UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): January 20,
2011
PDL
BioPharma, Inc.
(Exact
name of Company as specified in its charter)
000-19756
(Commission
File Number)
|
Delaware
|
94-3023969
|
|
|
(State
or Other Jurisdiction of
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(I.R.S.
Employer Identification No.)
|
|
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Incorporation)
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932
Southwood Boulevard
Incline
Village, Nevada 89451
(Address
of principal executive offices, with zip code)
(775)
832-8500
(Company’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Company under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
2011
Annual Bonus Plan
On
January 20, 2011, the Board of Directors (the “Board of Directors”) of PDL
BioPharma, Inc. (the “Company”), upon the recommendation of its Compensation
Committee (the “Compensation Committee”), approved a cash bonus plan for its
employees working 30 hours per week or more for fiscal year 2011 (the “2011
Annual Bonus Plan”).
Bonuses
under the 2011 Annual Bonus Plan will be determined by reference to 2011
corporate performance against the Company’s 2011 corporate goals approved by the
Board of Directors and by reference to 2011 individual performance against the
2011 individual goals approved by the Compensation Committee. The corporate and
individual performance determinations are then weighted for each named executive
officer.
The
target bonus percentages (previously approved by the Compensation Committee and
disclosed in December 2010) and the maximum bonus percentage of the named
executive officers’ annual average W-2 compensation and the weighting of
corporate and individual goals that will be used to determine each of our named
executive officers’ fiscal year 2011 bonuses are set forth in the chart
below:
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Name
|
|
Title
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Target
Bonus
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Maximum
Bonus
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Ratio
of 2011
Corporate
Goals/
2011
Individual
Goals
|
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John
P.
McLaughlin
|
|
President and
Chief
Executive
Officer
|
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70%
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105%
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100%/0%
|
|
Christine
R.
Larson
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Vice
President and Chief
Financial
Officer
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50%
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75%
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75%/25%
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|
Christopher
Stone
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Vice
President, General
Counsel
and Secretary
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50%
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75%
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75%/25%
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For
fiscal year 2011, the Compensation Committee will review the 2011 corporate
goals at mid-year to assure that the goals continue to reflect the Company’s
priorities. If needed, the Compensation Committee will recommend to the Board of
Directors such changes that the Compensation Committee deems appropriate. The
2011 corporate goals and their relative weight are set forth in the chart
below:
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2011
Corporate Goal
|
|
Weight
|
|
Optimize
Value of Patent Estate
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65%
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Implement
Corporate Strategy & Business Development
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20%
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Manage
Risk and Maintain Capital Structure within Guidelines
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10%
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Enhance
Investor Relations
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5%
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Total
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100%
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Goals for
2011 for our vice president and chief financial officer include: (1) prepare
2011 budget and dividend/share repurchase strategy; (2) hire new VP of Finance
and Principal Accounting Officer and assure smooth transition; (3) restructure
capital/debt; (4) implement investor outreach program; (5) support asset
purchase opportunities; and (6) successful management of any
audits.
Goals for
2011 for our vice president, general counsel and secretary include: (1) manage
EPO appeal; (2) manage litigation with MedImmune; (3) manage litigation with
Roche/Genentech; (4) manage any other disputes; and (5) perform diligence for
asset purchase opportunities.
The 2011
Annual Bonus Plan requires that our chief executive officer conduct the
performance reviews of our other named executive officers, which are then
reviewed and approved by our Compensation Committee. Following these
assessments, our Compensation Committee will then determine the amount of bonus
for our other named executive officers. The performance of our chief executive
officer is determined by our Compensation Committee based on the Company’s
achievement of the established 2011 corporate goals.
The
summary of the 2011 Annual Bonus Plan set forth herein is qualified in its
entirety to the full text of the 2011 Annual Bonus Plan which is filed as
Exhibit 10.1 hereto and is incorporated by reference.
Item
9.01 Financial Statements and Exhibits.
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Exhibit
No.
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Description
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|
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10.1
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PDL
BioPharma, Inc. 2011 Annual Bonus
Plan
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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PDL
BIOPHARMA, INC.
(Company)
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|||
|
|
By:
|
/s/ Christopher Stone | |
| Christopher Stone | |||
| Vice President, General Counsel and Secretary | |||
Dated: January
26, 2011
EXHIBIT
INDEX
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Exhibit
No.
|
Description
|
|
|
10.1
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PDL
BioPharma, Inc. 2011 Annual Bonus
Plan
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PDL BIOPHARMA,
INC.
2011
Annual Bonus Plan
This 2011 Annual Bonus Plan (the “Plan”) is intended to enhance
stockholder value by promoting a connection between the performance of PDL
BioPharma, Inc. (the “Company”) and the compensation
of personnel of the Company and to promote retention of high performing
personnel.
1. All
employees of the Company working 30 hours per week or more (each, a “Participant”) are eligible to
receive annual bonuses for 2011 according to this Plan. The Plan will be
administered by the Compensation Committee of the Board of Directors of the
Company (the “Committee”). The
Committee shall have all powers and discretion necessary to administer the Plan
and to control its operation and may delegate responsibilities to Company
officers as it deems appropriate. Participants are eligible to receive bonuses
based on their individual performance and/or the Company’s performance during
2011. A Participant who does not demonstrate satisfactory individual performance
(50% or higher), however, will not be eligible for any portion of his or her
bonus, including the portion based on Company performance.
2. Company
performance shall be determined by the Committee based on the Company’s ability
to meet or exceed corporate goals (“2011 Corporate Goals”) as
approved by the Board of Directors and set forth in Exhibit A. The Committee shall
review the 2011 Corporate Goals at mid-year to assure that they reflect the
priorities of the Company and recommend such changes that it deems appropriate
to the Board for its consideration. For clarification, the Committee may
determine in its sole discretion that the Company did not satisfactorily
complete enough goals and in that case, the Committee may determine that no
bonus shall be paid to Participants, regardless of individual performance
achievement. Additionally, the Committee may adjust or modify the
2011 Corporate Goals to reflect changed Company
objectives. Individual performance of the Company’s officers shall be
reviewed and recommended to the Committee by the Chief Executive Officer, except
for the performance of the Chief Executive Officer, which shall be determined by
the Committee based on the Company’s achievement of established Corporate Goals.
Individual performance of employees shall be reviewed by the appropriate manager
and approved by the Chief Executive Officer. In all cases, individual
performance shall be based on 2011 Individual Goals which
have been approved by the Chief Executive Officer and are set forth as Exhibit B.
3. To be
eligible for a bonus, a Participant must be on payroll prior to October 1, 2011
and must by employed by the Company as of the date of payment of the bonus. A
Participant hired after April 1, 2011 shall be eligible for a pro-rated
bonus.
4. A
Participant who has taken an approved leave of absence pursuant to the Company’s
policies during 2011 shall receive a pro-rated bonus.
5. The
amount of a Participant’s bonus is based on a target percentage of such
Participant’s annual average W-2 throughout the 2011 calendar
year. The target percentage for executives has been determined by the
Committee and for employees has been determined by the manager at the beginning
of the Plan Year. The target percentage shall then be adjusted based
on the attainment of 2011 Corporate Goals and Individual Goals over the course
of the Plan Year to arrive at a final performance percentage. For
each person, the target percentage and ratio of attainment of 2011 Corporate
Goals and 2011 Individual Goals is set forth as Exhibit C.
6. The
Company performance percentage and/or the individual performance percentage may
exceed 100% in the event the Company or the individual Participant exceeds
expected goals, provided that neither percentage may exceed 150%. For example,
assuming the Company has met 100% of its 2011 Corporate Goals, a Participant,
who has met 150% of his or her 2011 Individual Goals, has a target percentage of
25%, has a corporate-to-individual goal ratio of 50%/50% and a base pay rate of
$100,000 will receive a bonus of $31,250 (100% x 0.5 + 150% x 0.5 = 125%; and
125% x 25% = 31.25%; and 31.25% of Participant’s base pay rate of $100,000 =
$31,250). All determinations and decisions made by the Committee
shall be final, conclusive and binding on all persons and shall be given the
maximum deference permitted by law.
7. This Plan
is effective for the Company’s 2011 calendar year beginning January 1, 2011
through December 31, 2011 (the “Plan Year”) and will expire automatically on
December 31, 2011. Bonus payments will be made by February 15th,
2012.
8. The
Company shall withhold all applicable taxes from any bonus payment, including
any federal, state and local taxes.
9. Nothing
in this Plan shall interfere with or limit in any way the right of the Company
to terminate any Participant’s employment or service at any time, with or
without cause. Nothing in these guidelines should be construed as an employment
agreement or an entitlement to any Participant for any incentive payment
hereunder.
10. This Plan
and all awards shall be construed in accordance with and governed by the laws of
the State of Nevada, without regard to its conflict of law
provisions.
11. Payments
under this Plan shall be unsecured, unfounded obligations of the
Company. To the extent a Participant has any rights under this Plan,
the Participant’s rights shall be those of a general unsecured creditor of the
Company.
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