
Change-in-Control
The table below identifies the potential payments that each of
our Named Executive Officers would have received in the event of
a termination without cause or constructive termination (as
defined in the respective agreements) in connection with a
change in control or a termination without cause or constructive
termination absent a change in control. The figures below assume
that the transaction or termination occurred on
December 31, 2010. All of the potential payments listed in
the table below are payments that would have been made pursuant
to the terms of the our Executive Severance Benefit Plan or
Executive Change in Control Severance Benefits Agreement
discussed above under the heading “Post-Employment
Obligations,” except for the potential payments to
Dr. Coles’ for which potential payment would be made
pursuant to the terms of Dr. Coles’ Employment
Agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Vesting
|
|
|
|
|
|
|
|
Relocation
|
|
|
|
|
|
|
|
Stock
|
|
Restricted
|
|
Severance
|
|
Continuation of
|
|
Outplacement
|
|
Payment
|
|
Tax Gross-Up
|
|
|
|
Name
|
|
Options (1)
|
|
Stock
|
|
Payment (2)
|
|
Benefits (3)
|
|
Services
|
|
Forgiveness (4)
|
|
Payments
|
|
Total
|
|
|
|
N. Anthony Coles, M.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without cause (5)
|
|
$
|
1,548,374
|
|
|
$
|
1,499,376
|
|
|
$
|
2,028,000
|
|
|
$
|
37,024
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,112,774
|
|
|
Termination in connection
with a
Change-in-Control (6)
|
|
|
2,135,987
|
|
|
|
1,757,428
|
|
|
|
2,704,000
|
|
|
|
49,366
|
|
|
|
40,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,686,781
|
|
|
Matthew K. Fust
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without cause (7)
|
|
|
—
|
|
|
|
—
|
|
|
|
434,700
|
|
|
|
6,382
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
441,082
|
|
|
Termination in connection
with a
Change-in-Control (8)
|
|
|
361,257
|
|
|
|
571,473
|
|
|
|
941,850
|
|
|
|
9,573
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,909,153
|
|
|
Laura A. Brege
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without cause (7)
|
|
|
—
|
|
|
|
—
|
|
|
|
475,200
|
|
|
|
24,683
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
499,883
|
|
|
Termination in connection
with a
Change-in-Control (8)
|
|
|
733,688
|
|
|
|
540,720
|
|
|
|
1,029,600
|
|
|
|
37,024
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,366,032
|
|
|
Kaye Foster-Cheek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without cause (7)
|
|
|
—
|
|
|
|
—
|
|
|
|
340,000
|
|
|
|
540
|
|
|
|
—
|
|
|
|
75,000
|
|
|
|
—
|
|
|
|
415,540
|
|
|
Termination in connection
with a
Change-in-Control (8)
|
|
|
954,590
|
|
|
|
479,309
|
|
|
|
736,667
|
|
|
|
810
|
|
|
|
25,000
|
|
|
|
75,000
|
|
|
|
—
|
|
|
|
2,271,376
|
|
|
Ted W. Love
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without cause (7)
|
|
|
—
|
|
|
|
—
|
|
|
|
485,000
|
|
|
|
24,683
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
509,683
|
|
|
Termination in connection
with a
Change-in-Control (8)
|
|
|
952,875
|
|
|
|
608,353
|
|
|
|
1,050,833
|
|
|
|
37,024
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,674,085
|
|
|
|
|
|
|
(1)
|
|
The amounts listed in these columns represent the Black-Scholes
conversion value of the acceleration of vesting of stock options
under our Executive Change in Control Severance Benefits
Agreement and are based on the closing price of our common stock
on December 31, 2010, which was $36.87.
|
|
|
|
(2)
|
|
The amounts listed in this column do not include the payment of
accrued salary and vacation that would be due upon termination
of employment.
|
|
|
|
(3)
|
|
Represents the present value of the continuation of our current
employee benefits, including medical, dental, disability and
life insurance.
|
|
|
|
(4)
|
|
In the event of termination without cause or constructive
termination, the $75,000 relocation payment made to Ms.
Foster-Cheek in connection with her relocation to the San
Francisco Bay Area would not be required to be repaid.
|
44
|
|
|
|
|
(5)
|
|
The amounts in this row represent the potential payments that
would be due to Dr. Coles under his employment agreement if
we were to terminate his employment without “Cause”
and not in connection with a Change in Control. The severance
payment is based on Dr. Coles’ 2010 annual base salary.
|
|
|
|
(6)
|
|
The amounts in this row were determined (a) on the
assumption that a “Change in Control” under our
retention plan occurred and a Triggering Termination occurred
with respect to Dr. Coles’ employment and
(b) using the same salary assumptions set forth in
note 5.
|
|
|
|
(7)
|
|
The amounts in this row represent the potential payments that
would be due under the Onyx Pharmaceuticals, Inc. Executive
Severance Benefit Plan if we were to terminate the
Executive’s employment without “Cause” and not in
connection with a Change in Control. The severance payment is
based on the Executive’s 2010 annual base salary.
|
|
|
|
(8)
|
|
The amounts in this row were determined on the assumption that
“Change in Control” under our Executive Change in
Control Severance Benefits Agreement occurred and a Covered
Termination (as defined in those agreements) occurred with
respect to the Executive’s employment. The severance amount
is based on the Executive’s 2010 annual base salary and
2010 target bonus amount.
|
45
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The following table shows compensation information for the
fiscal years ended December 31, 2010, 2009 and 2008 for the
Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Plan Comp
|
|
|
Compensation
|
|
|
Total
|
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
N. Anthony Coles, M.D.
|
|
|
2010
|
|
|
$
|
676,000
|
|
|
|
30,420
|
|
|
|
635,880
|
|
|
|
2,044,505
|
|
|
|
422,500
|
|
|
|
94,846
|
(3)
|
|
$
|
3,904,151
|
|
|
Chairman, President
|
|
|
2009
|
|
|
$
|
650,000
|
|
|
|
—
|
|
|
|
1,002,650
|
(4)
|
|
|
1,579,095
|
|
|
|
780,000
|
|
|
|
124,790
|
|
|
$
|
4,136,535
|
|
|
and Chief Executive Officer
|
|
|
2008
|
|
|
$
|
471,134
|
|
|
|
200,000
|
|
|
|
1,741,800
|
(4)
|
|
|
5,351,675
|
|
|
|
625,000
|
|
|
|
102,810
|
|
|
$
|
8,492,419
|
|
|
Matthew K. Fust
|
|
|
2010
|
|
|
$
|
434,700
|
|
|
|
7,825
|
|
|
|
196,820
|
|
|
|
632,823
|
|
|
|
152,145
|
|
|
|
4,790
|
(5)
|
|
$
|
1,429,103
|
|
|
Executive Vice President and
|
|
|
2009
|
|
|
$
|
417,000
|
|
|
|
100,000
|
|
|
|
465,480
|
|
|
|
1,704,497
|
|
|
|
219,000
|
|
|
|
4,765
|
|
|
$
|
2,910,742
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laura A. Brege
|
|
|
2010
|
|
|
$
|
475,200
|
|
|
|
8,554
|
|
|
|
242,240
|
|
|
|
778,859
|
|
|
|
161,568
|
|
|
|
5,018
|
(6)
|
|
$
|
1,671,439
|
|
|
Executive Vice
|
|
|
2009
|
|
|
$
|
452,600
|
|
|
|
—
|
|
|
|
199,850
|
|
|
|
736,911
|
|
|
|
244,000
|
|
|
|
5,018
|
|
|
$
|
1,638,379
|
|
|
President, Corporate Affairs
|
|
|
2008
|
|
|
$
|
425,000
|
|
|
|
—
|
|
|
|
174,180
|
|
|
|
948,011
|
|
|
|
187,425
|
|
|
|
1,518
|
|
|
$
|
1,736,134
|
|
|
Kaye Foster-Cheek
|
|
|
2010
|
|
|
$
|
86,288
|
|
|
|
1,398
|
|
|
|
469,564
|
(7)
|
|
|
1,130,957
|
|
|
|
28,853
|
|
|
|
86,553
|
(8)
|
|
$
|
1,803,613
|
|
|
Senior Vice President,
Global Human Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ted W. Love, M.D.
|
|
|
2010
|
|
|
$
|
444,584
|
|
|
|
8,003
|
|
|
|
472,230
|
|
|
|
1,523,168
|
|
|
|
155,318
|
|
|
|
4,891
|
(9)
|
|
$
|
2,608,194
|
|
|
Executive Vice President, Research & Development and
Technical Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This column represents the grant date fair values as determined
pursuant to ASC Topic 718 for stock awards granted with respect
to the 2010, 2009 and 2008 fiscal years, as applicable. For
additional information, refer to the notes of the Onyx financial
statements in the
Form 10-K
for the years ended December 31, 2010, 2009 and 2008. See
the Grants of Plan-Based Awards Table for information regarding
stock awards granted in 2010. These amounts reflect the fair
value determined in accordance with ASC Topic 718 and do not
correspond to the actual value that will be recognized by the
named executives.
|
|
|
|
(2)
|
|
This column represents the grant date fair values as determined
pursuant to ASC Topic 718 for stock options granted with respect
to the 2010, 2009 and 2008 fiscal years, as applicable. For
additional information, refer to the notes of the Onyx financial
statements in the
Form 10-K
for the years ended December 31, 2010, 2009 and 2008. See
the Grants of Plan-Based Awards Table for information regarding
stock options granted in 2010. These amounts reflect the fair
value determined in accordance with ASC Topic 718 and do not
correspond to the actual value that will be recognized by the
named executives.
|
|
|
|
(3)
|
|
This amount consists of (a) Onyx’s payment on behalf
of Dr. Coles’ of $1,518 in group term life insurance
premiums, (b) Onyx’s matching contributions of $3,500
to Dr. Coles’ 401(k) account, (c) $80,000 in
housing allowance, (d) $300 in wellness payments and
(e) $9,528 in relocation expenses.
|
|
|
|
(4)
|
|
This amount includes the grant date fair values of $574,400 and
$290,300 as determined pursuant to ASC Topic 718 for
performance-based restricted stock awards granted to
Dr. Coles in the fiscal years 2009 and 2008, respectively.
The grant date fair values based upon the highest level of
performance of these awards are the same as the grant date fair
values. In 2009, Dr. Coles was granted a restricted stock
award for 20,000 shares in connection with the modification
of our employment agreement with him in March 2009. The award
vested immediately upon the closing of Dr. Coles’
purchase of a home in the San Francisco Bay Area. If
Dr. Coles had not purchased a home in the
San Francisco Bay Area within 18 months of the grant,
then the grant would have lapsed entirely and would not have
vested. In 2008, Dr. Coles was granted a restricted stock
award for 10,000 shares in connection with our employment
agreement with him. The award vested over a two-year period
measured from his start date and is subject to the achievement
of targeted global net sales of Nexavar, the completion of a
strategic transaction by March 31, 2009, staffing of the
Company’s corporate development organization and other
performance objectives as determined by the Board upon
recommendation of the Compensation Committee. As of
March 31, 2010, the entire 10,000 shares had vested as
result of the achievement of the pre-established criteria.
|
47
|
|
|
|
|
(5)
|
|
This amount consists of (a) Onyx’s payment on behalf
of Mr. Fust of $990 in group term life insurance premiums,
(b) Onyx’s matching contributions of $3,500 to
Mr. Fust’s 401(k) account and (c) $300 in
wellness payments.
|
|
|
|
(6)
|
|
This amount consists of (a) Onyx’s payment on behalf
of Ms. Brege of $1,518 in group term life insurance
premiums and (b) Onyx’s matching contributions of
$3,500 to Ms. Brege’s 401(k) account.
|
|
|
|
(7)
|
|
This amount includes the grant date fair value of $126,624 as
determined pursuant to ASC Topic 718 for a performance-based
restricted stock award granted to Ms. Foster-Cheek in the
fiscal years 2010. The grant date fair value based upon the
highest level of performance of this award is the same as the
grant date fair value. In 2010, Ms. Foster-Cheek was
granted a restricted stock award for 4,800 shares in
connection with our employment agreement with her in September
2010. The award vests immediately upon the closing of
Ms. Foster-Cheek’s purchase of a home in the
San Francisco Bay Area. If Ms. Foster-Cheek has not
purchased a home in the San Francisco Bay Area within
18 months of the grant, then the grant would lapse entirely
and will not vest.
|
|
|
|
(8)
|
|
This amount consists of (a) Onyx’s payment on behalf
of Ms. Foster-Cheek of $379 in group term life insurance
premiums, (b) $76,183 in relocation benefits to
Ms. Foster-Cheek, (c) $9,750 in housing allowance and
(d) $240 in wellness payment.
|
|
|
|
(9)
|
|
This amount consists of (a) Onyx’s payment on behalf
of Dr. Love of $1,391 in group term life insurance premiums
and (b) Onyx’s matching contributions of $3,500 to
Dr. Love’s 401(k) account.
|
Grants of
Plan-Based Awards
The following table shows all plan-based awards granted to the
Named Executive Officers during the fiscal year ended
December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future
|
|
|
All
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payouts
|
|
|
Other
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under
|
|
|
Stock
|
|
|
Option
|
|
|
Exercise or
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Grant Date
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Number of
|
|
|
Number of
|
|
|
Price of
|
|
|
Value of
|
|
|
|
|
Grant
|
|
|
Estimated Future Payouts Under
|
|
|
Plan
|
|
|
Shares of
|
|
|
Securities
|
|
|
Stock or
|
|
|
Stock and
|
|
|
|
|
Date /
|
|
|
Non- Equity Incentive Plan Awards
|
|
|
Awards
|
|
|
Stock
|
|
|
Underlying
|
|
|
Option
|
|
|
Option
|
|
|
|
|
Approval
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Target
|
|
|
or Units
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
|
|
Name
|
|
Date
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
(#)(4)
|
|
|
(#)(5)
|
|
|
(#)(6)
|
|
|
($/Sh)(7)
|
|
|
($)(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N. Anthony Coles, M.D.
|
|
|
3/31/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,000
|
|
|
|
—
|
|
|
|
30.28
|
|
|
|
635,880
|
|
|
|
|
|
3/31/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
147,000
|
|
|
|
30.28
|
|
|
|
2,044,505
|
|
|
|
|
|
N/A
|
|
|
|
338,000
|
|
|
|
676,000
|
|
|
|
1,014,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthew K. Fust
|
|
|
3/31/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,500
|
|
|
|
—
|
|
|
|
30.28
|
|
|
|
196,820
|
|
|
|
|
|
3/31/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
45,500
|
|
|
|
30.28
|
|
|
|
632,823
|
|
|
|
|
|
N/A
|
|
|
|
108,675
|
|
|
|
217,350
|
|
|
|
326,025
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laura A. Brege
|
|
|
3/31/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,000
|
|
|
|
—
|
|
|
|
30.28
|
|
|
|
242,240
|
|
|
|
|
|
3/31/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
56,000
|
|
|
|
30.28
|
|
|
|
778,859
|
|
|
|
|
|
N/A
|
|
|
|
118,800
|
|
|
|
237,600
|
|
|
|
356,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaye Foster-Cheek
|
|
|
9/30/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,800
|
(9)
|
|
|
—
|
|
|
|
—
|
|
|
|
26.38
|
(11)
|
|
|
126,624
|
|
|
|
|
|
9/30/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,000
|
(10)
|
|
|
—
|
|
|
|
26.38
|
(11)
|
|
|
342,940
|
|
|
|
|
|
9/30/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
91,000
|
(10)
|
|
|
26.38
|
(11)
|
|
|
1,130,957
|
|
|
|
|
|
N/A
|
|
|
|
76,500
|
|
|
|
153,000
|
|
|
|
229,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ted W. Love, M.D.
|
|
|
2/1/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,500
|
(12)
|
|
|
—
|
|
|
|
28.62
|
(13)
|
|
|
472,230
|
|
|
|
|
|
2/1/2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
115,500
|
(12)
|
|
|
28.62
|
(13)
|
|
|
1,523,168
|
|
|
|
|
|
N/A
|
|
|
|
121,250
|
|
|
|
242,500
|
|
|
|
363,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
(1)
|
|
This column represents the annualized threshold potential
payment at 50% of each Named Executive Officer’s annual
incentive bonus for the year ended December 31, 2010. Such
amounts do not reflect the actual payments made to the Named
Executive Officers. See the Summary Compensation Table for
actual payments for 2010 under the annual incentive bonus
program.
|
|
|
|
(2)
|
|
This column represents the annualized target potential payment
at 100% of each Named Executive Officer’s annual incentive
bonus for the year ended December 31, 2010. Such amounts do
not reflect the actual payments made to the Named Executive
Officers. See the Summary Compensation Table for actual payments
for 2010 under the annual incentive bonus program.
|
48
|
|
|
|
|
(3)
|
|
This column represents the annualized maximum potential payment
at 150% of each Named Executive Officer’s annual incentive
bonus for the year ended December 31, 2010. Such amounts do
not reflect the actual payments made to the Named Executive
Officers. See the Summary Compensation Table for actual payments
for 2010 under the annual incentive bonus program.
|
|
|
|
(4)
|
|
This column represents the target potential restricted share
awards that will vest based upon the achievement of certain
pre-determined performance-based conditions. Such amounts do not
reflect the actual restricted share awards that vested. See the
Options Exercised and Stock Vested table for actual restricted
share awards that vested during the year-ended December 31,
2010.
|
|
|
|
(5)
|
|
This column shows the number of restricted stock awards granted
to the Named Executive Officers, other than
Ms. Foster-Cheek and Dr. Love, on March 31, 2010.
One-third of the restricted stock awards granted on
March 31, 2010 will vest in March 2011, with the remaining
shares vesting in series of two successive equal annual
installments through March 2013.
|
|
|
|
(6)
|
|
This column shows the number of stock options granted to the
Named Executive Officers, other than Ms. Foster-Cheek and
Dr. Love, on March 31, 2010. One-eighth of the options
granted on March 31, 2010 vested on September 30, 2010
with the remaining options vesting in equal monthly amounts
thereafter through March 2014.
|
|
|
|
(7)
|
|
This column shows the exercise price for the stock options
granted and the grant date price for the restricted stock awards
granted to the Named Executive Officers, which was the closing
price of Onyx stock on the date the Compensation Committee
approved such grants.
|
|
|
|
(8)
|
|
This column shows the full grant date fair value in accordance
with ASC Topic 718 of restricted stock awards and stock options
granted to the Named Executive Officers. The full grant date
fair value is the amount that the Company would expense in its
financial statements over the award’s vesting schedule. See
notes 1 and 2 of the Summary Compensation Table for
discussions on the fair value calculations.
|
|
|
|
(9)
|
|
This represents a restricted stock award granted to
Ms. Foster-Cheek in connection with our employment letter
agreement with her in September 2010. The award will vest
immediately upon the closing of Ms. Foster-Cheek’s
purchase of a home in the San Francisco Bay Area. For more
information regarding the amendment to
Ms. Foster-Cheek’s employment letter agreement, refer
to the section titled “
Executive Officer
Hires — Kaye Foster-Cheek”
in the
Compensation Discussion and Analysis above.
|
|
|
|
(10)
|
|
This represents the number of restricted stock awards and stock
options granted to Ms. Foster-Cheek on September 30,
2010. One-third of the restricted stock awards granted on
September 30, 2010 will vest in September 2011, with the
remaining shares vesting in a series of two successive equal
annual installments through September 2013. Options granted upon
hire vest ratably over a four year period with 1/4th vesting one
year from the grant date and the remaining options vesting at
1/48th each month thereafter.
|
|
|
|
(11)
|
|
This represents the grant date price for restricted stock awards
and exercise price for the stock options granted to
Ms. Foster-Cheek on September 30, 2010. The grant date
price and exercise price was the closing price of Onyx stock on
September 30, 2010, as reported on the NASDAQ Global
Market, the date the Compensation Committee approved such grants.
|
|
|
|
(12)
|
|
This represents the number of restricted stock awards and stock
options granted to Dr. Love on February 1, 2010.
One-third of the restricted stock awards granted on
February 1, 2010 will vest in February 2011, with the
remaining shares vesting in a series of two successive equal
annual installments through February 2013. Options granted upon
hire vest ratably over a four year period with 1/4th vesting one
year from the grant date and the remaining options vesting at
1/48th each month thereafter.
|
|
|
|
(13)
|
|
This represents the grant date price for restricted stock awards
and exercise price for the stock options granted to
Dr. Love on February 1, 2010. The grant date price and
exercise price was the closing price of Onyx stock on
February 1, 2010, as reported on the NASDAQ Global Market,
the date the Compensation Committee approved such grants.
|
49
Narrative
Summary to Summary Compensation Table and Grants of Plan-Based
Awards Table
The material terms of our Named Executive Officers’ annual
compensation, including base salaries, the annual incentive
bonus program, equity compensation, our equity grant practices,
benefits and perquisites and post-employment obligations are
described above in our “Compensation Discussion and
Analysis.”
As discussed in greater detail in “Compensation Discussion
and Analysis,” the non-equity incentive awards are granted
pursuant to our annual incentive bonus program, with amounts
earned based on the achievement of certain corporate performance
goals.
As discussed in greater detail in “Compensation Discussion
and Analysis,” the equity compensation is awarded in the
form of stock options and restricted stock grants under our 2005
Equity Incentive Plan. Restricted stock grants vest annually
over the three years from the grant date and there is no
purchase price associated with restricted stock grants. The
stock options vest ratably over a four-year period
Outstanding
Equity Awards
The following table shows all outstanding equity awards held by
the Named Executive Officers as of December 31, 2010. The
following awards identified in the table below are also reported
in the Grants of Plan-Based Awards Table on the previous page:
(1) option awards with an expiration date in 2020 for each
of the Named Executive Officers and (2) unvested stock
awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
|
|
|
|
|
|
|
|
|
|
Units of
|
|
Units of
|
|
|
|
Number of Securities Underlying
|
|
Option
|
|
|
|
Stock That
|
|
Stock That
|
|
|
|
Unexercised Options
|
|
Exercise
|
|
Option
|
|
Have Not
|
|
Have Not
|
|
|
|
Exercisable
|
|
Unexercisable
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Name
|
|
(#)
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)(1)
|
|
|
|
N. Anthony Coles, M.D.
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,000
|
(2)
|
|
|
774,270
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,000
|
(3)
|
|
|
368,700
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,666
|
(4)
|
|
|
614,475
|
|
|
|
|
|
27,563
|
|
|
|
119,437
|
(5)
|
|
|
30.28
|
|
|
|
3/31/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
45,938
|
|
|
|
59,062
|
(5)
|
|
|
28.55
|
|
|
|
3/31/2019
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
240,625
|
|
|
|
109,375
|
(6)
|
|
|
29.03
|
|
|
|
3/31/2018
|
|
|
|
—
|
|
|
|
—
|
|
|
Matthew K. Fust
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,500
|
(2)
|
|
|
239,655
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,000
|
(7)
|
|
|
331,830
|
|
|
|
|
|
8,531
|
|
|
|
36,969
|
(5)
|
|
|
30.28
|
|
|
|
3/31/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
45,281
|
|
|
|
49,219
|
(6)
|
|
|
34.48
|
|
|
|
1/5/2019
|
|
|
|
—
|
|
|
|
—
|
|
|
Laura A. Brege
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,000
|
(2)
|
|
|
294,960
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,666
|
(3)
|
|
|
172,035
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,000
|
(4)
|
|
|
73,740
|
|
|
|
|
|
10,500
|
|
|
|
45,500
|
(5)
|
|
|
30.28
|
|
|
|
3/31/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
21,438
|
|
|
|
27,562
|
(5)
|
|
|
28.55
|
|
|
|
3/31/2019
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
42,625
|
|
|
|
19,375
|
(5)
|
|
|
29.03
|
|
|
|
3/31/2018
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
65,625
|
|
|
|
4,375
|
(5)
|
|
|
24.84
|
|
|
|
3/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
75,000
|
|
|
|
—
|
(6)
|
|
|
15.44
|
|
|
|
6/12/2016
|
|
|
|
—
|
|
|
|
—
|
|
|
Kaye Foster-Cheek
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,000
|
(8)
|
|
|
479,310
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,800
|
(9)
|
|
|
176,976
|
|
|
|
|
|
—
|
|
|
|
91,000
|
(6)
|
|
|
26.38
|
|
|
|
9/30/2020
|
|
|
|
|
|
|
|
—
|
|
|
Ted W. Love, M.D.
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,500
|
(10)
|
|
|
608,355
|
|
|
|
|
|
—
|
|
|
|
115,500
|
(6)
|
|
|
28.62
|
|
|
|
2/1/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
(1)
|
|
Value is based on the closing price of Onyx common stock of
$36.87 on December 31, 2010, as reported on the NASDAQ
Global Market.
|
|
|
|
(2)
|
|
The restricted shares were granted on March 31, 2010.
Subject to certain restrictions, remaining shares will vest in
three equal installments on March 31, 2011, 2012 and 2013.
|
50
|
|
|
|
|
(3)
|
|
The restricted shares were granted on March 31, 2009.
Subject to certain restrictions, remaining shares will vest in
two equal installments on March 31, 2011 and 2012.
|
|
|
|
(4)
|
|
The restricted shares were granted on March 31, 2008.
Subject to certain restrictions, remaining shares will vest on
March 31, 2011.
|
|
|
|
(5)
|
|
Annual option grants vest 1/8th after six months from grant date
and 1/48th each month thereafter over four years.
|
|
|
|
(6)
|
|
Options granted upon hire vest ratably over a four year period
with 1/4th vesting one year from the grant date and the
remaining options vesting at 1/48th each month thereafter.
|
|
|
|
(7)
|
|
The restricted shares were granted on January 5, 2009.
Subject to certain restrictions, remaining shares will vest in
two equal installments on January 5, 2011 and 2012.
|
|
|
|
(8)
|
|
The restricted shares were granted on September 30, 2010.
Subject to certain restrictions, remaining shares will vest in
three equal installments on September 30, 2011, 2012 and
2013.
|
|
|
|
(9)
|
|
The restricted shares were granted on September 30, 2010.
Subject to certain restrictions, the award vests immediately
upon the closing of Ms. Foster-Cheek’s purchase of a
residence in the San Francisco Bay Area. For more
information, refer to the section titled “
Executive
Officer Hires — Kaye Foster-Cheek, Senior Vice
President, Global Human Resources.
”
|
|
|
|
(10)
|
|
The restricted shares were granted on February 1, 2010.
Subject to certain restrictions, remaining shares will vest in
three equal installments on February 1, 2011, 2012 and 2013.
|
Options
Exercised and Stock Vested
The following table shows all stock options exercised and value
realized upon exercise, and all stock awards vested and value
realized upon vesting, by the Named Executive Officer during
fiscal year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
|
|
|
|
|
|
Number of
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
|
|
Shares Acquired
|
|
|
Realized on
|
|
|
Acquired
|
|
|
Realized
|
|
|
|
|
on Exercise
|
|
|
Exercise
|
|
|
on Vesting
|
|
|
on Vesting
|
|
|
Name
|
|
(#)
|
|
|
($)(1)
|
|
|
(#)
|
|
|
($)(2)
|
|
|
|
|
N. Anthony Coles, M.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
44,167
|
|
|
|
1,269,577
|
|
|
Matthew K. Fust
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
4,500
|
|
|
|
133,695
|
|
|
Laura A. Brege
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
50,000
|
|
|
|
734,500
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
7,667
|
|
|
|
232,557
|
|
|
Kaye Foster-Cheek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Ted W. Love, M.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
(1)
|
|
The value realized equals the difference between the option
exercise price and the fair market value of Onyx common stock on
the date of exercise, multiplied by the number of shares for
which the option was exercised.
|
|
|
|
(2)
|
|
The value realized equals the market value of Onyx common stock
on the vesting date, multiplied by the number of shares that
vested.
|
51
RISK
CONSIDERATIONS IN OUR COMPENSATION PROGRAM
Our Compensation Committee has considered whether our
compensation programs introduce or encourage additional risks to
the Company. Our Committee does not believe that our
compensation programs as currently structured are reasonably
likely to have a material adverse effect on the Company. The
Committee believes that the balance of long-term equity
incentive vehicles, short-term cash incentive bonus and base
salary appropriately balances both the short and long term
performance goals of the Company without encouraging excessive
risk related behavior. In addition, the substantial percentage
of long-term equity compensation addresses the long-term
financial and operational performance of the Company, while the
short-term cash incentive component of our compensation program
is capped at a sustainable expense level.
While the Committee regularly evaluates its compensation
programs, the Committee believes that its current balance of
incentives both adequately compensates its employees and does
not promote excessive risk taking.
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
The following table provides certain information with respect to
all of our equity compensation plans in effect as of
December 31, 2010.
Equity
Compensation Plan Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
Number of
|
|
|
|
Available for
|
|
|
|
securities to be
|
|
|
|
Future Issuance
|
|
|
|
Issued Upon
|
|
Weighted-Average
|
|
Under Equity
|
|
|
|
Exercise of
|
|
Exercise Price of
|
|
Compensation
|
|
|
|
Outstanding
|
|
Outstanding
|
|
Plans (Excluding
|
|
|
|
Options
|
|
Options
|
|
Securities Reflected
|
|
Plan Category(1)
|
|
and Rights
|
|
and Rights
|
|
in Column a)
|
|
|
|
Column a
|
|
Column b
|
|
Column c
|
|
|
|
Equity compensation plans approved by security holders
|
|
|
6,274,471
|
|
|
$
|
29.48
|
|
|
|
6,566,178(2
|
)
|
|
|
|
|
|
(1)
|
|
We have no equity compensation plans that have not been approved
by security holders.
|
|
|
|
(2)
|
|
This amount includes 355,336 shares that remain available
for purchase under our Employee Stock Purchase Plan. Under the
2005 Equity Incentive Plan, as amended, shares available for
issuance should be reduced by one and six tenths (1.6) shares
for each share of common stock available for issuance pursuant
to a stock purchase award, stock bonus award, stock unit award
or other stock award granted. With this adjustment, the total
amount available for future issuance would be reduced to
4,237,112 shares.
|
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Compensation Committee is currently composed of three
non-employee directors: Mr. Ringo, Dr. Wierenga and
Mr. Wiggans. None of the members of the compensation
committee has at any time since our inception ever been an
officer or employee of the Company. During fiscal year ended
December 31, 2010, none of our executive officers served as
a member of the board of directors or compensation committee of
any entity that has one or more executive officers serving on
our Board of Directors or Compensation Committee.
TRANSACTIONS
WITH RELATED PERSONS
Related-Person
Transactions Policy and Procedures
It is our practice and policy to comply with all applicable
laws, rules and regulations regarding related-person
transactions, including the Sarbanes-Oxley Act of 2002. A
related-person is any executive officer, director, or more than
5% stockholder of the Company, including any of their immediate
family members, and any entity owned or controlled by such
persons. Under its charter, our Audit Committee is charged with
reviewing and approving all related-person transactions, as
required by the NASDAQ rules, and in addition approves any
direct or indirect personal loans from the Company to
non-executive employees. In considering related-person
transactions, the
52
Audit Committee takes into account the relevant available facts
and circumstances. In the event a director has an interest in
the proposed transaction, the director must recuse himself or
herself from the deliberations and approval.
Certain
Transactions
We have entered into indemnity agreements with certain officers
and directors which provide, among other things, that we will
indemnify the officer or director under the circumstances and to
the extent provided for therein, for expenses, damages,
judgments, fines and settlements he or she may be required to
pay in actions or proceedings which he or she is or may be made
a party by reason of his or her position as our director,
officer or other agent, and otherwise to the fullest extent
permitted under Delaware law and our Bylaws.
HOUSEHOLDING
OF PROXY MATERIALS
The SEC has adopted rules that permit companies and
intermediaries (e.g., brokers) to satisfy the delivery
requirements Notices of Internet Availability of Proxy materials
or other Annual Meeting materials with respect to two or more
stockholders sharing the same address by delivering a single
Notice of Internet Availability of Proxy Materials or other
Annual Meeting materials addressed to those stockholders. This
process, which is commonly referred to as
“householding,” potentially means extra convenience
for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are our
stockholders will be “householding” our proxy
materials. A Notice of Internet Availability of Proxy Materials
or proxy statement and annual report, as a stockholder may have
instructed, 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 us
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 Notice of Internet Availability of Proxy
Materials or proxy statement and annual report, as you may have
instructed, in the future you may (1) notify your broker,
(2) direct your written request to: Investor Relations,
Onyx Pharmaceuticals, Inc., 249 East Grand Avenue,
South San Francisco, CA 94080, or (3) contact Investor
Relations, at
(650) 266-0000.
Stockholders who currently receive multiple copies of the Notice
of Internet Availability of Proxy Materials or proxy statement
and annual report, at their address and would like to request
“householding” of their communications should contact
their broker. In addition, we will promptly deliver, upon
written or oral request to the address or telephone number
above, a separate copy of the Notice of Internet Availability of
Proxy Materials or proxy statement and annual report to a
stockholder at a shared address to which a single copy of the
documents was delivered.
OTHER
MATTERS
The Board of Directors knows of no other matters that will be
presented for consideration at the Annual Meeting. If any other
matters are properly brought before the 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
Robert L. Jones
Secretary
April , 2011
A COPY OF OUR ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010 IS AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO: CORPORATE SECRETARY, ONYX
PHARMACEUTICALS, INC., 249 EAST GRAND AVENUE, SOUTH SAN
FRANCISCO, CA 94080.
53
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
ONYX PHARMACEUTICALS, INC.
ONYX PHARMACEUTICALS, INC.,
a corporation organized and existing under and by virtue of
the General Corporation law of the State of Delaware (the “Company”),
Does Hereby Certify
:
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1.
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The name of the corporation is Onyx Pharmaceuticals, Inc.
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2.
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The Amended and Restated Certificate of Incorporation of the Company was filed with the
Secretary of State of the State of Delaware on May 14, 1996. Certificates of Amendment to the
Amended and Restated Certificate of Incorporation of the Company were filed with the Secretary
of State of the State of Delaware on June 13, 2000 and May 25, 2006. The original Certificate
of Incorporation of the Company was filed on April 1, 1996.
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3.
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The Board of Directors of the Company, acting in accordance with the provisions of Sections
141 and 242 of the General Corporation law of the State of Delaware, duly adopted resolutions
to amend the first paragraph of Article IV of the Amended and Restated Certificate of
Incorporation to read in its entirety as follows:
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“IV.
This corporation is authorized to issue two classes of stock to be
designated, respectively, “Common Stock” and “Preferred Stock.” The total
number of shares which the corporation is authorized to issue is two hundred
five million (205,000,000) shares. Two hundred million (200,000,000) shares
shall be Common Stock, each having a par value of one tenth of one cent
($.001). Five million (5,000,000) shares shall be Preferred Stock, each
having a par value of one tenth of one cent ($.001).”
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4.
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Thereafter, pursuant to a resolution of the Board of Directors, this Amendment was submitted
to the stockholders of the Company for their approval and was duly approved by the holders of
the necessary number of shares of the Company’s voting securities in accordance with the
provisions of Section 242 of the General Corporation Law of the State of Delaware.
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In Witness Whereof
, the Company has caused this Certificate of Amendment to be signed
by its duly authorized officer this _____ day of May 2011.
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ONYX PHARMACEUTICALS, INC
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By:
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N. Anthony Coles
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President and Chief Executive Officer
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ATTEST:
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By:
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Robert L. Jones
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Secretary
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2.
ONYX PHARMACEUTICALS, INC.
249 EAST GRAND AVENUE
SOUTH SAN FRANCISCO, CA 94080
VOTE
BY INTERNET —
www.proxyvote.com
Use the Internet to transmit your voting instructions
and for electronic delivery of information up until
11:59 p.m. Eastern Time, May 25, 2011. Have your proxy
card in hand when you access the web site and follow the
instructions to obtain your records and to create an
electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our
company in mailing proxy materials, you can consent to
receiving all future proxy statements, proxy cards and
annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive
or access proxy materials electronically in future
years.
VOTE BY PHONE — 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 p.m. Eastern Time, May 25,
2011. Have your proxy card in hand when you call and
then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to
Vote Processing, c/o Broadridge, 51 Mercedes Way,
Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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M33142-P11335
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KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY
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ONYX PHARMACEUTICALS, INC.
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For
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Withhold
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For All
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To withhold authority to vote for any individual
nominee(s), mark “For All Except” and write the
number(s) of the nominee(s) on the line below.
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The Board of Directors recommends you vote
FOR the following:
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All
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All
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Except
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1.
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Election of Directors
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Nominees:
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01) N. Anthony Coles, M.D.
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02) Magnus Lundberg
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03) William R. Ringo
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The Board of Directors recommends you vote FOR the following proposals:
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For
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Against
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Abstain
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2.
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To approve an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from
100,000,000 to 200,000,000 shares.
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o
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3.
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To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in this proxy statement.
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The Board of Directors recommends you vote 1 year on the following proposal:
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1 Year
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2 Years
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3 Years
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Abstain
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4.
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To indicate, on an advisory basis, the preferred frequency of stockholder advisory votes on the compensation of the Company’s named
executive officers.
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The Board of Directors recommends you vote FOR the following proposal:
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For
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Against
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Abstain
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5.
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To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for
the fiscal year ending December 31, 2011.
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For address changes and/or comments, please check this box and write them
on the back where indicated.
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Please sign exactly as your name(s) appear(s) hereon.
When signing as attorney, executor, administrator, or
other fiduciary, please give full title as such. Joint
owners should each sign personally. All holders must
sign. If a corporation or partnership, please sign in
full corporate or partnership name, by authorized
officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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ANNUAL MEETING OF STOCKHOLDERS
Thursday, May 26, 2011
10:00 a.m. local time
San Francisco Airport Marriott
1800 Old Bayshore Highway
Burlingame, CA 94010
YOUR VOTE IS IMPORTANT
PLEASE REVIEW THE 2011 PROXY STATEMENT AND ACCOMPANYING MATERIALS AND
VOTE TODAY
YOU CAN VOTE BY MAIL, TELEPHONE OR INTERNET
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, Annual Report and Form 10-K are available at
www.proxyvote.com.
Electronic Delivery of Future Proxy Materials:
If you wish to receive all future proxy materials electronically by e-mail;
please visit
www.proxyvote.com
and follow the instructions.
M33143-P11335
proxy
ONYX PHARMACEUTICALS, INC.
San Francisco Airport Marriott
1800 Old Bayshore Highway
Burlingame, CA 94010
This proxy is solicited by the Board of Directors for use at the Annual Meeting of Stockholders on May 26, 2011.
The shares of stock held in your account or in a dividend reinvestment account will be voted as you specify on the reverse side.
If no choice is specified, the proxy will be voted “FOR” all nominees for director, “1 Year” for the frequency of
stockholder advisory votes on the compensation of the Company’s named executive officers and “FOR” proposals 2,
3 and 5.
By signing the proxy, you revoke all prior proxies and appoint N. Anthony Coles M.D., Matthew K. Fust and Robert L. Jones,
each proxies with full power of substitution, to vote these shares of record at the close of business on March 28, 2011 on the
matters on the reverse side and any other matters which may come before the Annual Meeting of Stockholders and all adjournments.
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Address Changes/Comments:
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
See reverse for voting instructions.
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