o
|
|
Preliminary Proxy Statement
|
o | ||
x |
Definitive Proxy Statement
|
(as
permitted by Rule 14a-6(e)(2))
|
|||
o
|
|||||
o
|
Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
|
LEXICON
PHARMACEUTICALS, INC.
|
(Name
of Registrant as Specified In Its
Charter)
|
(Name of
Person(s) Filing Proxy Statement, if Other Than the
Registrant)
|
x |
No
fee required.
|
o |
Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
|
(1)
|
Title
of each class of securities to which transaction
applies: N/A
|
|
(2)
|
Aggregate
number of securities to which transaction
applies: N/A
|
|
(3)
|
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): N/A
|
|
(4)
|
Proposed
maximum aggregate value of transaction: N/A
|
|
(5)
|
Total
fee paid: $0
|
o | Fee paid previously with preliminary materials: N/A |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1)
|
Amount
Previously Paid:
|
|
(2)
|
Form, Schedule or Registration Statement No.: | |
(3)
|
Filing Party: | |
(4)
|
Date
Filed
|
Sincerely, | |
/s/ Arthur T. Sands, M.D., Ph.D. | |
Arthur T. Sands, M.D., Ph.D. | |
President and Chief Executive Officer |
·
|
elect
four Class II directors;
|
·
|
ratify
and approve the appointment of Ernst & Young LLP as our independent
auditors for the fiscal year ending December 31, 2008;
and
|
·
|
act
on any other business that properly comes before the annual
meeting.
|
By order of the board of directors, | |
/s/ Jeffrey L. Wade | |
Jeffrey L. Wade | |
Secretary |
·
|
the
election of four Class II directors;
and
|
·
|
a
proposal to ratify and approve the appointment of Ernst & Young LLP as
our independent auditors for the fiscal year ending December 31,
2008.
|
·
|
If
your shares are registered in your own name, please contact our transfer
agent, BNY Mellon Shareowner Services, and inform them of your request by
calling them at (800) 635-9270 or writing them at 480 Washington
Boulevard., Jersey City, New Jersey 07310. If you would like to
request any additional copies of our proxy materials, you will also need
to contact Broadridge and inform them of your request by calling them at
(800) 542-1061 or writing them at Householding Department,
51 Mercedes Way, Edgewood, New York
11717.
|
·
|
If
an intermediary, such as a broker or bank, holds your shares, please
contact Broadridge and inform them of your request by calling them at
(800) 542-1061 or writing them at Householding Department,
51 Mercedes Way, Edgewood, New York 11717. Be sure to
include your name, the name of your brokerage firm and your account
number.
|
Name
|
Age
|
Position with the
Company
|
Year
First Became a
Director
|
|||
Samuel
L. Barker, Ph.D.
|
65
|
Chairman
of the Board of Directors (Class II)
|
2000
|
|||
Christopher
J. Sobecki
|
49
|
Director
(Class II)
|
2007
|
|||
Judith
L. Swain, M.D.
|
59
|
Director
(Class II)
|
2007
|
|||
Kathleen
M. Wiltsey
|
52
|
Director
(Class II)
|
2007
|
Name
|
Age
|
Position with the
Company
|
||
Arthur
T. Sands, M.D., Ph.D.
|
46
|
President
and Chief Executive Officer and Director (Class III)
|
||
Samuel L. Barker, Ph.D.
(1)
|
65
|
Chairman
of the Board of Directors (Class II)
|
||
Philippe J. Amouyal (2)
|
49
|
Director
(Class III)
|
||
Raymond Debbane (3)
|
53
|
Director
(Class I)
|
||
Robert J. Lefkowitz, M.D. (3)
|
64
|
Director
(Class I)
|
||
Alan S. Nies, M.D. (2)
|
70
|
Director
(Class I)
|
||
Frank P. Palantoni (1)
(2)
|
50
|
Director
(Class III)
|
||
Christopher
J. Sobecki
|
49
|
Director
(Class II)
|
||
Judith L. Swain, M.D. (3)
|
59
|
Director
(Class II)
|
||
Kathleen M. Wiltsey (1)
|
52
|
Director
(Class II)
|
(1)
|
Member
of the Audit Committee
|
(2)
|
Member
of the Compensation Committee
|
(3)
|
Member
of the Corporate Governance
Committee
|
Years
Ended December 31,
|
||||||||||
2007
|
2006
|
|||||||||
Audit
fees(1)
|
$ | 446,000 | $ | 317,500 | ||||||
Audit-related
fees(2)
|
22,000 | 20,500 | ||||||||
Tax
fees
|
— | — | ||||||||
All
other fees
|
— | — | ||||||||
$ | 468,000 | $ | 338,000 |
(1) | “Audit fees” include professional services rendered for (i) the audit of our management’s assessment of effective internal control over financial reporting, as required by the Sarbanes-Oxley Act of 2002, for the fiscal years ended December 31, 2006 and 2007, (ii) the audit of our annual financial statements for the fiscal years ended December 31, 2006 and 2007, (iii) the reviews of the financial statements included in our quarterly reports on Form 10-Q for such years and (iv) the issuance of consents and other matters relating to registration statements filed by us. | ||
(2) | “Audit-related fees” include assurance or related services reasonably related to our audit for the fiscal years ended December 31, 2006 and 2007. These fees related to the audit of the financial statements of our 401(k) plan and consultation concerning financial accounting and reporting standards. |
·
|
each
of the individuals listed in “Executive and Director Compensation —
Summary Compensation Table”;
|
·
|
each
of our directors;
|
·
|
each
person, or group of affiliated persons, who is known by us to own
beneficially five percent or more of our common stock;
and
|
·
|
all
current directors and executive officers as a
group.
|
Beneficial
Ownership
|
||||||||||||
Number
of Shares Beneficially Owned
|
Shares
Issuable Pursuant to Options Exercisable within 60 Days of
February 26, 2008
|
Percentage
Ownership
|
||||||||||
Invus,
L.P., Invus Public Equities, L.P. and related
parties (1)
|
54,716,094 |
─
|
40.0% | |||||||||
Royce
& Associates, LLC (2)
|
9,196,977 |
─
|
6.7% | |||||||||
Arthur
T. Sands, M.D., Ph.D. (3)
|
1,560,162 | 2,433,815 | 2.9% | |||||||||
Julia
P. Gregory (4)
|
55,047 | 872,732 | * | |||||||||
Alan
J. Main, Ph.D.
|
─
|
571,975 | * | |||||||||
Jeffrey
L. Wade, J.D.
|
3,000 | 884,022 | * | |||||||||
Brian
P. Zambrowicz, Ph.D.
|
101,600 | 1,153,863 | * | |||||||||
Samuel
L. Barker, Ph.D.
|
7,000 | 114,000 | * | |||||||||
Philippe
J. Amouyal
|
─
|
3,500 | * | |||||||||
Raymond Debbane (5)
|
54,716,094 | 3,500 | 40.0% | |||||||||
Robert
J. Lefkowitz, M.D.
|
─
|
78,000 | * | |||||||||
Alan
S. Nies, M.D.
|
5,000 | 65,000 | * | |||||||||
Frank
P. Palantoni
|
─
|
40,500 | * | |||||||||
Christopher
J. Sobecki
|
1,000 | 3,500 | * | |||||||||
Judith
L. Swain, M.D.
|
─
|
3,500 | * | |||||||||
Kathleen
M. Wiltsey
|
─
|
7,000 | * | |||||||||
All
directors and executive officers as a
group (3)(4)(5)
(18 persons)
|
56,462,103 | 7,297,149 | 44.2% |
(1)
|
Based
upon a Schedule 13D filed with the SEC on June 27, 2007, and amended on
August 24 and August 29, 2007, reflecting the beneficial ownership of (a)
50,824,986 shares of our common stock by Invus, L.P., Invus Advisors,
L.L.C., Ulys, L.L.C. and Raymond Debbane, each of which may be deemed to
have sole voting and investment power with respect to such shares, and (b)
3,891,108 shares of our common stock by Invus Public Equities, L.P., Invus
Public Equities Advisors, LLC, Ulys, L.L.C. and Mr. Debbane, each of which
may be deemed to have sole voting and investment power with respect to
such shares. Such shares are subject to certain voting
restrictions pursuant to our stockholders’ agreement with Invus, L.P.
described under the heading “Transactions with Related Persons —
Arrangements with Invus.” The address for Invus, L.P., Invus
Advisors, L.L.C., Invus Public Equities, L.P., Invus Public Equities
Advisors, LLC, Ulys, L.L.C. is 750 Lexington Avenue, 30th Floor, New York,
New York 10022. The address for Mr. Debbane is c/o Ulys,
L.L.C., 750 Lexington Avenue, 30th Floor, New York, New York
10022.
|
(2)
|
Based
upon a Schedule 13G filed with the SEC on February 1, 2008,
reflecting the beneficial ownership of our common stock by Royce &
Associates, LLC. The address for Royce & Associates, LLC is
1414 Avenue of the Americas, New York, New York
10019.
|
(3)
|
The
number of shares beneficially owned by Dr. Sands includes 60,000 shares
held in the name of minor children and 817,500 shares owned by Sands
Associates LP. The general partners of Sands Associates LP are
ATS Associates, L.L.C., owned by Dr. Sands, and MES Associates, L.L.C.,
owned by Dr. Sands’ wife.
|
(4)
|
The
number of shares beneficially owned by Ms. Gregory includes 4,847 shares
held in the name of dependent children and trusts for their benefit of
which she serves as a trustee.
|
(5)
|
Based
upon a Schedule 13D filed with the SEC on June 27, 2007, and amended on
August 24 and August 29, 2007, reflecting the beneficial ownership of our
common stock by Mr. Debbane. The address for Mr. Debbane is
c/o Ulys, L.L.C., 750 Lexington Avenue, 30th
Floor, New York, New York 10022.
|
·
|
solicit
proxies to vote any of our voting securities or any voting securities of
our subsidiaries;
|
·
|
submit
to our board of directors a written proposal for any merger,
recapitalization, reorganization, business combination or other
extraordinary transaction involving an acquisition of us or any of our
subsidiaries or any of our or our subsidiaries’ securities or assets by
Invus and its affiliates;
|
·
|
enter
into discussions, negotiations, arrangements or understandings with any
third party with respect to any of the foregoing;
or
|
·
|
request
us or any of our representatives, directly or indirectly, to amend or
waive any of these standstill
provisions.
|
·
|
a
base salary, which reflects the responsibilities relating to the position
and individual performance;
|
·
|
variable
annual cash bonus awards tied to the achievement of specified corporate
and individual goals and milestones, relative to pre-established bonus
targets expressed as a percentage of base salary;
and
|
·
|
long-term
stock-based incentive awards, historically in the form of stock
options.
|
·
|
the
submission of the required regulatory filings and initiation of Phase 1
clinical trials for our most advanced drug candidate,
LX6171;
|
·
|
the
submission of the required regulatory filings for the initiation of
clinical trials for another drug candidate,
LX1031;
|
·
|
our
progress relative to our objectives in advancing our other drug discovery
and development programs;
|
·
|
our
performance relative to our objectives for our net use of cash in
operations and for capital expenditures;
and
|
·
|
our
cash and investments at the end of
2006.
|
·
|
the
completion of Phase 1 clinical trials and initiation of a Phase 2 clinical
trial of our most advanced drug candidate,
LX6171;
|
·
|
the
completion of a Phase 1a and initial Phase 1b clinical trial of another
drug candidate, LX1031, with an additional Phase 1b clinical trial to be
conducted in 2008;
|
·
|
the
submission of the required regulatory filings for the initiation of
clinical trials for two of our other drug candidates, LX2931 and LX1032,
with the initiation of a Phase 1 clinical trial of
LX2931;
|
·
|
our
progress relative to our objectives in advancing our other drug discovery
and development programs;
|
·
|
our
performance relative to our objectives for our net use of cash in
operations and for capital expenditures;
and
|
·
|
our
cash and investments relative to our objectives at the end of 2007,
reflecting the completion of our financing arrangement with Invus, L.P.
described under the heading “Transactions with Related Persons —
Arrangements with Invus” and the establishment of our financing
arrangement with Symphony Icon Holdings LLC and Symphony Icon, Inc. for
the clinical development of LX6171, LX1031 and
LX1032.
|
|
|||||||||||||||||||||||
Name and Position
|
Year
|
Salary
|
Bonus
|
Option
Awards(1)
|
All
Other
Compensation (2)
|
Total
|
|||||||||||||||||
Arthur
T. Sands, M.D., Ph.D.
|
2007
|
$ | 522,875 | $ | 265,000 | $ | 908,842 | $ | 6,339 | $ | 1,703,056 | ||||||||||||
President, Chief Executive
Officer and Director
|
2006
|
$ | 473,000 | $ | 300,000 | $ | 792,267 | $ | 373,466 | (3) | $ | 1,938,733 | |||||||||||
Julia
P. Gregory
|
2007
|
$ | 334,250 | $ | 120,000 | $ | 344,121 | $ | 6,106 | $ | 804,477 | ||||||||||||
Executive Vice President
and Chief Financial Officer
|
2006
|
$ | 329,000 | $ | 80,000 | $ | 332,168 | $ | 5,974 | $ | 747,142 | ||||||||||||
Alan
J. Main, Ph.D.
|
2007
|
$ | 323,375 | $ | 130,000 | $ | 244,633 | $ | 6,090 | $ | 704,098 | ||||||||||||
Executive Vice President of
Pharmaceutical Research
|
2006
|
$ | 312,000 | $ | 90,000 | $ | 220,103 | $ | 5,949 | $ | 628,052 | ||||||||||||
Jeffrey
L. Wade, J.D.
|
2007
|
$ | 316,500 | $ | 130,000 | $ | 326,967 | $ | 6,079 | $ | 779,546 | ||||||||||||
Executive Vice President
and General Counsel
|
2006
|
$ | 292,000 | $ | 80,000 | $ | 290,675 | $ | 5,920 | $ | 668,595 | ||||||||||||
Brian
P. Zambrowicz, Ph.D.
|
2007
|
$ | 340,875 | $ | 140,000 | $ | 449,001 | $ | 6,114 | $ | 935,990 | ||||||||||||
Executive Vice President
and Chief Scientific Officer
|
2006
|
$ | 312,000 | $ | 120,000 | $ | 362,435 | $ | 5,949 | $ | 800,384 | ||||||||||||
(1)
|
Reflects
the dollar amount recognized for financial statement reporting purposes
for the years ended December 31, 2006 and 2007 in accordance with FAS
123(R) (but disregarding forfeiture estimates related to service-based
vesting conditions) and, accordingly, includes amounts from options
granted prior to 2006. See the information appearing under the
heading entitled “Stock-Based Compensation” in footnote 2 to our
consolidated financial statements included as part of our Annual Report on
Form 10-K for the year ended December 31, 2007 for certain assumptions
made in the valuation of options granted in the years ended December 31,
2007, 2006 and 2005. See the information appearing under the
heading entitled “Stock-Based Compensation” in footnote 12 to our
consolidated financial statements included as part of our Annual Report on
Form 10-K for the year ended December 31, 2004 for certain assumptions
made in the valuation of options granted in the years ended December 31,
2004, 2003 and 2002.
|
(2)
|
Includes
the following amounts in respect of company matching contributions under
our 401(k) plan and company-paid premiums for group term life
insurance. The company-paid life insurance premiums reflect
payments for group term life policies maintained for the benefit of all
employees.
|
Year
|
Company
401(k)
Matching
Contribution
|
Company-Paid
Group
Term
Life
Insurance Premiums
|
|||||||
Arthur
T. Sands, M.D., Ph.D.
|
2007
|
$ | 5,625 | $ | 714 | ||||
2006
|
$ | 5,500 | $ | 681 | |||||
Julia
P. Gregory
|
2007
|
$ | 5,625 | $ | 481 | ||||
2006
|
$ | 5,500 | $ | 474 | |||||
Alan
J. Main, Ph.D.
|
2007
|
$ | 5,625 | $ | 465 | ||||
2006
|
$ | 5,500 | $ | 449 | |||||
Jeffrey
L. Wade, J.D.
|
2007
|
$ | 5,625 | $ | 454 | ||||
2006
|
$ | 5,500 | $ | 420 | |||||
Brian
P. Zambrowicz, Ph.D.
|
2007
|
$ | 5,625 | $ | 489 | ||||
2006
|
$ | 5,500 | $ | 449 |
(3)
|
Reflects a February
2006 agreement with Dr. Sands terminating our obligation under his
employment agreement to fund a split-dollar life insurance policy for his
benefit, pursuant to which we (a) agreed to forego our right under the
split-dollar agreement with the trust that owns the policy to the
reimbursement of $147,828 in premiums that we previously paid for such
policy prior to 2002 and (b) made a payment to Dr. Sands of $219,457
enabling him to pay, for his own account, the premiums under the policy
for 2004 and 2005 and the taxes associated with the termination of the
trust’s reimbursement obligations under the split-dollar
agreement. We entered into the employment agreement with Dr.
Sands in October 1999 and entered into the split-dollar agreement with the
trust that owns the policy in October
2000.
|
Name
|
Grant
Date
|
Number
of Securities Underlying Options
|
Exercise
Price
of
Option
Awards
|
Closing
Market Price
on
the Grant
Date
|
Grant
Date Fair Value of Options
|
|||||||||||
Arthur
T. Sands, M.D., Ph.D.
|
2/13/2007
|
340,000
|
$ | 3.94 | $ | 3.95 | $ | 999,532 | ||||||||
Julia
P. Gregory
|
2/13/2007
|
100,000
|
$ | 3.94 | $ | 3.95 | $ | 293,980 | ||||||||
Alan
J. Main, Ph.D.
|
2/13/2007
|
100,000
|
$ | 3.94 | $ | 3.95 | $ | 293,980 | ||||||||
Jeffrey
L. Wade, J.D.
|
2/13/2007
|
120,000
|
$ | 3.94 | $ | 3.95 | $ | 352,776 | ||||||||
Brian
P. Zambrowicz, Ph.D.
|
2/13/2007
|
200,000
|
$ | 3.94 | $ | 3.95 | $ | 587,960 |
Number
of Securities Underlying
Unexercised Options
|
|||||||||||||||
Exercisable
|
Unexercisable
(1)
|
Option
Exercise
Price
|
Option
Expiration
Date
|
||||||||||||
Arthur
T. Sands, M.D., Ph.D.
|
900,000 | — | $ | 2.50 |
9/29/2008
|
||||||||||
555,000 | — | $ | 2.50 |
2/3/2010
|
|||||||||||
100,000 | — | $ | 14.44 |
2/2/2011
|
|||||||||||
170,000 | — | $ | 9.38 |
2/19/2012
|
|||||||||||
135,000 | — | $ | 3.90 |
2/14/2013
|
|||||||||||
143,784 | 6,216 | $ | 7.59 |
2/12/2014
|
|||||||||||
106,272 | 43,728 | $ | 5.76 |
2/18/2015
|
|||||||||||
174,192 | 205,808 | $ | 4.00 |
2/1/2016
|
|||||||||||
— | 340,000 | $ | 3.94 |
2/13/2017
|
|||||||||||
Julia
P.
Gregory
|
433,000 | — | $ | 2.50 |
2/8/2010
|
||||||||||
60,000 | — | $ | 14.44 |
2/2/2011
|
|||||||||||
90,000 | — | $ | 9.38 |
2/19/2012
|
|||||||||||
72,000 | — | $ | 3.90 |
2/14/2013
|
|||||||||||
71,892 | 3,108 | $ | 7.59 |
2/12/2014
|
|||||||||||
53,136 | 21,864 | $ | 5.76 |
2/18/2015
|
|||||||||||
45,840 | 54,160 | $ | 4.00 |
2/1/2016
|
|||||||||||
— | 100,000 | $ | 3.94 |
2/13/2017
|
|||||||||||
Alan
J. Main,
Ph.D.
|
49,001 | — | $ | 1.97 |
12/14/2009
|
||||||||||
300,000 | — | $ | 10.93 |
7/12/2011
|
|||||||||||
15,000 | — | $ | 9.38 |
2/19/2012
|
|||||||||||
54,000 | — | $ | 3.90 |
2/14/2013
|
|||||||||||
47,928 | 2,072 | $ | 7.59 |
2/12/2014
|
|||||||||||
35,424 | 14,576 | $ | 5.76 |
2/18/2015
|
|||||||||||
29,796 | 35,204 | $ | 4.00 |
2/1/2016
|
|||||||||||
— | 100,000 | $ | 3.94 |
2/13/2017
|
|||||||||||
Jeffrey
L. Wade,
J.D.
|
372,500 | — | $ | 2.50 |
1/13/2009
|
||||||||||
135,000 | — | $ | 2.50 |
2/3/2010
|
|||||||||||
50,000 | — | $ | 14.44 |
2/2/2011
|
|||||||||||
65,000 | — | $ | 9.38 |
2/19/2012
|
|||||||||||
54,000 | — | $ | 3.90 |
2/14/2013
|
|||||||||||
57,513 | 2,487 | $ | 7.59 |
2/12/2014
|
|||||||||||
42,508 | 17,492 | $ | 5.76 |
2/18/2015
|
|||||||||||
55,008 | 64,992 | $ | 4.00 |
2/1/2016
|
|||||||||||
— | 120,000 | $ | 3.94 |
2/13/2017
|
|||||||||||
|
|||||||||||||||
Brian
P. Zambrowicz, Ph.D.
|
480,000 | — | $ | 2.50 |
9/29/2008
|
||||||||||
210,000 | — | $ | 2.50 |
2/3/2010
|
|||||||||||
50,000 | — | $ | 14.44 |
2/2/2011
|
|||||||||||
75,000 | — | $ | 9.38 |
2/19/2012
|
|||||||||||
63,000 | — | $ | 3.90 |
2/14/2013
|
|||||||||||
67,099 | 2,901 | $ | 7.59 |
2/12/2014
|
|||||||||||
49,593 | 20,407 | $ | 5.76 |
2/18/2015
|
|||||||||||
77,928 | 92,072 | $ | 4.00 |
2/1/2016
|
|||||||||||
— | 200,000 | $ | 3.94 |
2/13/2017
|
(1)
|
Each
option vests with respect to 25% of the shares underlying the option on
the first anniversary of the grant date and 1/48th
per month for each month of service
thereafter.
|
Name
|
Number of Shares
Acquired
on Exercise
|
Value Realized on
Exercise
|
||||||
Arthur
T. Sands, M.D., Ph.D.
|
300,000 | $ | 603,999 | |||||
Julia
P. Gregory
|
— | — | ||||||
Jeffrey
L. Wade, J.D.
|
— | — | ||||||
Brian
P. Zambrowicz, Ph.D.
|
90,000 | $ | 192,000 | |||||
Alan
J. Main, Ph.D.
|
— | — |
·
|
any
reduction in Dr. Sands’ salary, followed by Dr. Sands terminating his
employment for “good reason” within 120 days after receiving notice of
such reduction;
|
·
|
any
breach by our company of any material provision of the agreement, followed
by Dr. Sands terminating his employment for “good reason” within 120 days
after receiving notice of such
breach;
|
·
|
a
substantial and adverse change in Dr. Sands’ duties, control, authority,
status or position, or the assignment to Dr. Sands of any duties or
responsibilities which are materially inconsistent with such status or
position, or a material reduction in the duties and responsibilities
exercised by Dr. Sands, or a loss of title, loss of office, loss of
significant authority, power or control, or any removal of Dr. Sands from,
or any failure to reappoint or reelect him to his positions as chief
executive officer and director, followed by Dr. Sands terminating his
employment for “good reason” within 120 days after receiving notice of any
such action;
|
·
|
following
a “change in control,” the failure by the surviving entity to expressly
assume and agree to continue and perform the agreement in the same manner
as we would otherwise be required to perform if the “change in control”
had not occurred, followed by Dr. Sands terminating his employment for
“good reason” within six months after receiving actual notice of such
failure; or
|
·
|
following
a “change in control,” the failure by the surviving entity to continue any
pension, medical, health-and-accident, life insurance, or disability
income plan or program in which Dr. Sands was participating at the time of
the “change in control,” or the taking of any action by the surviving
entity that would adversely affect Dr. Sands’ participation in or
materially reduce his benefits under any such plan that was enjoyed by him
immediately prior to the “change in control,” followed by Dr. Sands
terminating his employment for “good reason” within six months after
receiving actual notice of such failure or
action.
|
·
|
any
reduction in Ms. Gregory’s salary, followed by Ms. Gregory terminating her
employment for “good reason” within 120 days after receiving notice of
such reduction;
|
·
|
any
breach by our company of any material provision of the agreement, followed
by Ms. Gregory terminating her employment for “good reason” within 120
days after receiving notice of such
breach;
|
·
|
following
a “change in control,” the failure by the surviving entity to expressly
assume and agree to continue and perform the agreement in the same manner
as we would otherwise be required to perform if the “change in control”
had not occurred, followed by Ms. Gregory terminating her employment for
“good reason” within 12 months after receiving actual notice of such
failure;
|
·
|
any
material reduction of Ms. Gregory’s duties or responsibilities, followed
by Ms. Gregory terminating her employment for “good reason” within 12
months after receiving actual notice of such reduction;
or
|
·
|
following
a “change in control,” the failure by the surviving entity to continue any
pension, medical, health-and-accident, life insurance, or disability
income plan or program in which Ms. Gregory was participating at the time
of the “change in control,” or the taking of any action by the surviving
entity that would adversely affect Ms. Gregory’s participation in or
materially reduce her benefits under any such plan that was enjoyed by her
immediately prior to the “change in control,” followed by Ms. Gregory
terminating her employment for “good reason” within 12 months after
receiving actual notice of such failure or
action.
|
·
|
any
reduction in Dr. Main’s salary, followed by Dr. Main terminating his
employment for “good reason” within 120 days after receiving notice of
such reduction;
|
·
|
any
breach by our company of any material provision of the agreement, followed
by Dr. Main terminating his employment for “good reason” within 120 days
after receiving notice of such
breach;
|
·
|
any
material reduction of Dr. Main’s authority, duties or responsibilities,
followed by Dr. Main terminating his employment for “good reason” within
120 days after receiving actual notice of such
reduction;
|
·
|
following
a “change in control,” the failure by the surviving entity to expressly
assume and agree to continue and perform the agreement in the same manner
as we would otherwise be required to perform if the “change in control”
had not occurred, followed by Dr. Main terminating his employment for
“good reason” within 12 months after receiving actual notice of such
failure; or
|
·
|
following
a “change in control,” the failure by the surviving entity to continue any
pension, medical, health-and-accident, life insurance, or disability
income plan or program in which Dr. Main was participating at the time of
the “change in control,” or the taking of any action by the surviving
entity that would adversely affect Dr. Main’s participation in or
materially reduce his benefits under any such plan that was enjoyed by him
immediately prior to the “change in control,” followed by Dr. Main
terminating his employment for “good reason” within 12 months after
receiving actual notice of such failure or
action.
|
·
|
any
reduction in Mr. Wade’s salary, followed by Mr. Wade terminating his
employment for “good reason” within 120 days after receiving notice of
such reduction;
|
·
|
any
breach by our company of any material provision of the agreement, followed
by Mr. Wade terminating his employment for “good reason” within 120 days
after receiving notice of such
breach;
|
·
|
following
a “change in control,” the failure by the surviving entity to expressly
assume and agree to continue and perform the agreement in the same manner
as we would otherwise be required to perform if the “change in control”
had not occurred, followed by Mr. Wade terminating his employment for
“good reason” within 12 months after receiving actual notice of such
failure;
|
·
|
any
material reduction of Mr. Wade’s duties or responsibilities, followed by
Mr. Wade terminating his employment for “good reason” within 12 months
after receiving actual notice of such reduction;
or
|
·
|
following
a “change in control,” the failure by the surviving entity to continue any
pension, medical, health-and-accident, life insurance, or disability
income plan or program in which Mr. Wade was participating at the time of
the “change in control,” or the taking of any action by the surviving
entity that would adversely affect Mr. Wade’s participation in or
materially reduce his benefits under any such plan that was enjoyed by him
immediately prior to the “change in control,” followed by Mr. Wade
terminating his employment for “good reason” within 12 months after
receiving actual notice of such failure or
action.
|
·
|
any
reduction in Dr. Zambrowicz’s salary, followed by Dr. Zambrowicz
terminating his employment for “good reason” within 120 days after
receiving notice of such reduction;
|
·
|
any
breach by our company of any material provision of the agreement, followed
by Dr. Zambrowicz terminating his employment for “good reason” within 120
days after receiving notice of such
breach;
|
·
|
following
a “change in control,” the failure by the surviving entity to expressly
assume and agree to continue and perform the agreement in the same manner
as we would otherwise be required to perform if the “change in control”
had not occurred, followed by Dr. Zambrowicz terminating his employment
for “good reason” within 12 months after receiving actual notice of such
failure;
|
·
|
any
material reduction of Dr. Zambrowicz’s duties or responsibilities,
followed by Dr. Zambrowicz terminating his employment for “good reason”
within 12 months after receiving actual notice of such reduction;
or
|
·
|
following
a “change in control,” the failure by the surviving entity to continue any
pension, medical, health-and-accident, life insurance, or disability
income plan or program in which Dr. Zambrowicz was participating at the
time of the “change in control,” or the taking of any action by the
surviving entity that would adversely affect Dr. Zambrowicz’s
participation in or materially reduce his benefits under any such plan
that was enjoyed by him immediately prior to the “change in control,”
followed by Dr. Zambrowicz terminating his employment for “good reason”
within 12 months after receiving actual notice of such failure or
action.
|
·
|
the
individual having engaged in intentional misconduct causing our material
violation of any state or federal
laws;
|
·
|
the
individual having engaged in a theft of corporate funds or corporate
assets or in a material act of fraud upon
us;
|
·
|
an
act of personal dishonesty taken by the individual that was intended to
result in personal enrichment of the individual at our
expense;
|
·
|
the
individual’s final conviction in a court of competent jurisdiction of a
felony; or
|
·
|
a
breach by the individual during his or her employment of the conflict of
interest, confidential information and non-competition covenants under the
agreement, if such breach results in a material injury to our
company.
|
·
|
any
person, other than certain specified persons, becomes the beneficial owner
of securities representing 35% or more of the combined voting power of our
outstanding voting securities;
|
·
|
the
approval by our stockholders of a reorganization, merger, or consolidation
pursuant to which our stockholders immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter,
own or control more than 50% of the combined voting power of the surviving
entity’s outstanding voting securities in substantially the same
proportions as prior to such reorganization, merger or
consolidation;
|
·
|
our
liquidation or dissolution or the sale of all or substantially all of our
assets;
|
·
|
the
election by our stockholders of any person to our board of directors who
has not been nominated for election by a majority of the board of
directors or any duly appointed committee
thereof;
|
·
|
following
the election or removal of directors, a majority of the board of directors
consists of individuals who were not members of the board of directors two
years before such election or removal, unless the election of such
individuals to the board of directors has been approved in advance by
directors representing a majority of the directors then in office who were
directors at the beginning of the two-year period;
or
|
·
|
any
other corporate event affecting the company deemed to be a “change in
control” by the board of directors.
|
·
|
any
person other than Invus, L.P. and its affiliates becomes the beneficial
owner of securities representing 35% or more of the combined voting power
of our outstanding voting
securities;
|
·
|
Invus,
L.P. and its affiliates become the beneficial owner of securities
representing 50% or more of the combined voting power of our outstanding
voting securities;
|
·
|
the
approval by our stockholders of a reorganization, merger, or consolidation
pursuant to which our stockholders immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter,
own or control more than 50% of the combined voting power of the surviving
entity’s outstanding voting securities in substantially the same
proportions as prior to such reorganization, merger or
consolidation;
|
·
|
our
liquidation or dissolution or the sale of all or substantially all of our
assets;
|
·
|
the
election by our stockholders of any person to our board of directors who
has not been nominated for election by a majority of the board of
directors or any duly appointed committee
thereof;
|
·
|
following
the election or removal of directors, a majority of the board of directors
consists of individuals who were not members of the board of directors two
years before such election or removal, unless the election of such
individuals to the board of directors has been approved in advance by
directors representing a majority of the directors then in office who were
directors at the beginning of the two-year period;
or
|
·
|
any
other corporate event affecting the company deemed to be a “change in
control” by the compensation
committee.
|
Name
|
Aggregate
Salary Continuation
|
Bonus
(6)
|
Accelerated
Portion of Stock Options
(7)
|
|||||||||
Arthur
T. Sands, M.D., Ph.D.
|
$ | 530,000 | (1) | $ | 265,000 | $ | — | |||||
Julia
P. Gregory
|
$ | 335,000 | (2) | $ | 58,625 | $ | — | |||||
Alan
J. Main, Ph.D.
|
$ | 325,000 | (3) | $ | 56,875 | $ | — | |||||
Jeffrey
L. Wade, J.D.
|
$ | 320,000 | (4) | $ | 56,000 | $ | — | |||||
Brian
P. Zambrowicz, Ph.D.
|
$ | 345,000 | (5) | $ | 69,000 | $ | — |
(1)
|
Reflects
aggregate salary continuation payments due as a result of our termination
of Dr. Sands’ employment without “cause,” Dr. Sands’ termination of his
employment for “good reason,” or the termination of Dr. Sands’ employment
at the end of a renewal term through notice of
non-renewal.
|
(2)
|
Reflects
aggregate salary continuation payments due as a result of our termination
of Ms. Gregory’s employment without “cause” or Ms. Gregory’s termination
of her employment for “good reason.” If Ms. Gregory’s
employment had been terminated at the end of a renewal term through notice
of non-renewal, the aggregate salary continuation payment for Ms. Gregory
would have been $167,500.
|
(3)
|
Reflects
aggregate salary continuation payments due as a result of our termination
of Dr. Main’s employment without “cause” or Dr. Main’s termination of his
employment for “good reason.” If Dr. Main’s employment had been
terminated at the end of a renewal term through notice of non-renewal, the
aggregate salary continuation payment for Dr. Main would have been
$162,500.
|
(4)
|
Reflects
aggregate salary continuation payments due as a result of our termination
of Mr. Wade’s employment without “cause” or Mr. Wade’s termination of his
employment for “good reason.” If Mr. Wade’s employment had been
terminated at the end of a renewal term through notice of non-renewal, the
aggregate salary continuation payment for Mr. Wade would have been
$160,000.
|
(5)
|
Reflects
aggregate salary continuation payments due as a result of our termination
of Dr. Zambrowicz’s employment without “cause” or Dr. Zambrowicz’s
termination of his employment for “good reason.” If Dr.
Zambrowicz’s employment had been terminated at the end of a renewal term
through notice of non-renewal, the aggregate salary continuation payment
for Dr. Zambrowicz would have been
$172,500.
|
(6)
|
Reflects
single-sum bonus payments due as a result of our termination of the named
individual’s employment without “cause,” the named individual’s
termination of his or her employment for “good reason,” or in the case of
Dr. Sands, the termination of his employment at the end of a renewal term
through notice of non-renewal.
|
(7)
|
Based
on the closing price of our common stock on the Nasdaq Global Market on
December 31, 2007 of $3.03 per share, less the exercise price payable with
respect to the stock options for which vesting would have been
accelerated.
|
·
|
an
annual retainer of $15,000 for service on the board of directors ($30,000
for service as non-executive chairman of the board of directors), prorated
for any partial year of service;
|
·
|
an
annual retainer of $2,500 for service on each committee of the board of
directors of which he or she is a member ($5,000 for service as chairman
of any such committee), prorated for any partial year of
service;
|
·
|
a
fee of $2,500 for each meeting of the board of directors that he or she
attends in person ($500 for each telephonic meeting of the board of
directors in which he or she participates);
and
|
·
|
a
fee of $1,000 for each committee meeting that he or she attends in person
other than in connection with a meeting of the full board of directors
($500 for each telephonic committee meeting in which he or she
participates).
|
Name
|
Fees
Earned or Paid in Cash
|
Option Awards
(1)
(2) (3)
|
All
Other Compensation
|
Total
|
||||||||||||
Samuel
L. Barker, Ph.D.
|
$ | 49,279 | $ | 63,176 | — | $ | 112,455 | |||||||||
Philippe
J. Amouyal
|
$ | 12,522 | $ | 4,631 | — | $ | 17,153 | |||||||||
Raymond
Debbane
|
$ | 11,999 | $ | 4,631 | — | $ | 16,630 | |||||||||
Robert
J. Lefkowitz, M.D.
|
$ | 28,500 | $ | 31,588 | $ | 50,000 | (4) | $ | 110,088 | |||||||
Barry
Mills, J.D., Ph.D.
|
$ | 26,557 | $ | 25,436 | — | $ | 51,993 | |||||||||
Alan
S. Nies, M.D.
|
$ | 31,477 | $ | 57,811 | $ | 75,000 | (5) | $ | 164,288 | |||||||
Frank
P. Palantoni
|
$ | 41,483 | $ | 64,446 | — | $ | 105,929 | |||||||||
Clayton
S. Rose
|
$ | 27,168 | $ | 45,671 | — | $ | 72,839 | |||||||||
Christopher
J. Sobecki
|
$ | 10,661 | $ | 4,631 | — | $ | 15,292 | |||||||||
Judith
L. Swain, M.D.
|
$ | 7,519 | $ | 3,755 | — | $ | 11,274 | |||||||||
Kathleen
M. Wiltsey
|
$ | 24,243 | $ | 16,140 | — | $ | 40,383 |
(1)
|
Reflects
the dollar amount recognized for financial statement reporting purposes
for the year ended December 31, 2007 in accordance with FAS 123(R) (but
disregarding forfeiture estimates related to service-based vesting
conditions) and, accordingly, includes amounts from options granted prior
to 2007. See the information appearing under the heading
entitled “Stock-Based Compensation” in footnote 2 to our consolidated
financial statements included as part of our Annual Report on Form 10-K
for the year ended December 31, 2007 for certain assumptions made in the
valuation of options granted in the years ended December 31, 2007, 2006
and 2005. See the information appearing under the heading
entitled “Stock-Based Compensation” in footnote 12 to our consolidated
financial statements included as part of our Annual Report on Form 10-K
for the year ended December 31, 2004 for certain assumptions made in the
valuation of options granted in the years ended December 31, 2004, 2003
and 2002.
|
(2)
|
The
non-employee members of our board of directors who held such position on
December 31, 2007 held the following aggregate number of unexercised
options as of such date:
|
Name
|
Number
of Securities Underlying Unexercised Options
|
|||
Samuel
L. Barker, Ph.D.
|
114,000 | |||
Philippe
J. Amouyal
|
30,000 | |||
Raymond
Debbane
|
30,000 | |||
Robert
J. Lefkowitz, M.D.
|
78,000 | |||
Alan
S. Nies, M.D.
|
68,500 | |||
Frank
P. Palantoni
|
50,000 | |||
Christopher
J. Sobecki
|
30,000 | |||
Judith
L. Swain, M.D.
|
30,000 | |||
Kathleen
M. Wiltsey
|
30,000 |
(3)
|
The
following table presents the fair value of each grant of stock options in
2007 to non-employee members of our board of directors, computed in
accordance with FAS 123(R):
|
Name
|
Grant
Date
|
Number
of Securities Underlying Options
|
Exercise
Price
of
Option Awards
|
Grant
Date Fair
Value of Options
|
|
||||||||||
Samuel
L. Barker, Ph.D.
|
4/26/2007
|
10,000 | $ | 3.77 | $ | 27,995 | |||||||||
4/26/2007
|
10,000 | $ | 3.77 | $ | 27,995 | ||||||||||
Philippe
Amouyal
|
8/28/2007
|
30,000 | $ | 3.21 | $ | 67,908 | |||||||||
Raymond
Debbane
|
8/28/2007
|
30,000 | $ | 3.21 | $ | 67,908 | |||||||||
Robert
J. Lefkowitz, M.D.
|
4/26/2007
|
10,000 | $ | 3.77 | $ | 27,995 | |||||||||
Barry
Mills, J.D., Ph.D.
|
4/26/2007
|
10,000 | $ | 3.77 | $ | 27,995 | |||||||||
Alan
S. Nies, M.D.
|
4/26/2007
|
10,000 | $ | 3.77 | $ | 27,995 | |||||||||
Frank
P. Palantoni
|
4/26/2007
|
10,000 | $ | 3.77 | $ | 27,995 | |||||||||
Clayton
S. Rose
|
4/26/2007
|
10,000 | $ | 3.77 | $ | 27,995 | |||||||||
Christopher
J. Sobecki
|
8/28/2007
|
30,000 | $ | 3.21 | $ | 67,908 | |||||||||
Judith
L. Swain, M.D.
|
9/24/2007
|
30,000 | $ | 3.31 | $ | 70,062 | |||||||||
Kathleen
M. Wiltsey
|
2/26/2007
|
30,000 | $ | 4.26 | $ | 95,355 |
(4)
|
Consists
of amounts payable to Dr. Lefkowitz for his consulting
services.
|
(5)
|
Consists
of amounts payable to Dr. Nies for his consulting services as chairman of
our medical advisory board.
|
By order of the board of directors, | |
/s/ Jeffrey L. Wade | |
Jeffrey L. Wade | |
Secretary |
VOTE
BY INTERNET - www.proxyvote.com
|
||
LEXICON
PHARMACEUTICALS, INC.
8800
TECHNOLOGY FOREST PLACE
THE
WOODLANDS, TX 77381-4287
|
Use the Internet to
transmit your voting instructions and for electronic delivery of
information up until 11:59 P.M. Eastern Time the day before the cut-off
date or meeting date. 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 STOCKHOLDER COMMUNICATIONS
|
||
If you would like to
reduce the costs incurred by Lexicon Pharmaceuticals, Inc. 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 stockholder communications 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 the day before the cut-off date or meeting date. 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 Lexicon Pharmaceuticals, Inc., c/o
Broadridge, 51 Mercedes Way, Edgewood, NY
11717.
|
TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
LEXPH1
|
KEEP
THIS PORTION FOR YOUR RECORDS
|
DETACH
AND RETURN THIS PORTION ONLY
|
LEXICON
PHARMACEUTICALS, INC.
|
|||||||||||||
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE
|
|||||||||||||
“FOR”
ITEMS 1 AND 2.
|
|||||||||||||
Vote on Directors
|
1.
|
ELECTION
OF CLASS II DIRECTORS
|
For
All
|
Withhold
All
|
For
All
Except
|
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.
|
||||||||
Nominees:
|
|||||||||||||
01) Samuel L. Barker, Ph.D.
|
|||||||||||||
02) Christopher
J. Sobecki
|
0
|
0
|
0
|
||||||||||
03) Judith
L. Swain, M.D.
|
|||||||||||||
04) Kathleen
M. Wiltsey
|
Vote
on Proposal
|
For
|
Against
|
Abstain
|
|||
2.
|
Ratification
and approval of the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31,
2008.
|
0
|
0
|
0
|
||
3.
|
In
their discretion, upon such other matters that may properly come before
the meeting or any adjournment or adjournments thereof.
|
|||||
The
shares represented by this proxy when properly executed will be voted in
the manner directed herein by the undersigned
Stockholder(s). If no direction is made, this proxy will be voted FOR items 1 and 2. If any other
matters properly come before the meeting, or if cumulative voting is
required, the person named in this proxy will vote in their
discretion.
|
Please
sign our name exactly as it appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please add your title as
such. When signing as joint tenants, all parties in the joint tenancy must
sign. If a signer is a corporation, please sign in full corporate name by
duly authorized officer.
|
|||||
Signature
[PLEASE
SIGN WITHIN BOX]
|
Date
|
Signature
(Joint Owners)
|
Date
|
LEXICON
PHARMACEUTICALS, INC.
|
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
ANNUAL
MEETING OF STOCKHOLDERS
|
April
23, 2008
|
The
stockholder(s) hereby appoint(s) Arthur T. Sands, M.D., Ph.D. and Jeffrey
L. Wade, or either of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as
designated on the reverse side of this ballot, all of the shares of Common
Stock of Lexicon Pharmaceuticals, Inc. that the stockholder(s) is/are
entitled to vote at the Annual Meeting of Stockholders to be held at 1:30
p.m., local time, on April 23, 2008 at The Marriott Woodlands Waterway
Hotel and Convention Center, 1601 Lake Robbins Drive, The Woodlands,
Texas, and any adjournment or postponement thereof.
|
THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD
OF DIRECTORS AND FOR EACH PROPOSAL.
|
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE
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CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
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