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
Filed
by the Registrant:
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ý
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Filed
by a Party other than the Registrant:
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¨
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Check
the appropriate box:
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Preliminary
Proxy Statement
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¨
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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¨
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Definitive
Proxy Statement
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¨
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Definitive
Additional Materials
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¨
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Soliciting
Material Under Rule 14a-12
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SYNVISTA
THERAPEUTICS, 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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ý
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No
fee required.
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¨
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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)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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¨
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Fee
paid previously with preliminary materials.
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¨
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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)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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SYNVISTA
THERAPEUTICS, INC.
221
West Grand Avenue, Suite 200
Montvale,
NJ 07645
(201)
934-5000
This
proxy statement relates to the 2008 annual meeting of the stockholders of
Synvista Therapeutics, Inc. At the meeting, we will ask you to approve, among
other matters, an amendment to our 2005 Stock Plan and an amendment to our
Restated Certificate of Incorporation. The proposals presented for your vote
are
described in detail in this proxy statement. In this proxy statement, we refer
to Synvista Therapeutics, Inc. as the “Company,” “Synvista,” “we” or
“us.”
We
are
asking stockholders of Synvista:
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1.
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To
elect Noah Berkowitz, M.D., Ph.D. as a Class B director to hold office
until the 2011 annual meeting of stockholders and until his successor
has
been duly elected and qualified;
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2.
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To
approve an amendment to the Company’s 2005 Stock Plan to increase the
number of shares of common stock authorized for issuance under the
Plan
from 1,060,000 to 2,000,000;
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3.
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To
approve an amendment to the Company’s Restated Certificate of
Incorporation to decrease the number of shares of common stock authorized
for issuance from 300,000,000 to
150,000,000;
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4.
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To
ratify the selection of J.H. Cohn LLP as the Company’s independent
registered public accounting firm for the fiscal year ending
December 31, 2008; and
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5.
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To
transact such other business as may properly come before the meeting
or
any adjournment or postponement
thereof.
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YOUR
VOTE IS IMPORTANT. PLEASE VOTE PROMPTLY.
The
date,
time and place of the Synvista annual meeting is:
July
22, 2008
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10:00
a.m., Eastern Time
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the
Marriott Park Ridge
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300
Brae Boulevard
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/s/
Noah Berkowitz
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Park
Ridge, NJ 07656
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Noah
Berkowitz, M.D., Ph.D.
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President
and Chief Executive Officer
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June
[__], 2008
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Synvista
Therapeutics, Inc.
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This
proxy statement is dated June [__], 2008 and is available at
[www._______________].
Synvista
will provide you with copies of this proxy statement, the annual report to
stockholders for the fiscal year ended December 31, 2007 and important
information about Synvista from documents filed with the SEC that are not
included in this proxy statement, free of charge, upon request to: Synvista
Therapeutics, Inc., 221 West Grand Avenue, Suite 200, Montvale, NJ 07645,
Attention: Investor Relations, Telephone:
(201) 934-5000.
SYNVISTA
THERAPEUTICS, INC.
221
West Grand Avenue, Suite 200
Montvale,
NJ 07645
(201)
934-5000
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS OF SYNVISTA THERAPEUTICS,
INC.
To
Be Held on July 22, 2008
To
the
Stockholders of Synvista Therapeutics, Inc.:
You
are
cordially invited to attend the annual meeting of stockholders of Synvista
Therapeutics, Inc., which will be held on July 22, 2008, at 10:00 a.m., Eastern
Time, at the Marriott Park Ridge, 300 Brae Boulevard, Park Ridge, NJ 07656
for the following purposes:
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1.
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To
elect Noah Berkowitz, M.D., Ph.D. as a Class B director to hold office
until the 2011 annual meeting of stockholders and until his successor
has
been duly elected and qualified;
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2.
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To
approve an amendment to the Company’s 2005 Stock Plan to increase the
number of shares of common stock authorized for issuance under the
Plan
from 1,060,000 to 2,000,000;
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3.
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To
approve an amendment to the Company’s Restated Certificate of
Incorporation to decrease the number of shares of common stock authorized
for issuance from 300,000,000 to
150,000,000;
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4.
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To
ratify the selection of J.H. Cohn LLP as the Company’s independent
registered public accounting firm for the fiscal year ending
December 31, 2008; and
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5.
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To
transact such other business as may properly come before the meeting
or
any adjournment or postponement
thereof.
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Only
stockholders of record at the close of business on May 28, 2008 are entitled
to
vote at the meeting or any adjournment or postponement thereof. Only
stockholders or their proxy holders and Synvista guests may attend the meeting.
A complete list of those stockholders entitled to vote will be kept at the
principal executive offices of Synvista, 221 West Grand Avenue, Suite 200,
Montvale, NJ 07645 for a period of ten days prior to the meeting.
We
are
pleased to be among the first companies to take advantage of new Securities
and
Exchange Commission rules that allow issuers to furnish proxy materials to
their
stockholders on the Internet. We believe the new rules will allow us to provide
our stockholders with the information they need, while lowering the costs of
delivery and reducing the environmental impact of our annual meeting.
Your
vote is important. The affirmative vote of the holders of a plurality of the
votes cast in person or by proxy at the Synvista annual meeting is required
for
election of Dr. Berkowitz as a Class B director. The affirmative vote of the
holders of a majority of the votes cast in person or by proxy at the Synvista
annual meeting is required for approval of Proposals 2 and 4. The affirmative
vote of the holders of a majority of the shares of Synvista stock
outstanding on the record date for the annual meeting is required for approval
of Proposal 3.
You
are urged to attend the annual meeting in person, but if you are unable to
do
so, the Board of Directors would appreciate your prompt vote electronically
via
the Internet or telephone or, if you request paper copies of a proxy card,
via
regular mail. We strongly
encourage you to vote electronically.
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Noah
Berkowitz, M.D., Ph.D.
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Secretary
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June
[__], 2008
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TABLE
OF CONTENTS
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING
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GENERAL
INFORMATION
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1 |
Solicitation
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5 |
Record
Date, Voting Rights and Outstanding Shares
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5 |
Broker
Non-Votes
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5 |
Revocability
of Proxy and Voting of Shares
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5 |
Dissenters’
Right of Appraisal
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6 |
Electronic
Delivery of Stockholder Communications
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6 |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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7 |
MANAGEMENT
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9 |
The
Board of Directors
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9 |
Committees
of the Board of Directors and Meetings
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10 |
Director
Nomination Process
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10 |
Stockholder
Communications to the Board
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11 |
Director
Attendance at Annual Meetings
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11 |
Executive
Officer
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11 |
EXECUTIVE
COMPENSATION
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12 |
AUDIT
COMMITTEE REPORT
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19 |
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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20 |
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
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20 |
PROPOSAL
1 ELECTION OF A CLASS B DIRECTOR
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PROPOSAL
2 INCREASE IN THE AGGREGATE NUMBER OF SHARES AVAILABLE UNDER THE
SYNVISTA
2005 STOCK PLAN
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22 |
Federal
Income Tax Considerations
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23 |
New
Plan Benefits
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PROPOSAL
3 APPROVAL OF AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF
INCORPORATION TO DECREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON
STOCK
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25 |
PROPOSAL
4 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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26 |
Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-audit
Services of Independent Auditors
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27 |
FORWARD
LOOKING STATEMENTS AND CAUTIONARY STATEMENTS
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28 |
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
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28 |
CODE
OF BUSINESS CONDUCT AND ETHICS
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28 |
STOCKHOLDER
PROPOSALS
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28 |
OTHER
MATTERS
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28 |
GENERAL
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28 |
WHERE
YOU CAN FIND MORE INFORMATION
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29 |
ANNEX
INDEX
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29 |
ANNEX
A - 2005 STOCK PLAN
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A-1
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ANNEX
B - FORM OF CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF
INCORPORATION
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B-1
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ANNEX
C - PROXY CARD
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C-1
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PRELIMINARY
COPIES FILED PURSUANT TO RULE 14a-6(a)
Synvista
Therapeutics, Inc.
221
West Grand Avenue, Suite 200
Montvale,
NJ 07645
(201)
934-5000
PROXY
STATEMENT FOR THE SYNVISTA THERAPEUTICS, INC.
2008
ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON JULY 22, 2008
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING
Q:
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Why
am I receiving these
materials?
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A:
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We
have made these materials available to you on the Internet or, upon
your
request, we have delivered printed versions of these materials to
you by
mail because Synvista’s Board of Directors is soliciting your proxy to
vote at the 2008 annual meeting of stockholders, and any adjournments
or
postponements of the meeting, to be held on July 22, 2008, at 10:00
a.m.,
Eastern Time, at the Marriott Park Ridge, 300 Brae Boulevard, Park
Ridge, NJ 07656. This proxy statement along with the accompanying
Notice
of Annual Meeting of Stockholders summarizes the purposes of the
meeting
and the information you need to know to vote at the annual
meeting.
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Q:
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When
and where is the stockholder
meeting?
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A:
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The
Synvista annual meeting will take place on July 22, 2008 at 10:00
a.m., Eastern Time at the Marriott Park Ridge, 300 Brae Boulevard,
Park
Ridge, NJ 07656.
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Q:
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How
does the Board of Directors recommend that I vote on the
proposals?
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A:
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The
Board of Directors recommends that you vote as
follows:
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·
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“FOR”
the election of a Class B director;
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·
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“FOR”
the approval of the amendment to the Synvista 2005 Stock
Plan;
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“FOR”
the approval of the amendment to Synvista’s Restated Certificate of
Incorporation; and
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·
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“FOR”
the ratification of the selection of independent auditors for our
fiscal
year ending December 31, 2008.
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If
any
other matter is presented, the proxy card provides that your shares will be
voted by the proxy holder listed on the proxy card in accordance with his best
judgment. At the time this proxy statement was printed, we knew of no matters
that needed to be acted on at the annual meeting, other than those discussed
in
this proxy statement.
Q:
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Why
did I receive a one-page notice in the mail regarding the Internet
availability of proxy materials this year instead of a full set of
proxy
materials?
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A:
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Pursuant
to rules recently adopted by the Securities and Exchange Commission,
we
have elected to provide access to our proxy materials over the Internet.
Accordingly, we are sending a Notice of Internet Availability of
Proxy
Materials (the “Notice”) to our stockholders of record and beneficial
owners. All stockholders will have the ability to access the proxy
materials on a website referred to in the Notice or request to receive
a
printed set of the proxy materials. Instructions on how to access
the
proxy materials over the Internet or to request a printed copy may
be
found on the Notice. In addition, stockholders may request to receive
proxy materials in printed form by mail or electronically by email
on an
ongoing basis.
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Q:
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How
can I get electronic access to the proxy materials?
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A:
The
Notice will provide you with instructions regarding how to:
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•
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View
our proxy materials for the annual meeting on the Internet; and
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•
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Instruct
us to send our future proxy materials to you electronically by email.
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Choosing
to receive your future proxy materials by email will save us the cost of
printing and mailing documents to you and will reduce the impact of our annual
stockholders’ meetings on the environment. If you choose to receive future proxy
materials by email, you will receive an email next year with instructions
containing a link to those materials and a link to the proxy voting site. Your
election to receive proxy materials by email will remain in effect until you
terminate it.
A:
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Only
stockholders who own Synvista common stock and Series B Preferred
Stock at
the close of business on May 28, 2008 are entitled to vote at the
Synvista
annual meeting. On this record date, there were [__________] shares
of
Synvista common stock and 10,000,000 shares of Synvista Series B
Preferred
Stock outstanding and entitled to vote.
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Q:
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How
many votes do I have?
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A:
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Each
share of Synvista common stock that you own entitles you to one vote.
Each
holder of Series B Preferred Stock is entitled to cast the number
of votes
equal to one-half of the number of whole shares of common stock into
which
the shares of Series B Preferred Stock held by such holder are convertible
as of the record date. The Series B Preferred Stock is convertible
into
common stock at any time at the option of the holder at an initial
conversion rate of 1:1, subject to
adjustment.
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A:
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If
you are a stockholder of record of Synvista, you may vote by telephone
at
the toll-free number 1-800-PROXIES or on the Internet at
www.voteproxy.com. If you are a beneficial owner of Synvista common
stock,
you may be able to vote electronically as well, if your proxy card
or
voting instruction form so indicates. See the instructions on your
proxy
card or voting instruction form. You are strongly encouraged to vote
electronically if you are given that option.
If
you request a paper copy of the proxy card, you may vote by mail
by
completing, signing and dating your proxy card and returning it to
Synvista. If you mark your voting instructions on the proxy card,
your
shares will be voted:
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·
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according
to the best judgment of the proxy holder if a proposal comes up for
a vote
at the annual meeting that is not on the proxy
card.
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If
you do
not provide voting instructions, your shares will be voted:
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·
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FOR
the election of a Class B director, FOR the approval of the amendment
to
the Synvista 2005 Stock Plan, FOR the approval of the amendment to
Synvista’s Restated Certificate of Incorporation, and FOR the ratification
of J.H. Cohn LLP as Synvista’s independent registered public accounting
firm for the fiscal year ending December 31, 2008;
and
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·
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according
to the best judgment of the proxy holder if a proposal comes up for
a vote
at the annual meeting that is not on the proxy card or for the adjournment
or postponement of the annual
meeting.
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Q:
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What
do I do if I want to change my
vote?
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A:
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Just
send in a later-dated, signed proxy card to Synvista’s Secretary before
the meeting. Or, you can attend the meeting in person and vote. You
may
also revoke your proxy by sending a notice of revocation to Synvista’s
Secretary at Synvista’s principal executive offices, 221 West Grand
Avenue, Suite 200, Montvale, New Jersey 07645. If you voted via the
Internet or telephone, you can submit a later vote using those same
methods.
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Q:
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What
if I receive more than one proxy
card?
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A:
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You
may receive more than one proxy card or voting instruction form if
you
hold shares of our common stock in more than one account, which may
be in
registered form or held in street name. Please vote in the manner
described under “How Do I Vote?” for each account to ensure that all of
your shares are voted.
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Q:
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If
my shares are held in “street name” by my broker, bank or other nominee,
will my broker, bank or other nominee vote my shares for
me?
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A:
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If
you do not provide your broker, bank or nominee with instructions
on how
to vote your “street name” shares, your broker, bank or nominee will not
be permitted to vote them on the matters that are to be considered
by the
Synvista stockholders at the annual meeting, except for the election
of a
Class B director and ratification of our independent registered public
accounting firm. You should therefore be sure to provide your broker
with
instructions on how to vote your
shares.
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If
you
wish to vote your shares in person, you must bring to the meeting a letter
from
the broker, bank or nominee confirming your beneficial ownership in the shares
to be voted.
Q:
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What
happens if I do not vote electronically, return a proxy card or otherwise
provide proxy
instructions?
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A:
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The
failure to vote electronically, return your proxy card or otherwise
provide proxy instructions could be a factor in establishing a quorum
for
the annual meeting of Synvista stockholders, which is required to
transact
business at the meeting.
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Q:
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What
constitutes a quorum at the
meeting?
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A:
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The
presence, in person or by proxy, of the holders of a majority of
the
outstanding shares of Synvista stock entitled to vote at the annual
meeting is necessary to constitute a quorum at the meeting. Votes
of
stockholders of record who are present at the meeting in person or
by
proxy, abstentions, and broker non-votes are counted for purposes
of
determining whether a quorum
exists.
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Q:
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What
vote is required to approve each proposal and how are votes
counted?
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A:
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Proposal
1: Elect Dr. Berkowitz as a Class B Director
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The
affirmative vote of a plurality of the votes present or represented
by
proxy and entitled to vote at the annual meeting is required to approve
the election of Dr. Berkowitz as a Class B director. Abstentions
are not
counted for purposes of electing directors. Brokerage firms have
authority
to vote customers’ unvoted shares held by the firms in street name on this
proposal. If a broker does not exercise this authority, such broker
non-votes will have no effect on the results of this
vote.
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Proposal
2: Approve Amendment to the Synvista 2005 Stock Plan to Increase
the
Shares Available for Issuance under the Plan
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The
affirmative vote of a majority of the votes present or represented
by
proxy and entitled to vote at the annual meeting is required to approve
the amendment to the Synvista 2005 Stock Plan. Abstentions will be
treated
as votes against this proposal. Brokerage firms do not have authority
to
vote customers’ unvoted shares held by the firms in street name on this
proposal. As a result, any shares not voted by a customer will be
treated
as a broker non-vote. Such broker non-votes will have no effect on
the
results of this vote.
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Proposal
3: Approve a Decrease in the Number of Shares of Synvista Common
Stock
Authorized for Issuance
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The
affirmative vote of the majority of the Company’s outstanding stock is
required to approve a decrease in the number of shares of Synvista
common
stock authorized for issuance as set forth in the certificate of
amendment
to Synvista’s Restated Certificate of Incorporation. Brokerage firms do
not have authority to vote customers’ unvoted shares held by the firms in
street name on this proposal. As a result, any shares not voted by
a
customer will be treated as a broker non-vote. Abstentions and broker
non-votes will be treated as votes against this
proposal.
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Proposal
4: Ratify Selection of Auditors
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The
affirmative vote of a majority of the votes present or represented
by
proxy and entitled to vote at the annual meeting is required to ratify
the
selection of independent auditors. Abstentions will be treated as
votes
against this proposal. Brokerage firms have authority to vote customers’
unvoted shares held by the firms in street name on this proposal.
If a
broker does not exercise this authority, such broker non-votes will
have
no effect on the results of this vote. We are not required to obtain
the
approval of our stockholders to select our independent registered
public
accounting firm. However, if our stockholders do not ratify the selection
of J.H. Cohn LLP as our independent registered public accounting firm
for 2008, the Audit Committee of our Board of Directors may reconsider
its
selection.
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Q:
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Is
voting confidential?
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A:
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We
will keep all the proxies, ballots and voting tabulations private.
We only
let our Inspector of Elections (American Stock Transfer & Trust
Company) examine these documents. Management will not know how you
voted
on a specific proposal unless it is necessary to meet legal requirements.
We will, however, forward to management any written comments you
make, on
the proxy card or elsewhere.
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Q:
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What
are the costs of soliciting these
proxies?
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A:
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Synvista
will pay all of the costs of soliciting the proxies. Synvista directors
and employees may solicit proxies in person or by telephone, fax
or
e-mail. Synvista will pay these employees and directors no additional
compensation for these services. Synvista will ask banks, brokers
and
other institutions, nominees and fiduciaries to forward these proxy
materials to their principals and to obtain authority to execute
proxies.
Synvista will then reimburse them for their
expenses.
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Q:
|
Will
representatives of J.H. Cohn LLP, Synvista’s independent registered public
accounting firm, be present at the annual
meeting?
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A:
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Yes.
Representatives of J.H. Cohn are expected to be present at the annual
meeting, will have the opportunity to make a statement if they desire
to
do so and are expected to be available to respond to appropriate
questions.
|
Q:
|
Who
do I call if I have questions about the
meeting?
|
A:
|
Synvista
stockholders may call Synvista Investor Relations at
201-934-5000.
|
GENERAL
INFORMATION
Our
Board
of Directors is soliciting proxies for the annual meeting of stockholders to
be
held on July 22, 2008 at 10:00 a.m., Eastern Time at the Marriott Park
Ridge, 300 Brae Boulevard, Park Ridge, NJ 07656, and at any adjournment or
postponement of the annual meeting. This proxy statement contains important
information for you to consider when deciding how to vote on the matters before
the annual meeting.
Voting
materials, which include this proxy statement and the proxy card and are
available at [www.________________], will be mailed to stockholders entitled
to
notice of, and to vote at, the annual meeting upon request. Our principal
executive office is located at 221 West Grand Avenue, Suite 200, Montvale,
New
Jersey 07645, and our telephone number is (201) 934-5000.
Solicitation
We
will
bear the cost of solicitation of proxies, including expenses in connection
with
preparing this proxy statement. We will furnish copies of solicitation materials
to brokerage houses, fiduciaries, and custodians to forward to beneficial owners
of our common stock held in their names. In addition, we will reimburse
brokerage firms and other persons representing beneficial owners of stock for
their expenses in forwarding solicitation materials to such beneficial owners.
Original solicitation of proxies by mail may be supplemented by telephone,
telegram and personal solicitation by our directors, officers and other
employees. No additional compensation will be paid to our directors, officers
or
other employees for such services.
Record
Date, Voting Rights and Outstanding Shares
Our
Board
of Directors has set May 28, 2008 as the record date for the annual meeting.
Only holders of record at the close of business on that date will be entitled
to
notice of, and to vote at, the annual meeting. As of May 28, 2008, we had
[__________] shares of common stock and 10,000,000 shares of Series B Preferred
Stock outstanding. Each share of common stock is entitled to one vote on each
proposal that will come before the annual meeting. Each holder of Series B
Preferred Stock is entitled to cast the number of votes equal to one-half of
the
number of whole shares of common stock into which the shares of Series B
Preferred Stock held by such holder are convertible as of the record date.
The
Series B Preferred Stock is convertible into common stock at any time at the
option of the holder at an initial conversion rate of 1:1, subject to
adjustment. A majority of the outstanding shares of stock will constitute a
quorum at the annual meeting. Abstentions and broker non-votes (as described
below) are counted as present for purposes of determining the presence or
absence of a quorum for the transaction of business.
Broker
Non-Votes
A
broker
non-vote occurs when a broker cannot vote a customer’s shares registered in the
broker’s name because the customer did not send the broker instructions on how
to vote on the matter. If the broker does not have instructions and is barred
by
law or applicable rules from exercising its discretionary voting authority
in
the particular matter, then the shares will not be voted on the matter,
resulting in a “broker non-vote.”
Revocability
of Proxy and Voting of Shares
Any
stockholder giving a proxy has the power to revoke it at any time before the
annual meeting. It may be revoked by mailing to our Secretary at our principal
executive offices, 221 West Grand Avenue, Suite 200, Montvale, New Jersey 07645,
an instrument of revocation or a duly executed proxy bearing a later date.
If a
stockholder is permitted to vote electronically via the Internet or telephone,
a
proxy may be revoked by the submission of a later electronic proxy. A proxy
may
also be revoked by attendance at the annual meeting and an election given to
our
Secretary to vote in person (subject to the restriction that a stockholder
holding shares in street name must bring to the annual meeting a legal proxy
from the broker, bank or other nominee holding that stockholder’s shares that
confirms that stockholder’s beneficial ownership of the shares and gives the
stockholder the right to vote the shares). If not revoked, the proxy will be
voted at the annual meeting in accordance with the stockholder’s instructions.
If no instructions are indicated, the proxy will be voted (i) FOR each
proposal presented by Synvista management for a vote at the meeting and
(ii) according to the best judgment of the proxy holder if a proposal comes
up for a vote at the annual meeting that is not on the proxy card or for the
adjournment or postponement of the annual meeting.
Dissenters’
Rights of Appraisal
Our
stockholders do not have dissenters’ rights of appraisal with respect to any of
the proposals being voted upon at the annual meeting.
Electronic
Delivery of Stockholder Communications
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting
of
Stockholders of Synvista Therapeutics, Inc. to Be Held on July 22,
2008.
· |
The
proxy statement, annual report to security holders for the year ended
December 31, 2008 and the proxy card are available at
[www._____________].
|
· |
The
annual meeting of stockholders will be held on July 22, 2008 at 10:00
a.m., Eastern Time at the Marriott Park Ridge, 300 Brae Boulevard,
Park
Ridge, NJ 07656.
|
· |
The
annual meeting of stockholders will be held for the following
purposes:
|
|
1.
|
To
elect Noah Berkowitz, M.D., Ph.D. as a Class B director to hold office
until the 2011 annual meeting of stockholders and until his successor
has
been duly elected and qualified;
|
|
2.
|
To
approve an amendment to the Company’s 2005 Stock Plan to increase the
number of shares of common stock authorized for issuance under the
Plan
from 1,060,000 to 2,000,000;
|
|
3.
|
To
approve an amendment to the Company’s Restated Certificate of
Incorporation to decrease the number of shares of common stock authorized
for issuance from 300,000,000 to
150,000,000;
|
|
4.
|
To
ratify the selection of J.H. Cohn LLP as the Company’s independent
registered public accounting firm for the fiscal year ending
December 31, 2008; and
|
|
5.
|
To
transact such other business as may properly come before the meeting
or
any adjournment or postponement
thereof.
|
· |
Synvista’s
Board of Directors recommends voting “FOR” all of the proposals listed
above.
|
· |
You
are urged to attend the annual meeting and vote in person, but if
you are
unable to do so, the Board of Directors would appreciate your prompt
vote
electronically via the Internet or telephone or, if you request paper
copies of a proxy card, via regular mail. We strongly
encourage you to vote
electronically.
|
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of April 15, 2008, except as otherwise set
forth below, by (i) each person who is known by us to own beneficially more
than 5% of the common stock, (ii) each director, (iii) each named
executive officer and (iv) all current directors and named executive
officers as a group. Unless otherwise indicated, the address for each director
and executive officer listed is 221 West Grand Avenue, Suite 200, Montvale,
NJ
07645.
Name
of Beneficial Owner(1)
|
|
|
Amount and Nature of Beneficial Ownership(1)
|
|
|
Percent
of
Class(2)
|
|
Genentech,
Inc.
1
DNA Way
South
San Francisco, CA 94080-4990
|
|
|
285,813
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
Atticus
Capital LP
767
Fifth Avenue, 12th
Floor
New
York, NY 10153(3)
|
|
|
2,000,000
|
(3)**
|
|
43
|
%
|
|
|
|
|
|
|
|
|
Julian
C. Baker and Felix J. Baker
Baker
Bros. Advisors
667
Madison Avenue
New
York, NY 10021(4)
|
|
|
10,500,000
|
(4)**
|
|
80
|
%
|
|
|
|
|
|
|
|
|
Noah
Berkowitz, M.D., Ph.D.
|
|
|
211,634
|
(5)
|
|
8
|
%
|
Noah
C. Berkowitz Family Trust
|
|
|
11,756
|
(6)
|
|
*
|
|
John
F. Bedard
|
|
|
—
|
|
|
*
|
|
Malcolm
W. MacNab, M.D., Ph.D.
|
|
|
26,126
|
|
|
*
|
|
Carl
M. Mendel, M.D., Ph.D.
|
|
|
—
|
|
|
*
|
|
Mary
C. Tanner
|
|
|
146,275
|
(7)
|
|
6
|
%
|
Wayne
P. Yetter
|
|
|
17,236
|
(8)
|
|
*
|
|
All
current directors and officers as a group (6 persons)
|
|
|
772,714
|
(9)
|
|
25
|
%
|
*Less
than one percent
**Assumes
that shares of Series B Preferred Stock have been converted to common
stock.
(1)
|
Beneficial
ownership is determined in accordance with the rules of the Securities
and
Exchange Commission, and generally includes voting or investment
power
with respect to securities. Shares of common stock subject to stock
options and warrants currently exercisable or exercisable within
60 days
are deemed outstanding for computing the percentage ownership of
the
person holding such options and the percentage ownership of any group
of
which the holder is a member, but are not deemed outstanding for
computing
the percentage ownership of any other person. Except as indicated
by
footnote, and subject to community property laws where applicable,
the
persons named in the table have sole voting and investment power
with
respect to all shares of common stock shown as beneficially owned
by
them.
|
(2)
|
Applicable
percentage of ownership is based on 2,586,326 shares of common stock
outstanding as of April 15, 2008. As of that date, there were 10,000,000
shares of Series B preferred stock outstanding, which were convertible
into 10,000,000 shares of common stock. There were also outstanding
as of
that date warrants to purchase 2,500,000 shares of Series B preferred
stock, which are currently exercisable. The shares of Series B preferred
stock underlying the warrants are also convertible into 2,500,000
shares
of common stock.
|
(3)
|
Number
of shares beneficially owned based solely upon a Schedule 13D/A filed
jointly by Atticus Capital LP, Atticus Management Limited and Timothy
R.
Barakett on January 3, 2008. According to the Schedule 13D/A, Atticus
Capital LP, Atticus Management Limited and Mr. Barakett beneficially
own
an aggregate of 2,000,000 shares of common stock, including an
aggregate number of shares of common stock that may be acquired upon
conversion of Series B Preferred Stock and shares that may be acquired
upon the exercise of warrants to purchase shares of Series B Preferred
Stock. The address of the principal business and principal office
of each
of Atticus Capital LP and Mr. Barakett is 767 Fifth Avenue,
12th
Floor, New York, NY 10153. The address of the principal business
and
principal office of Atticus Management is P.O. Box 100, Sydney Vane
House,
Admiral Park, St. Peter Port, Guernsey GY1
3EL.
|
(4)
|
Number
of shares beneficially owned based solely upon a Schedule 13D filed
jointly by Julian C. Baker and Felix J. Baker, each a Managing Member
of
Baker Bros. Advisors. The number of shares beneficially owned includes
an
aggregate number of shares of common stock that may be acquired upon
conversion of Series B Preferred Stock and shares that may be acquired
upon the exercise of warrants to purchase shares of Series B Preferred
Stock. According to the Schedule 13D, the number of shares beneficially
owned are held by the following entities: (i) 9,323 shares held by
Baker
Bros. Investments II, L.P., (ii) 2,740,840 shares held by Baker Biotech
Fund I, L.P., (iii) 7,438,590 shares held by Baker Brothers Life
Sciences,
L.P., (iv) 240,276 shares held by14159, L.P. and (v) 70,971 shares
held by
Baker/Tisch Investments. By virtue of their ownership of entities
that
have the power to control the investment decisions of the limited
partnerships, Julian C. Baker and Felix J. Baker may be deemed to
be
beneficial owners of the shares owned by Baker Bros. Investments
II, L.P.,
Baker Biotech Fund I, L.P., Baker Brothers Life Sciences, L.P., 14159,
L.P. and Baker/ Tisch Investments, L.P., and may be deemed to have
shared
power to vote or dispose of such securities owned by such
entities.
|
(5)
|
Includes
65,000 shares of common stock subject to options which were exercisable
as
of April 15, 2008.
|
(6)
|
Dr. Berkowitz’s
wife is the trustee and has the power to vote and dispose of the
shares.
Dr. Berkowitz disclaims beneficial ownership of the
shares.
|
(7)
|
Includes
107,442 shares of common stock held directly by Ms. Tanner and 38,833
shares of common stock subject to options and warrants which were
exercisable as of April 15, 2008.
|
(8)
|
Includes
6,127 shares of common stock held directly by Mr. Yetter and 7,909
shares of common stock subject to options that were exercisable as
of
April 15, 2008.
|
(9)
|
Includes
257,003 shares of common stock held directly by all current officers
and
directors and 72,868 shares of common stock subject to options and
warrants which were exercisable as of April 15,
2008.
|
MANAGEMENT
The
Board of Directors
Pursuant
to our Restated Certificate of Incorporation, our Board of Directors is divided
into three classes, each of which serves a term of three years. Class
B consists of Dr. Berkowitz, whose term will expire at the annual meeting
of stockholders in 2008. Class C consists of Ms. Tanner and
Mr. Yetter, whose terms will expire at the annual meeting of stockholders
in 2009. Class A consists of Mr. John F. Bedard, whose term will expire at
the annual meeting of stockholders in 2010.
The
current Board of Directors is comprised of the following
persons:
|
|
|
|
Served
as a
|
|
|
|
Name
|
|
Age
|
|
Director Since
|
|
Positions with Synvista
|
|
John
F. Bedard
|
|
|
58
|
|
|
2007
|
|
|
Director
|
|
Noah
Berkowitz, M.D., Ph.D.
|
|
|
44
|
|
|
2006
|
|
|
President,
Chief Executive Officer and Director
|
|
Mary
C. Tanner
|
|
|
57
|
|
|
2006
|
|
|
Director
|
|
Wayne
P. Yetter
|
|
|
62
|
|
|
2006
|
|
|
Director
|
|
Our
Board
has determined that the following members of the Board qualify as independent
under the definition promulgated by the American Stock Exchange:
Mr. Bedard, Ms. Tanner and Mr. Yetter.
The
principal occupations and business experience, for at least the past five years,
of each director are as follows:
John
F. Bedard,
has
served as a director of the Company since September 2007. Mr. Bedard has also
been on the Board of Directors for EpiCept Corporation since January 2006.
Prior
to that time he was on the Board of Directors for Maxim Pharmaceuticals
(October, 2004 to January, 2006) until the merger of Maxim with EpiCept. Mr.
Bedard started consulting after his retirement from Bristol-Myers Squibb (BMS)
in 2002. At BMS, Mr. Bedard was Vice President, FDA Liaison & Global
Strategy, where for the last 14 years he directed the development and
registration programs for cardiovascular, metabolic, dermatology, and immunology
programs. He also directed the worldwide Good Laboratory Practice and Good
Clinical Practice programs for BMS. Over his 25-year career, Mr. Bedard has
directed development and registration programs in numerous therapeutic areas.
A
partial listing of Mr. Bedard’s development program experience follows:
Pravachol® for hyperlipidemia, primary and secondary prevention of MI, stroke,
and revascularization; Capoten® for post-MI and diabetic nephropathy; Monopril®
for hypertension; Avapro for hypertension; Glucovance® for Type 2 diabetes;
Glucophage XR for Type 2 diabetes; Dovonex® for psoriasis; Vaniqa® for female
hirsutism; Inderal® for post-MI and Inderal LA; and Droxia® for sickle cell
anemia. Four of the development programs became marketed franchises with annual
sales in excess of $1 billion. Mr. Bedard is a member of DIA, NY Academy of
Sciences, and the American Association for the Advancement of Science (AAAS).
He
received a B.A. in Chemistry from Rutgers University and an M.S. in Chemistry
from St Joseph’s University.
Noah
Berkowitz, M.D., Ph.D.,
the
Company’s President and Chief Executive Officer, joined the Company following
its merger with HaptoGuard in July 2006. Dr. Berkowitz earned his
B.A., M.D., and Ph.D. from Columbia University and trained at the National
Cancer Institute in medical oncology. Prior to founding HaptoGuard in 2004,
he
was a consultant to a variety of biotechnology companies in Israel, including
Predix Pharmaceuticals, IDGene and Teva. He was previously Vice President of
Clinical Development at IMPATH Inc., a NASDAQ-traded, “cancer information
company,” where he co-developed a division, IMPATH Predictive Oncology, focused
on biopharmaceutical partnerships supporting the discovery and development
of
cancer-related, targeted diagnostics and therapeutics. Prior to IMPATH,
Dr. Berkowitz was the founder of Physician Choice Inc., a contract research
organization specializing in pharmacoeconomics and outcomes.
Mary
C. Tanner
has
served as a director of the Company since July 2006. Ms. Tanner is a
Principal and founder of Life Sciences Partners, a healthcare advisory and
investment firm. Previously, from 2000 to 2004, she was Senior Managing Director
at Bear Stearns & Co., and held increasing positions in investment banking
at Lehman Brothers from 1979 to 1999, including Senior Managing Director and
head of the Life Sciences practice at Lehman Brothers, Inc. During her 25 year
career on Wall Street, Ms. Tanner has worked on or supervised over 550
transactions with a total value of over $175 billion, including ten large
pharmaceutical mergers. Ms. Tanner is also a member of the Board of Directors,
as well as the Audit Committee, of Evotec AG. Ms. Tanner is a member of the
Dean’s Council of the Yale Medical School. Ms. Tanner received her B.A.
from Harvard University.
Wayne
Yetter
has
served as a director of the Company since July 2006. Mr. Yetter has
served as Chief Executive Officer of Verispan, LLC, a healthcare information
company founded by Quintiles Transnational Corp. and McKesson Corp, since
September 2005. From November 2004 through September 2005,
Mr. Yetter served as President and Chief Executive Officer of Odyssey
Pharmaceuticals, Inc. to assist Odyssey’s parent, PLIVA d.d., implement its
strategy to exit the proprietary pharmaceutical business. After serving in
Vietnam, Mr. Yetter began his career in the pharmaceuticals industry in
1970 as a sales representative for Pfizer. From Pfizer, he joined Merck & Co
in 1977, where he led the Marketing Operations Group and then became President
of the Asia Pacific region before starting the new company, Astra Merck, in
1991
as President and CEO. Mr. Yetter then joined Novartis Pharmaceuticals in
1997, where he was President and CEO of the U.S. pharmaceutical business. In
1999, he joined IMS and later led its spinout company, Synavant, where he was
Chairman and CEO for three years before the company merged with Dendrite
International in 2003. Following the merger, Mr. Yetter founded and has
acted as principal of BioPharm Advisory LLC since September 2003.
Mr. Yetter was formerly Chairman of the Board for Transkaryotic Therapies
Inc., which was acquired by Shire Pharmaceuticals in 2005. Mr.
Yetter is also a member of the Board of Directors of Noven Pharmaceuticals,
Inc., Epicept Corporation and Infusystems Holdings, Inc. Mr. Yetter was also
named non-executive Chairman of the Board of Noven Pharmaceuticals in January
2008. Mr. Yetter
received his B.A. in Biology from the Wilkes University, and his M.B.A.
from Bryant University.
Committees
of the Board of Directors and Meetings
The
Board
of Directors has a Compensation Committee, which reviews incentive compensation
for employees of and consultants to Synvista, as well as salaries and incentive
compensation of executive officers. In 2007, the Compensation Committee was
comprised of Mary C. Tanner and Wayne P. Yetter.
The
Board
of Directors has a Nominating and Governance Committee, which we refer to in
this document as the Nominating Committee, which reviews the qualifications
of
candidates and proposes nominees to serve as directors on our Board of Directors
and nominees for membership on Board committees, develops and recommends to
the
Board corporate governance guidelines applicable to the Company and leads the
Board of Directors in the annual review of the Board’s performance. In 2007, the
Nominating Committee was comprised of John F. Bedard, Mary C. Tanner and Wayne
P. Yetter.
The
Board
of Directors has an Audit Committee, which oversees the accounting and financial
reporting processes and the audits of our financial statements. In 2007, the
Audit Committee was comprised of John F. Bedard, Mary C. Tanner and Wayne P.
Yetter. Please see the report of the Audit Committee included elsewhere in
this
proxy statement.
All
of
the current members of the Compensation Committee, the Nominating Committee
and
the Audit Committee are independent, as such term is defined by Section 121.A
of
the American Stock Exchange listing standards. Our Board of Directors has
determined that Ms. Tanner is an “audit committee financial expert,” as defined
in Item 407(d)(5)(ii) of Regulation S-K.
The
Audit
Committee held 7 meetings, the Compensation Committee held 4 meetings and the
Nominating Committee held 1 meeting during the year ended December 31,
2007. There were 11 meetings of the Board of Directors in 2007. Each of the
incumbent directors attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Directors held during the year ended
December 31, 2007 and (ii) the total number of meetings held by all
committees of the Board on which he or she served during the year ended
December 31, 2007. The Board has adopted written charters for each of the
Audit Committee, the Compensation Committee and the Nominating Committee. These
written charters are available on our website at www.Synvista.com.
Director
Nomination Process
The
Nominating Committee reviews the qualifications of candidates and proposes
nominees to serve as directors on our Board of Directors and nominees for
membership on Board committees. It is the Nominating Committee’s policy to
consider potential candidates for Board membership recommended by its members,
management, stockholders and others. The Nominating Committee has not
established any specific minimum qualifications that must be met for a
recommendation for a position on the Board of Directors. Instead, the Nominating
Committee conducts appropriate and necessary inquiries into the backgrounds
and
qualifications of possible candidates for nomination to the Board of Directors
giving due consideration to such criteria, including without limitation,
diversity, experience, skill set and the ability to act on behalf of
stockholders, as it believes appropriate and in the best interests of Synvista
and its stockholders. All potential director candidates are evaluated based
upon
the same criteria, and the Nominating Committee makes no distinction in its
evaluation of candidates based upon whether such candidates are recommended
by
stockholders or others. Once the evaluation is complete, the Nominating
Committee recommends the nominees to the Board of Directors, which makes the
final determination. If a stockholder wishes to nominate a candidate to be
considered for election as a director at the 2009 annual meeting of stockholders
using the procedures set forth in our amended and restated by-laws, it must
follow the procedures described in “Advance Notice of Stockholder Nominees for
Director and Other Stockholder Proposals” set forth in our amended and restated
by-laws. If a stockholder wishes simply to propose a candidate for consideration
as a nominee by the Nominating Committee, it should follow the procedures set
forth in Appendix B, “Procedures for Shareholders Submitting Nominating
Recommendations,” to our Nominating Committee Charter, which is available on our
website at www.Synvista.com.
Stockholder
Communications to the Board
Stockholders
and other parties interested in communicating directly with the Board of
Directors may do so by writing to any Board of Director, c/o Synvista
Therapeutics, Inc., 221 West Grand Avenue, Suite 200, Montvale, New Jersey
07645. All correspondence received by Synvista and addressed to a member of
the
Board or the full Board will be forwarded directly to the Board of
Directors.
Director
Attendance at Annual Meeting
All
of
our incumbent Directors, except for Mr. Bedard, attended our annual meeting
of
stockholders in 2007. Mr. Bedard was not serving on our Board of Directors
at
the time of our 2007 annual meeting. Each Director is expected to dedicate
sufficient time, energy and attention to ensure the diligent performance of
his
or her duties, including attending meetings of the stockholders, the Board
and
committees of which he or she is a member.
Executive
Officer
The
following table sets forth certain information regarding our executive officer
who is not also a director. We have an employment agreement with Noah Berkowitz,
M.D., the terms of which are described elsewhere in this proxy
statement.
Name
|
|
Age
|
|
Position
|
Carl
M. Mendel, M.D.
|
|
53
|
|
Vice
President of Clinical Development and Chief Medical
Officer
|
Carl
M. Mendel, M.D.,
has
served as our Vice President of Clinical Development and Chief Medical Officer
since September 2007. Dr. Mendel received his B.A. from Columbia University
in
New York and his M.D. from the University of California, San Diego. He did
his
post-graduate training in Internal Medicine at LAC/USC Medical Center in Los
Angeles and in Endocrinology and Metabolism at the University of California,
San
Francisco, where he joined the faculty as Assistant Professor of Medicine.
He is
board certified in Internal Medicine and in Endocrinology and Metabolism. He
joined the pharmaceutical industry in 1993 and has held positions of increasing
responsibility at Merck, Knoll, Aventis, and sanofi-aventis. He joined Synvista
in October, 2007 from sanofi-aventis, where he was Vice President of Metabolism
Projects. Dr. Mendel has had extensive experience working in both early- and
late-stage drug development, as well as in medical affairs (supporting marketed
products), and has contributed to a number of drug approvals. He has led
numerous collaborations and co-development projects with other companies and
has
significant in-licensing experience.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table provides certain information concerning the compensation earned
for the last two fiscal years by our principal executive officer and our two
other most highly compensated executive officers who were serving as executive
officers as of December 31, 2007. We refer to the officers listed in the table
below collectively as our “Named Executive Officers.”
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Option
Awards
($)(2)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
Noah
Berkowitz, M.D., Ph.D.
|
|
|
2007
|
|
|
264,000
|
|
|
83,160
|
(1)
|
|
85,916
|
|
|
12,000
|
(3)
|
|
445,076
|
|
President
and Chief Executive Officer
|
|
|
2006
|
|
|
240,000
|
|
|
54,000
|
(4)
|
|
—
|
|
|
3,558
|
(3)
|
|
297,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl
M. Mendel, M.D., Ph.D.(5)
|
|
|
2007
|
|
|
66,250
|
|
|
20,000
|
|
|
11,707
|
|
|
—
|
|
|
97,957
|
|
Vice
President, Clinical Development and Chief Medical Officer
|
|
|
2006
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malcolm
W. MacNab, M.D., Ph.D. (6)
|
|
|
2007
|
|
|
240,000
|
|
|
72,000
|
|
|
133,808
|
|
|
22,000
|
(8)
|
|
467,808
|
|
Former
Vice President, Clinical Development
|
|
|
2006
|
|
|
240,000
|
|
|
36,000
|
(7)
|
|
58,206
|
|
|
—
|
|
|
334,206
|
|
|
Represents
a cash bonus for performance during the fiscal year ended December
31,
2007, which was paid in 2007.
|
(2)
|
Represents
the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended December 31, 2007, in accordance with FAS
123(R), of awards pursuant to the stock option program. Assumptions
used
in the calculations of this amount are included in Note 11 - Stockholders’
Equity to our audited consolidated financial statements for the fiscal
year ended December 31, 2007 included in our Annual Report on Form
10-K filed with the Securities and Exchange Commission on March 31,
2008.
|
(3)
|
Represents
an expense for a car allowance.
|
(4)
|
Represents
a cash bonus for performance during the fiscal year ended
December 31, 2006, which was paid in
2007.
|
(5)
|
Dr.
Mendel’s employment with us commenced in October
2007.
|
(6)
|
Dr.
MacNab resigned as our Vice President, Clinical Development on
December 31, 2007.
|
(7)
|
Represents
a cash bonus for performance during the fiscal year ended
December 31, 2006, which was paid in
2007.
|
(8)
|
Represents
the costs of Dr. MacNab’s commuting from his home in Massachusetts to our
offices in New Jersey.
|
Narrative
Disclosure to Summary Compensation Table
Employment
Agreements
Noah
Berkowitz, M.D., Ph.D.
President
and Chief Executive Officer
On
February 1, 2007, we entered into an amendment to Dr. Berkowitz’s
Employment Agreement dated March 1, 2005. Pursuant to the amendment,
Dr. Berkowitz is entitled to receive an annual base salary of $264,000.
Effective as of January 1, 2008, Dr. Berkowitz will be entitled to receive
an
annual base salary of $300,000. He is also eligible to receive an annual
cash bonus in an amount up to 35% of his annual base salary, based upon the
achievement of certain milestones and objectives. For 2008, the Compensation
Committee determined that such milestones and objectives shall relate to
progress in the clinical trials of the Company’s product candidates SYI-2074 and
alagebrium, the continued development of the Company’s haptoglobin diagnostic
test, funding of the Company and further strengthening the Company’s profile
with the investment community and the Company’s internal corporate organization.
The percentage amount associated with each of these objectives is established
in
the first quarter of each fiscal year by the Compensation Committee.
Dr. Berkowitz also receives a car allowance in the amount of $1,000 per
month.
Dr. Berkowitz
is entitled to certain benefits in connection with a termination of his
employment or a change in control discussed below under “—Potential Payments
Upon Termination of Change in Control.”
Malcolm
MacNab, M.D., Ph.D.
Former
Vice President, Clinical Development
On
February 1, 2007, the Board of Directors amended Dr. MacNab’s Employment
Agreement dated February 7, 2005. Pursuant to this amendment,
Dr. MacNab was entitled to receive an annual base salary of $240,000, and
in lieu of an increase in base salary, we were obligated to pay travel expenses
to our offices in New Jersey from his home in Massachusetts. He was also
eligible to receive an annual cash bonus in an amount up to 30% of his annual
base salary. One-half of his bonus was dependent on the achievement of corporate
milestones and one-half of his bonus was dependent on the achievement of
individual milestones. The annual milestones, as well as the specified
percentage of the total bonus of each specific milestone, were established
by
the Chief Executive Officer and/or the Board of Directors.
Dr. MacNab
resigned from the Company on December 31, 2007 and is providing services to
us
as a consultant. He has been contracted for a period of 12 months for a monthly
consulting fee of $5,000 per month.
On
November 1, 2006, Dr. MacNab received an option to purchase 20,000
shares of common stock. The amount of this grant was based on targeting 1.5%
ownership of the Company on a fully diluted basis. The fair value of this award
using the Black-Scholes model is $142,100. These options will become exercisable
in four equal annual installments commencing on January 1, 2007 until fully
vested, and will continue to vest during the time Dr. MacNab provides consulting
services to us.
In
addition to provisions in the above-described agreements requiring each
individual to maintain the confidentiality of our information and assign
inventions to us, the above named executive officers have agreed that during
the
terms of their agreements and for one year thereafter, they will not compete
with us by engaging in any capacity in any business that is competitive with
our
business.
Carl
Mendel, M.D., Ph.D.
Vice
President, Chief Development and Chief Medical Officer
Dr.
Mendel is an at-will employee of ours. He currently receives an annual base
salary of $275,000. He is also eligible to receive an annual cash bonus in
an
amount up to 20% of his annual base salary, based upon the achievement of
certain milestones and objectives. The percentage amount associated with each
of
these milestones will be established in the first quarter of the year by the
Compensation Committee.
401(k)
Plan
We
have a
tax-qualified employee savings and retirement plan (the “401(k) Plan”) covering
all of our employees. Pursuant to the 401(k) Plan, employees may elect to reduce
their current compensation by up to the statutorily prescribed annual limit,
which was $15,000 in 2006, and have the amount of such reduction contributed
to
the 401(k) Plan. The 401(k) Plan does not require that we make additional
matching contributions to the 401(k) Plan on behalf of participants in the
401(k) Plan. However, in 1998, we began making discretionary contributions
at a
rate of 25% of employee contributions up to a maximum of 5% of their base
salary. Contributions by employees to the 401(k) Plan and income earned on
such
contributions are not taxable to employees until the contributions are withdrawn
from the 401(k) Plan. The Trustees under the 401(k) Plan invest the assets
of
the 401(k) Plan at the direction of each participant.
2007
Bonus
Our
compensation program provides executive officers with the opportunity to earn
an
annual cash incentive award, the amount of which is based upon (1) the
position level of the executive officer, and (2) the attainment of specific
individual non-financial performance objectives. The Compensation Committee
sets
these performance objectives at the beginning of the fiscal year. Currently,
executive officers and certain senior non-executive employees may be eligible
for annual performance-based cash bonuses in amounts ranging from 15%-35% of
their base salaries, as set forth in their employment offer letters. In its
discretion, the Compensation Committee may, however, award bonus payments to
our
executive officers above or below the amounts specified in their respective
offer letters, depending on the achievement by the executive officers of
performance goals as set and determined by the Committee. As provided in his
employment agreement, our Chief Executive Officer is eligible for an annual
performance-based bonus of up to 35% of his annual base salary, the specific
amount of which, if any, will be determined by the Board of Directors or the
Compensation Committee in their sole discretion. The 2007 bonus for our Chief
Executive Officer, Dr. Berkowitz, was determined based on the achievement of
specific performance goals during the fiscal year ended December 31, 2007,
including (1) funding the organization and completion of a financing, (2)
reasonable efforts to resolve the material weaknesses in the Company’s financial
statements, (3) expanding the scientific knowledge base of the Company, (4)
advancing the Company’s clinical programs, (5) building the corporate
organization and expanding its clinical development staff, (6) strengthening
the
Company’s organizational atmosphere and culture, and (7) improving communication
with the Board. The Board of Directors determined that, during 2007, Dr.
Berkowitz had achieved a significant financing for the Company and had made
meaningful progress in advancing the Company’s clinical programs and concluded
that Dr. Berkowitz had accomplished 90% of the overall objectives that had
been
set. Accordingly, the Board concluded that Dr. Berkowitz was entitled to
receive, and would receive, an award of 90% of his target bonus opportunity
under the 2007 management incentive program.
Outstanding
Equity Awards at Fiscal Year-End
The
following table shows grants of stock options and grants of unvested stock
awards outstanding on the last day of the fiscal year ended December 31,
2007, including both awards subject to performance conditions and
non-performance-based awards, to each of the executive officers named in the
Summary Compensation Table. During the year ended December 31, 2007, none of
the
Named Executive Officers exercised any of their stock options. Each of the
stock
options granted to our Named Executive Officers expires ten years after the
date
of the grant. Unless otherwise noted, the stock options vest in equal quarterly
installments over a four-year period commencing on the date
of grant.
Option
Awards
Name
|
|
Option Grant
Date
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Noah
Berkowitz, M.D., Ph.D.
|
|
|
10/3/2007
|
|
|
65,000
|
|
|
395,000
|
(1)
|
|
2.67
|
|
|
10/3/2017
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malcolm
W. MacNab, M.D., Ph.D.
|
|
|
11/1/2006
|
|
|
—
|
|
|
20,000
|
(2)
|
|
7.50
|
|
|
11/1/2016
|
|
Former
Vice President, Clinical Development
|
|
|
2/7/2005
|
|
|
17,605
|
|
|
3,521
|
(3)
|
|
8.00
|
|
|
2/07/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl
M. Mendel, M.D.
|
|
|
10/1/2007
|
|
|
—
|
|
|
70,000
|
(4)
|
|
3.00
|
|
|
10/1/2017
|
|
Vice
President of Clinical Development and
Chief
Medical Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
option grant of 460,000 shares contains the following vesting provisions:
260,000 shares vesting 25% immediately and 25% per year over three
years
from the date of grant; and 200,000 restricted option shares with
the
restriction on 50,000 shares removed for the achievement of each
of four
milestones relating to progress and timing in the clinical development
of
SYI-2074 and alagebrium and other preclinical developments. The options
will vest 50% at the time the restriction is removed and 25% over
each of
the following two years.
|
(2)
|
The
options vest in four equal annual installments commencing on
January 1, 2007 until fully
vested.
|
(3)
|
The
options vest semi-annually over three years commencing on February 7,
2005.
|
(4)
|
The
options vest in four equal annual installments commencing on October
1,
2007.
|
Potential
Payments upon Termination or Change-In-Control
Noah
Berkowitz, M.D., Ph.D.,
President
and Chief Executive Officer
The
employment agreement with Dr. Berkowitz provides for two types of
terminations:
·
|
“Termination
of Employment by the Company.” In the event that Dr. Berkowitz is
terminated due to Disability, as that term is defined in Dr. Berkowitz’s
employment agreement, we are obligated to pay his salary and benefits
for
12 months following the date of termination in equal, monthly
installments. For a termination constituting Cause, as that term
is
defined in Dr. Berkowitz’s employment agreement, we are obligated to pay
only his accrued and unpaid salary and benefits through the date
of such
termination. All unvested options on the termination date will be
cancelled. In the event of a termination Without Cause, as that term
is
defined in Dr. Berkowitz’s employment agreement, is determined by a
majority vote of the Board of Directors, Dr. Berkowitz is entitled to
receive his salary and benefits for a period of 12 months after the
termination date. In addition, the monthly vesting of his options
shall
continue for an additional 12 months from the termination date. If
Dr. Berkowitz had been terminated without cause on December 31,
2007, he would have been eligible to receive an aggregate of approximately
$266,500, which is inclusive of his annual salary and life insurance
premium benefit.
|
·
|
“Termination
of Employment by the Executive.” Dr. Berkowitz may choose to resign
from his position for “Good Reason.” Events that qualify as Good Reason
include (i) a change in his title or responsibilities, (ii) our
failure to provide executive salary or benefits, or (iii) the
relocation of our primary office to a location, or the requirement
to
perform a majority of his duties at any location to which the commute
time
exceeds one hour and fifteen minutes. If Dr. Berkowitz elects to
terminate his employment due to event (i) or (ii), we are obligated
to pay his salary and benefits for a period of 12 months after the
termination date. The monthly vesting of his options shall continue
for an
additional 12 months from the termination date. If he elects to terminate
his employment due to event (iii), we would be obligated to pay his
salary
and benefits for a period of six months after the termination date.
If
Dr. Berkowitz had been terminated under the above circumstance on
December 31, 2007, he would have been eligible to receive an
aggregate of approximately $133,250, which is inclusive of six months
of
salary and life insurance premium benefit. The monthly vesting of
his
options shall continue for an additional six months from the termination
date.
|
If
Dr. Berkowitz elects to terminate his employment for any other reason than
those stated above, his employment agreement will terminate immediately and
he
would receive the accrued and unpaid salary benefits through the date of such
termination.
Malcolm
MacNab, M.D., Ph.D.,
Former
Vice President, Clinical Development
Pursuant
to our Stock Option Grant Agreement with Dr. MacNab dated November 1,
2006, upon a change in control, any portion of Dr. MacNab’s options, which
are not vested and exercisable, shall vest and become exercisable immediately
prior to a change in control. As defined in the Stock Option Grant Agreement,
a
change in control shall be deemed to occur if (i) we are merged with or
into or consolidated with another corporation or other entity under
circumstances where our stockholders immediately prior to such merger or
consolidation do not own after such merger or consolidation shares representing
at least 50% of the voting power of us or the surviving or resulting corporation
or other entity, as the case may be, or (ii) we are liquidated, sell or
otherwise dispose of substantially all of our assets to another corporation
or
entity, or (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 40% or more of our common stock other than pursuant to a plan
or arrangement entered into by such person and us or otherwise approved by
our
Board of Directors, or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board
of
Directors shall cease for any reason to constitute a majority of the Board
unless the election or nomination for election by our stockholders of each
new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period. If
Dr. MacNab had been terminated under the above circumstance on
December 31, 2007, he would have been eligible to purchase 17,605 shares of
common stock subject to options.
Dr.
MacNab resigned as Vice President, Clinical Development on December 31,
2007.
Director
Compensation
The
following table shows the total compensation paid or accrued during the fiscal
year ended December 31, 2007 to each person who served as a director of
ours during 2007.
Name
|
|
Fees
Earned
or Paid
in Cash
($)
|
|
Stock
Awards
($)(1)
|
|
Option
Awards
($)(2)
|
|
Total
($)
|
|
Noah
Berkowitz, M.D., Ph.D.(3)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
John
F. Bedard (4)
|
|
|
32,024
|
|
|
—
|
|
|
37,995
|
|
|
70,019
|
|
Marilyn
Breslow(5)
|
|
|
6,500
|
|
|
24,000
|
|
|
—
|
|
|
30,500
|
|
Kenneth
I. Moch(6)
|
|
|
1,500
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
Thomas
A. Moore(7)
|
|
|
4,250
|
|
|
24,000
|
|
|
—
|
|
|
28,250
|
|
Mary
C. Tanner(8)
|
|
|
33,000
|
|
|
15,689
|
|
|
40,449
|
|
|
89,138
|
|
Wayne
Yetter(9)
|
|
$
|
41,750
|
|
$
|
15,689
|
|
$
|
40,449
|
|
$
|
97,888
|
|
(1)
|
Represents
the amount we have expensed during 2007 under FAS 123(R) for outstanding
restricted stock granted in previous fiscal years. Assumptions used
in the
calculation are included in Note 11 - Stockholders’ Equity to our audited
consolidated financial statements for the fiscal year ended
December 31, 2007 included in our Annual Report on Form 10-K filed
with the Securities and Exchange Commission on March 31,
2008.
|
(2)
|
Represents
the amount we have expensed during 2007 under FAS 123(R) for outstanding
stock option awards granted in 2007 and in previous fiscal years.
Assumptions used in the calculation are included in Note 11 -
Stockholders’ Equity to our audited consolidated financial statements for
the fiscal year ended December 31, 2007 included in our Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
March 31, 2008.
|
(3)
|
Dr. Berkowitz,
our President and Chief Executive Officer, receives no compensation
for
his services as Director.
|
(4)
|
On
September 7, 2007, Mr. Bedard joined our Board of Directors. In connection
with his appointment, he received a stock option to purchase 30,000
shares
of our common stock. The stock option has an exercise price of $4.40,
the
closing price of our common stock on the American Stock Exchange
on the
grant date. The stock option has a grant date fair value of $4.03.
The
stock option vests over one year. As of December 31, 2007, there
are
outstanding options to purchase 30,000 shares of our common stock
issued
to Mr. Bedard.
|
(5)
|
Ms.
Breslow resigned effective July 21, 2007. As of December 31, 2007,
there are outstanding 3,200 shares of restricted stock and options
to
purchase 4,897 shares of common stock issued to
Ms. Breslow.
|
(6)
|
Mr. Moch
resigned effective February 5, 2007. As of December 31, 2007,
there are outstanding options to purchase 55,342 shares of common
stock
issued to Mr. Moch.
|
(7)
|
Mr.
Moore resigned effective July 21, 2007. As of December 31, 2007,
there are outstanding 3,200 shares of restricted stock and options
to
purchase 3,700 shares of common stock issued to
Mr. Moore.
|
(8)
|
As
of December 31, 2007, there are outstanding 3,200 shares of
restricted stock and options to purchase 45,426 shares of common
stock
issued to Ms. Tanner.
|
(9)
|
As
of December 31, 2007, there are outstanding 3,200 shares of
restricted stock and options to purchase 28,842 shares of common
stock
issued to Mr. Yetter.
|
Director
Compensation Policy
All
of
our Board of Directors are reimbursed for their expenses for each Board meeting
attended. Directors who are not also compensated as our employees receive $1,500
per Board meeting attended in person and $750 for each Board meeting attended
by
telephone. Directors also receive an annual retainer in cash for their services
on the Board of $25,000.
Pursuant
to the Synvista 2005 Stock Plan, as amended on July 19, 2006, non-employee
directors also receive, upon the date of their election or re-election to the
Board and on the dates of the next two annual meetings of stockholders (subject
to their continued service on the Board of Directors), a stock option to
purchase 20,000 shares of our common stock (subject to adjustment if they
received stock options upon appointment to the Board between annual meetings
of
stockholders to fill a vacancy or newly created directorship) at an exercise
price equal to the fair market value of our common stock on the date of grant.
Each of these options will vest and become exercisable upon completion of one
full year of service and shall have a term of ten years regardless of whether
the director ceases to be a director.
Indemnification;
Directors’ and Officers’ Insurance
The
Delaware General Corporation Law authorizes corporations to limit or eliminate,
subject to certain conditions, the personal liability of directors to
corporations and their stockholders for monetary damages for breach of their
fiduciary duties. Our restated certificate of incorporation and restated bylaws
limit the liability of our directors to the fullest extent permitted by Delaware
law.
We
have
obtained director and officer liability insurance to cover liabilities our
directors and officers may incur in connection with their services to us,
including matters arising under the Securities Act of 1933, as amended (the
“Securities Act”). Our restated certificate of incorporation and restated bylaws
also provide that we will indemnify any of our directors and officers who,
by
reason of the fact that he or she is one of our officers or directors, is
involved in a legal proceeding of any nature. We will repay certain expenses
incurred by a director or officer in connection with any civil or criminal
action or proceeding, specifically including actions by us or in our name
(derivative suits). Such indemnifiable expenses include, to the maximum extent
permitted by law, attorneys’ fees, judgments, civil or criminal fines,
settlement amounts and other expenses customarily incurred in connection with
legal proceedings. A director or officer will not receive indemnification if
he
or she is found not to have acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, our best interest. We believe
that these provisions and agreements are necessary to attract and retain
qualified persons as directors and officers.
Such
limitation of liability and indemnification does not affect the availability
of
equitable remedies. In addition, we have been advised that in the opinion of
the
Securities and Exchange Commission, indemnification for liabilities arising
under the Securities Act is against public policy as expressed in the Securities
Act and is therefore unenforceable.
There
is
no pending litigation or proceeding involving any of our directors, officers,
employees or agents in which indemnification will be required or permitted.
We
are not aware of any threatened litigation or proceeding that may result in
a
claim for such indemnification.
Equity
Compensation Plan Information
The
following table provides certain aggregate information with respect to all
of
our equity compensation plans in effect as of December 31,
2007.
Plan Category
|
|
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
|
|
Weighted-Average
Exercise Price
of Outstanding
Options,
Warrants
and Rights
|
|
Number of
Securities
Remaining Available
For Future Issuance
Under Existing Equity
Compensation Plans
(excluding securities
reflected in
column(a))
|
|
Equity
compensation plans approved by security holders(1)
|
|
|
872,706
|
|
$
|
15.82
|
|
|
494,623
|
|
Equity
compensation plans not approved by security holders
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
|
872,706
|
|
$
|
15.82
|
|
|
494,623
|
|
(1)
|
These
plans consist of our Amended and Restated 1987 Stock Option Plan,
our
Amended 1995 Stock Option Plan and our 2005 Stock Plan, as
amended.
|
AUDIT
COMMITTEE REPORT
The
Audit
Committee’s powers and responsibilities and the qualifications required of each
of its members are set forth in the Audit Committee Charter, which is available
on our website at www.Synvista.com.
Responsibilities
The
primary function of the Audit Committee is to oversee Synvista’s accounting and
financial reporting processes, the audits of its financial statements and
internal controls over financial reporting. Management is solely responsible
for
the financial statements and the financial reporting process, including the
system of internal controls, and has represented to the Audit Committee and
the
Board of Directors that the financial statements discussed below were prepared
in accordance with accounting principles generally accepted in the United States
of America appropriate in the circumstances and necessarily include some amounts
based on management’s estimates and judgments. Synvista’s independent registered
public accounting firm is responsible for auditing those financial statements
and expressing an opinion on the conformity of these financial statements,
in
all material respects, with accounting principles generally accepted in the
United States of America.
Independence
As
required by Independence Standards Board Standard No. 1, as adopted by the
Public Company Accounting Oversight Board in Rule 3600T, Synvista’s independent
registered public accounting firm, J.H. Cohn LLP (“J.H. Cohn”) has disclosed to
the Audit Committee any relationships between it (and its related entities)
and
Synvista (and its related entities), which, in J.H. Cohn’s professional
judgment, may reasonably be thought to affect its ability to be independent.
In
addition, J.H. Cohn has discussed its independence with the Audit Committee
and
confirmed in a letter to the Audit Committee that, in its professional judgment,
it is independent of Synvista within the meaning of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended.
Recommendation
Acting
pursuant to its Charter, the Audit Committee has reviewed Synvista’s audited
annual consolidated financial statements for the year ended December 31,
2007 and the related report of J.H. Cohn, and has discussed the audited
financial statements and report with management and with the independent
registered public accounting firm. The Audit Committee has also discussed with
management and the independent registered public accounting firm the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended,
as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
These
matters include significant accounting policies, management judgments and
accounting estimates, management’s consultation with other accountants, and any
difficulties encountered in performing the audit, significant audit adjustments
or disagreements with management. Based on the review and discussions described
above, the Audit Committee recommended to Synvista’s Board of Directors that the
audited consolidated financial statements be included in Synvista’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2007 for filing
with the Securities and Exchange Commission.
|
|
Audit
Committee
|
|
|
|
John
F. Bedard
|
|
|
|
Mary
C. Tanner
|
|
|
|
Wayne
P. Yetter
|
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our officers
and directors, and persons who own more than 10% of a registered class of our
equity securities, to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the Securities and Exchange Commission. Officers,
directors and greater than 10% stockholders are required by Securities and
Exchange Commission regulation to furnish us with copies of all Forms 3, 4
and
5, and any amendments thereto, they file.
Based
solely on our review of the copies of such forms we have received and written
representations from certain reporting persons that they were not required
to
file Forms 5 for specified fiscal years, we believe that all of our officers,
directors, and greater than 10% beneficial owners complied with all filing
requirements applicable to them with respect to transactions in our equity
securities during fiscal year 2007.
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Our
Audit
Committee reviews and approves, in advance, all related party
transactions.
Since
January 2007, there has not been, nor is there currently proposed, any
transaction or series of similar transactions to which we were or are to be
a
party in which the amount involved exceeded or exceeds $120,000 and in which
any
director, executive officer, holder of more than 5% of our common stock or
any
member of the immediate family of any of the foregoing persons had or will
have
a direct or indirect material interest.
Director
Independence
Our
Board
has determined that the following members of the Board qualify as independent
under the definition promulgated by the American Stock Exchange: Mr. Bedard,
Ms. Tanner and Mr. Yetter.
PROPOSAL
1
ELECTION
OF DR. BERKOWITZ AS A CLASS B DIRECTOR
At
the
meeting, one Class B director is to be elected to hold office until the annual
meeting of stockholders to be held in 2011 and until his successor is elected
and qualified. The nominee for election to the Board of Directors is Noah
Berkowitz, M.D., Ph.D.
Pursuant
to our Restated Certificate of Incorporation, our Board of Directors is divided
into three classes, each of which serves a term of three years. Class
B consists of Dr. Berkowitz, whose term will expire at the annual meeting
of stockholders in 2008 and who is nominated for re-election at the annual
meeting. Class C consists of Ms. Tanner and Mr. Yetter, whose terms
will expire at the annual meeting of stockholders in 2009. Class A consists
of
Mr. John F. Bedard, whose term will expire at the annual meeting of
stockholders in 2010.
Proxies
solicited by the Board of Directors will be voted for the election of the
nominee named above, unless otherwise specified in the proxy. Dr. Berkowitz
is a
present director of Synvista. In the event a nominee should become unavailable
or unable to serve as a director, it is intended that votes will be cast for
a
substitute nominee designated by the Board of Directors. The Board of Directors
has no reason to believe that the nominee named will be unable to serve if
elected. The nominee has consented to being named in this proxy statement and
to
serve if elected.
Votes
Required to Elect a Class B Director
The
affirmative vote of the holders of a plurality of the shares represented in
person or by proxy at the annual meeting is required to elect Dr. Berkowitz.
Abstentions and broker non-votes will have no effect and will not be counted
towards the vote total for this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE TO ELECT DR. BERKOWITZ AS A CLASS B
DIRECTOR, AND
PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH ELECTION UNLESS
A
STOCKHOLDER
HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL
2
INCREASE
IN THE AGGREGATE NUMBER OF SHARES
AVAILABLE
UNDER THE SYNVISTA 2005 STOCK PLAN
Our
Board
of Directors is asking you to approve an amendment to the Synvista 2005 Stock
Plan (the “Plan”). The amendment provides for an increase in the number of
shares of our common stock available for issuance under the Plan from 1,060,000
shares, as presently constituted, to 2,000,000 shares. As of May 21, 2008,
approximately 478,623 shares remain available for the grant of options and
other
stock-based awards in the future if the proposed amendment to the Plan is not
approved.
The
fundamental objective of our compensation policy remains the attraction and
retention of highly qualified persons to serve as directors, officers, key
employees and consultants. This objective is balanced against, and is strongly
influenced by, our need to preserve our cash resources. Therefore, we have
traditionally considered options and other equity incentives to be an important
element of our overall compensation philosophy.
We
are
requesting that you approve the amendment to the Plan in order that the Company
may have sufficient shares available for the grant of stock-based awards in
the
future. We believe the increased number of shares we are asking you to approve
is necessary for the Company to be able to attract and retain executive officers
and key employees, directors and consultants while continuing the Company’s
policy of conserving its cash resources.
Accordingly,
the Board of Directors adopted the amendment to the Plan on April 29, 2008,
subject to stockholder approval. The affirmative vote of the holders of a
majority of the shares represented in person or by proxy at the annual meeting
is required to approve the amendment to the Plan. Below is a summary of the
principal provisions of the Plan and its operation. A copy of the Plan is
attached hereto as Annex A. The following description of the Plan is qualified
in its entirety by reference to Annex A.
Shares
Subject to Plan
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Upon
stockholder approval at the annual meeting, awards with respect to
a
maximum of up to 2,000,000 shares of common stock may be made under
the
Plan, as amended. Of that number of shares, the proposed amendment
would
add 940,000 shares to the 1,060,000 shares already approved, of which
only
approximately 478,623 remain available for the grant of new options
and
other stock-based awards.
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Plan
Administration
|
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The
Plan is administered by the Board of Directors of Synvista, or a
committee
thereof, as delegated by the Board of Directors. The administrator
will
have authority, subject to the terms of the Plan, to determine when
and to
whom to make grants under the Plan, the number of shares to be covered
by
the grants, the types and terms of options and other stock-based
award
granted, the exercise price of the shares of common stock covered
by
options granted and to prescribe, amend and rescind rules and regulations
relating to the Plan. New options granted to non-employee directors
are
governed by the formula discussed below.
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Eligibility
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Certain
of our directors, officers, employees, consultants and advisors may
be
granted options to purchase shares of our common stock under the
Plan. The
number of persons eligible to receive awards under the Plan is not
presently determinable.
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Transfer
of Awards
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Generally,
awards may not be transferred to another person, except by will or
the
laws of descent and distribution, or as approved by the
administrator.
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Termination
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Options
expire ten years from the option grant date, except that an incentive
stock option granted to an employee who is the holder of 10% or more
of
our outstanding shares expires five years from the option grant
date.
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Initial
Director Options
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Each
director who is not an employee of the Company is granted an option
to
purchase 20,000 shares on the date of each annual meeting of stockholders,
whether or not such director is up for election or reelection, so
long as
on such date, the director is serving as a director of Synvista.
The per
share exercise price of an option will be equal to the fair market
value
of a share of common stock on the grant date. Each option will vest,
and
be exercisable, upon completion of one full year of service on the
Board
of Directors, so long as on such date, the director is serving as
a
director of Synvista.
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General
Options
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Under
the Plan, incentive stock options (“ISOs”) within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (“Code”),
nonqualified stock options (“NQSOs”) and other stock-based award may be
granted by the administrator to directors, employees and consultants
of
the Company and any of its Affiliates (as defined in the Plan), except
that ISOs may be granted only to employees of the Company and any
of its
subsidiaries. The per share purchase price (or “option price”) under each
option is established by the committee at the time the option is
granted.
However, the per share option price of an ISO granted to a participant
must be at least 100% of the fair market value of a share on the
date the
ISO is granted (110% in the case of an ISO granted to a holder of
10% or
more of our outstanding shares). Options will be exercisable at such
times
and in such installments as determined by the
administrator.
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Exercisability
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Options
generally may not be exercised more than three months after the option
holder ceases to provide services to the Company or an affiliate,
except
that in the event of the death or disability of the option holder,
the
option may be exercised by the holder (or the holder’s estate), for a
period of up to one year after the date of death or disability. The
agreements evidencing the grant of an option (other than an option
to a
non-employee director) may, in the discretion of the committee, set
forth
additional or different terms and conditions applicable to such option
upon a termination or change in status of the employment or service
of the
optionee. Options terminate immediately if the option holder’s service was
terminated for cause.
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Payment
of Exercise Price
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The
shares purchased upon the exercise of an option must be paid for
in cash
(including cash that may be received from the Company at the time
of
exercise as additional compensation) or through the delivery of other
shares of common stock with a value equal to the total option price
or in
a combination of cash and such shares, subject to the power of the
administrator to vary the payment arrangement, including delivery
of a
personal recourse note, to meet the tax needs of an individual non-U.S.
recipient if such variance does not change the substance of the
arrangement set forth herein insofar as it affects the Company. In
addition, the option holder may have the option price paid by a broker
or
dealer and the shares issued upon exercise of the option delivered
directly to the broker or dealer.
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Amendment
or Termination
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Our
Board of Directors has the power to terminate or amend the Plan at
any
time. If the Board of Directors does not take action to earlier terminate
the Plan, it will terminate on April 19, 2015. Certain amendments may
require stockholder approval, and no amendment may adversely affect
options that have previously been
granted.
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As
of May
21, 2008, an aggregate of 781,377 shares had been issued upon the exercise
of
options or are issuable upon the exercise of options outstanding under the
Plan.
On May 21, 2008, the closing market price per share of our common stock was
$1.97, as reported on the AMEX.
Federal
Income Tax Considerations
The
following is a brief summary of the applicable federal income tax laws relating
to stock options and stock grants under the Plan:
Incentive
Stock Options:
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Incentive
stock options are intended to qualify for treatment under Section
422 of
the Code. An incentive stock option does not result in taxable income
to
the optionee or deduction to Synvista at the time it is granted or
exercised, provided that no disposition is made by the optionee of
the
shares acquired pursuant to the option within two years after the
date of
grant of the option nor within one year after the date of issuance
of
shares to the optionee (referred to as the “ISO holding period”). However,
the difference between the fair market value of the shares on the
date of
exercise and the option price will be an item of tax preference includible
in “alternative minimum taxable income.” Upon disposition of the shares
after the expiration of the ISO holding period, the optionee will
generally recognize long-term capital gain or loss based on the difference
between the disposition proceeds and the option price paid for the
shares.
If the shares are disposed of prior to the expiration of the ISO
holding
period, the optionee generally will recognize taxable compensation,
and
Synvista will have a corresponding deduction, in the year of the
disposition, equal to the excess of the fair market value of the
shares on
the date of exercise of the option over the option price. Any additional
gain realized on the disposition will normally constitute capital
gain. If
the amount realized upon such a disqualifying disposition is less
than
fair market value of the shares on the date of exercise, the amount
of
compensation income will be limited to the excess of the amount realized
over the optionee’s adjusted basis in the
shares.
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Non-Qualified
Options:
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Options
otherwise qualifying as incentive stock options, to the extent the
aggregate fair market value of shares with respect to which such
options
are first exercisable by an individual in any calendar year exceeds
$100,000, and options designated as non-qualified options will be
treated
as options that are not incentive stock options.
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A
non-qualified option ordinarily will not result in income to the
optionee
or deduction to Synvista at the time of grant. The optionee will
recognize
compensation income at the time of exercise of such non-qualified
option
in an amount equal to the excess of the then value of the shares
over the
option price per share. Such compensation income of the optionee
may be
subject to withholding taxes, and a deduction may then be allowable
to
Synvista in an amount equal to the optionee’s compensation
income.
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An
optionee’s initial basis in shares so acquired will be the amount paid on
exercise of the non-qualified option plus the amount of any corresponding
compensation income. Any gain or loss as a result of a subsequent
disposition of the shares so acquired will be capital gain or
loss.
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With
respect to stock grants under the Plan that result in the issuance
of
shares that are either not restricted as to transferability or not
subject
to a substantial risk of forfeiture, the grantee must generally recognize
ordinary income equal to the fair market value of shares received.
Thus,
deferral of the time of issuance will generally result in the deferral
of
the time the grantee will be liable for income taxes with respect
to such
issuance. Synvista generally will be entitled to a deduction in an
amount
equal to the ordinary income recognized by the grantee.
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Stock
Grants:
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With
respect to stock grants involving the issuance of shares that are
restricted as to transferability and subject to a substantial risk
of
forfeiture, the grantee must generally recognize ordinary income
equal to
the fair market value of the shares received at the first time the
shares
become transferable or are not subject to a substantial risk of
forfeiture, whichever occurs earlier. A grantee may elect to be taxed
at
the time of receipt of shares rather than upon lapse of restrictions
on
transferability or substantial risk of forfeiture, but if the grantee
subsequently forfeits such shares, the grantee would not be entitled
to
any tax deduction, including as a capital loss, for the value of
the
shares on which he previously paid tax. The grantee must file such
election with the Internal Revenue Service within 30 days of the
receipt
of the shares. Synvista generally will be entitled to a deduction
in an
amount equal to the ordinary income recognized by the
grantee.
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New
Plan Benefits
The
currently proposed amendment to the Plan provides for an increase in the number
of shares available for issuance under the Plan from 1,060,000 shares, as
presently constituted, to 2,000,000 shares.
The
amounts of future grants under the Plan are not determinable as awards under
the
Plan and will be granted at the sole discretion of the Compensation Committee
and we cannot determine at this time either the persons who will receive awards
under the Plan or the amount or types of any such awards. However, it is
anticipated that a significant portion of the future grants will be allocated
to
our executive officers to incentivize them to continue to provide services
to
the Company.
Votes
Required to Approve Amendment to the Synvista 2005 Stock
Plan
The
affirmative vote of the holders of a majority of the shares represented in
person or by proxy at the annual meeting is required to approve the amendment
to
the Plan. Abstentions will be counted towards the vote total for this proposal,
and will have the same effect as votes against the proposal. Broker non-votes
will have no effect and will not be counted towards the vote total for this
proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE AMENDMENT TO THE SYNVISTA
2005 STOCK
PLAN, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE AMENDMENT
UNLESS
A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL
3
AMENDMENT
OF OUR RESTATED CERTIFICATE OF INCORPORATION TO DECREASE FROM 300,000,000
SHARES
TO 150,000,000 SHARES THE AGGREGATE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED
TO
BE ISSUED
The
Board
of Directors has determined that it is advisable to decrease our authorized
common stock from 300,000,000 shares to 150,000,000 shares, and has voted to
recommend that the stockholders adopt an amendment to our Restated Certificate
of Incorporation effecting the proposed decrease. The full text of the proposed
amendment to our Restated Certificate of Incorporation is attached to this
proxy
statement as Annex B.
As
of May
21, 2008, 2,586,326 shares of our common stock were issued and outstanding
(excluding treasury shares) and 14,324,893 shares were reserved for issuance
upon the conversion of existing securities and exercise of options granted
under
our 2005 Stock Plan. The number of authorized and unreserved shares available
for future issuance is 283,088,781. A total of 478,623 shares of common stock
are available for future issuance under our 2005 Stock Plan.
We
are
asking stockholders to approve an amendment to our Restated Certificate of
Incorporation to decrease the number of authorized shares from 300,000,000
shares to 150,000,000 shares. Our Board of Directors believes that this decrease
is advisable because a reduction in the number of our authorized shares of
common stock will result in significantly lower franchise tax due to the State
of Delaware, which is the state in which we are incorporated. The State of
Delaware imposes a franchise tax on corporations that are incorporated under
the
laws of that state, and the franchise tax is calculated using the number of
a
corporation’s authorized shares of common stock as part of the calculation. The
amount of this tax will be decreased if we reduce the number of our authorized
shares of common stock. We believe that having 150,000,000 authorized shares
of
common stock will give us sufficient flexibility for corporate purposes for
the
foreseeable future.
Votes
Required to Approve the Decrease in the Authorized Number of Shares of Common
Stock
Approval
of the decrease in the authorized number of shares of common stock requires
the
affirmative vote of a majority of the issued and outstanding shares of Synvista
stock. Abstentions and broker non-votes will be counted towards the vote total
for this proposal, and will have the same effect as “against”
votes.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE DECREASE IN THE AUTHORIZED
NUMBER
OF SHARES OF COMMON STOCK, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED
IN
FAVOR
OF THE DECREASE IN THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK UNLESS A
STOCKHOLDER
HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL
4
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit
Committee of the Board has selected, subject to stockholder ratification, J.H.
Cohn LLP (“J.H. Cohn”) to serve as Synvista’s independent registered public
accounting firm for the fiscal year ending December 31, 2008. The Board
recommends that our stockholders ratify the selection of J.H. Cohn.
J.H.
Cohn
served as our independent registered public accounting firm for the fiscal
years
ended December 31, 2007 and December 31, 2006.
If
the
stockholders do not ratify the decision to appoint J.H. Cohn, the Audit
Committee may reconsider its selection. The affirmative vote of a majority
of
the shares voted at the annual meeting is required for
ratification.
Representatives
of J.H. Cohn are expected to be present at the annual meeting to respond to
appropriate questions from our stockholders. They will be given the opportunity
to make a statement if they wish to do so.
The
following table summarizes the fees paid or payable to J.H. Cohn for services
rendered for the fiscal year ended December 31, 2007:
Type
of Fees
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|
Fiscal Year
Ended
December 31,
2007
|
|
Audit
Fees
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|
$
|
124,433*
|
|
Audit-Related
Fees
|
|
|
22,659
|
|
Tax
Fees
|
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|
—
|
|
All
Other Fees
|
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|
—
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|
Total
Fees
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|
$
|
147,092
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The
following table summarizes the fees paid or payable to J.H. Cohn for services
rendered for the fiscal year ended December 31, 2006:
Type
of Fees
|
|
Fiscal Year
Ended
December 31,
2006
|
|
Audit
Fees
|
|
$
|
97,925
|
|
Audit-Related
Fees
|
|
|
46,142
|
|
Tax
Fees
|
|
|
—
|
|
All
Other Fees
|
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—
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Total
Fees
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$
|
144,067
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*Information
set forth above under the caption “Audit Fees” relates to fees we paid the
independent registered public accountants for professional services for the
audit of our financial statements included in our Form 10-K, review of our
financial statements included in our Forms 10-Q and for the issuance of comfort
letters and/or consents in connection with registration statements.
“Audit-Related Fees” are fees we paid for assurance and related services by the
independent registered public accountants that are reasonably related to the
performance of the audit or review of our financial statements, including
special procedures required to meet certain regulatory
requirements.
Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-audit Services
of
Independent Auditors
Consistent
with SEC policies regarding auditor independence, the Audit Committee has
responsibility for appointing, setting compensation and overseeing the work
of
the independent registered public accounting firm. In recognition of this
responsibility, the Audit Committee has established a policy to pre-approve
all
audit and permissible non-audit services provided by the independent
auditor.
Prior
to
engagement of the independent auditor for the next year’s audit, management will
submit an aggregate of services expected to be rendered during that year for
each of four categories of services to the Audit Committee for
approval.
1.
Audit
services
include audit work performed in connection with annual financial statements,
as
well as work that generally only the independent auditor can reasonably be
expected to provide, including comfort letters, statutory audits, and attest
services and consultation regarding financial accounting and/or reporting
standards.
2.
Audit-Related
services
are for assurance and related services that are traditionally performed by
the
independent auditor, including due diligence related to mergers and
acquisitions, employee benefit plan audits, and special procedures required
to
meet certain regulatory requirements.
3.
Tax
services
include all services performed by the independent auditor’s tax personnel except
those services specifically related to the audit of the financial statements,
and includes fees in the areas of tax compliance, tax planning, and tax
advice.
4.
Other Fees
are
those associated with services not captured in the other categories. The Company
generally does not request such services from the independent registered public
accounting firm.
Prior
to
engagement, the Audit Committee pre-approves these services by category of
service. The fees are budgeted and the Audit Committee requires the independent
auditor and management to report actual fees versus the budget periodically
throughout the year by category of service. During the year, circumstances
may
arise when it may become necessary to engage the independent auditor for
additional services not contemplated in the original pre-approval. In those
instances, the Audit Committee requires specific pre-approval before engaging
the independent auditor.
The
Audit
Committee may delegate pre-approval authority to one or more of its members.
The
member to whom such authority is delegated must report, for informational
purposes only, any pre-approval decisions to the Audit Committee at its next
scheduled meeting.
Votes
Required to Ratify the Selection of J.H. Cohn LLP
The
affirmative vote of a majority of the shares voted at the annual meeting is
required for ratification of the selection of J.H. Cohn LLP as Synvista’s
independent registered public accounting firm for the fiscal year ending
December 31, 2008. Abstentions will be counted towards the vote total for
this proposal, and will have the same effect as “against” votes. Broker
non-votes will have no effect and will not be counted towards the vote total
for
this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE TO RATIFY THE SELECTION OF J.H. COHN LLP
AS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND PROXIES SOLICITED BY THE
BOARD WILL BE VOTED IN FAVOR OF SUCH RATIFICATION UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
FORWARD-LOOKING
STATEMENTS AND CAUTIONARY STATEMENTS
Statements
in this proxy statement that are not statements or descriptions of historical
facts are “forward-looking” statements and are subject to numerous risks and
uncertainties. These forward-looking statements and other forward-looking
statements made by us or our representatives are based on a number of
assumptions. The words “believe,” “expect,” “anticipate,” “intend,” “estimate”
or other expressions, which are predictions of or indicate future events and
trends and which do not relate to historical matters, identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, as they involve risks and uncertainties, and actual
results could differ materially from those currently anticipated due to a number
of factors, including those set forth in Synvista’s SEC filings.
The
forward-looking statements represent our judgments and expectations as of the
date of this proxy statement. We assume no obligation to update any such
forward-looking statements.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING
AND FINANCIAL DISCLOSURE
Not
applicable.
CODE
OF BUSINESS CONDUCT AND ETHICS
Synvista
has adopted a code of business conduct and ethics that applies to all of its
employees, including its chief executive officer and chief financial and
accounting officers. The text of the code of business conduct and ethics is
posted on Synvista’s website at www.Synvista.com.
Disclosure regarding any amendments to, or waivers from, provisions of the
code
of business conduct and ethics that apply to Synvista’s directors, principal
executive and financial officers will be included in a Current Report on Form
8-K within four business days following the date of the amendment or waiver,
unless website posting of such amendments or waivers is then permitted by the
rules of the American Stock Exchange, Inc.
STOCKHOLDER
PROPOSALS
Stockholders
deciding to submit proposals for inclusion in our proxy statement and proxy
relating to our 2009 annual meeting of stockholders must advise Synvista’s
Secretary of such proposals in writing by _____________, 2009. In addition,
the
proxy solicited by the Board of Directors for the 2009 annual meeting of
stockholders will confer discretionary authority to vote on any stockholder
proposal presented at that meeting of which notice was not timely received.
In
accordance with our bylaws, notice of a proposal will be considered untimely,
unless Synvista’s Secretary receives written notice of such proposal by
April 23, 2009 (but not earlier than March 24, 2009).
OTHER
MATTERS
The
Board
of Directors of Synvista is not aware of any matter to be presented for action
at the meeting other than the matters referred to above and does not intend
to
bring any other matters before the meeting. However, if other matters should
properly come before the meeting, it is intended that holders of the proxies
will vote thereon in their discretion.
GENERAL
The
accompanying proxies are solicited by and on behalf of the Boards of Directors
of Synvista, whose notice of meeting is attached to this proxy statement, and
the entire cost of such solicitation will be borne by Synvista.
In
addition to the use of the mails, proxies may be solicited by personal interview
and telephone by directors, officers and other employees of Synvista who will
not be specially compensated for these services. Synvista has retained the
services of American Stock Transfer & Trust Company to assist in the proxy
distribution at a fee estimated to be $20,000. Synvista will also request that
brokers, nominees, custodians and other fiduciaries forward soliciting materials
to the beneficial owners of shares held of record by such brokers, nominees,
custodians and other fiduciaries. Synvista will reimburse such persons for
their
reasonable expenses in connection therewith.
Certain
information contained in this proxy statement relating to the security holdings
of directors and officers of Synvista is based upon information received from
the individual directors and officers.
WHERE
YOU CAN FIND MORE INFORMATION
Synvista
files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or
other
information Synvista files at the SEC’s public reference rooms in Washington,
D.C. (Station Place, 100 F Street, N.E.), New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on
the
operation of the public reference rooms. Synvista’s SEC filings are also
available to the public from commercial document retrieval services and at
the
website maintained by the SEC at www.sec.gov,
as well
as on Synvista’s website at www.Synvista.com
and, in
paper form, to beneficial owners of Synvista common stock without charge upon
written request to Synvista’s Secretary at Synvista’s principal executive
offices, 221 West Grand Avenue, Suite 200, Montvale, New Jersey
07645.
ANNEX
INDEX
ANNEX
A
|
2005
STOCK PLAN
|
ANNEX
B
|
FORM
OF CERTIFICATE OF AMENDMENT TO SYNVISTA’S RESTATED CERTIFICATE OF
INCORPORATION
|
ANNEX
C
|
PROXY
CARD
|
ANNEX
A
SYNVISTA
THERAPEUTICS, INC.
2005
STOCK PLAN
(as
amended on April 29, 2008)
Unless
otherwise specified or unless the context otherwise requires, the following
terms, as used in this Synvista Therapeutics, Inc. 2005 Stock Plan, have the
following meanings:
Administrator
means
the Board of Directors, unless it has delegated power to act on its behalf
to
the Committee, in which case the Administrator means the Committee.
Affiliate
means a
corporation which, for purposes of Section 424 of the Code, is a parent or
subsidiary of the Company, direct or indirect.
Agreement
means an
agreement between the Company and a Participant delivered pursuant to the Plan,
in such form as the Administrator shall approve.
Board
of Directors
means
the Board of Directors of the Company.
Code
means
the United States Internal Revenue Code of 1986, as amended.
Committee
means
the committee of the Board of Directors to which the Board of Directors has
delegated power to act under or pursuant to the provisions of the
Plan.
Common
Stock
means
shares of the Company’s common stock, $.01 par value per share.
Company
means
Synvista Therapeutics, Inc., a Delaware corporation.
Disability
or
Disabled
means
permanent and total disability as defined in Section 22(e)(3) of the
Code.
Employee
means
any employee of the Company or of an Affiliate (including, without limitation,
an employee who is also serving as an officer or director of the Company or
of
an Affiliate), designated by the Administrator to be eligible to be granted
one
or more Stock Rights under the Plan.
Fair
Market Value
of a
Share of Common Stock means:
(1) If
the
Common Stock is listed on a national securities exchange or traded in the
over-the-counter market and sales prices are regularly reported for the Common
Stock, the closing or last price of the Common Stock on the composite tape
or
other comparable reporting system for the trading day on the applicable date
and
if such date is not a trading day, the last market trading day prior to such
date;
(2) If
the
Common Stock is not traded on a national securities exchange but is traded
on
the over-the-counter market, if sales prices are not regularly reported for
the
Common Stock for the trading day referred to in clause (1), and if bid and
asked
prices for the Common Stock are regularly reported, the mean between the bid
and
the asked price for the Common Stock at the close of trading in the
over-the-counter market for the trading day on which Common Stock was traded
on
the applicable date and if such date is not a trading day, the last market
trading day prior to such date; and
(3) If
the
Common Stock is neither listed on a national securities exchange nor traded
in
the over-the-counter market, such value as the Administrator, in good faith,
shall determine.
ISO
means an
option meant to qualify as an incentive stock option under Section 422 of the
Code.
Non-Compensated
Director
means a
director of the Company who is neither an Employee nor a consultant rendering
services to the Company or any Affiliate more than one day per
week.
Non-Qualified
Option
means an
option which is not intended to qualify as an ISO.
Option
means an
ISO or Non-Qualified Option granted under the Plan.
Participant
means an
Employee, director or consultant of the Company or an Affiliate to whom one
or
more Stock Rights are granted under the Plan. As used herein, “Participant”
shall include “Participant’s Survivors” where the context requires.
Plan
means
this Synvista Therapeutics, Inc. 2005 Stock Plan.
Shares
means
shares of the Common Stock as to which Stock Rights have been or may be granted
under the Plan or any shares of capital stock into which the Shares are changed
or for which they are exchanged within the provisions of Paragraph 3 of the
Plan. The Shares issued under the Plan may be authorized and unissued shares
or
shares held by the Company in its treasury, or both.
Stock-Based
Award
means a
grant by the Company under the Plan of an equity award or equity based award
which is not an Option or Stock Grant.
Stock
Grant
means a
grant by the Company of Shares under the Plan.
Stock
Right
means a
right to Shares or the value of Shares of the Company granted pursuant to the
Plan — an ISO, a Non-Qualified Option, a Stock Grant or Stock-Based
Award.
Survivor
means a
deceased Participant’s legal representatives and/or any person or persons who
acquired the Participant’s rights to a Stock Right by will or by the laws of
descent and distribution.
The
Plan
is intended to encourage ownership of Shares by Employees and directors of
and
certain consultants to the Company in order to attract such people, to induce
them to work for the benefit of the Company or of an Affiliate and to provide
additional incentive for them to promote the success of the Company or of an
Affiliate. The Plan provides for the granting of ISOs, Non-Qualified Options,
Stock Grants and Stock-Based Awards.
3.
|
SHARES
SUBJECT TO THE PLAN.
|
The
number of Shares which may be issued from time to time pursuant to this Plan
shall be 2,000,000, or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction
in
accordance with Paragraph 24 of the Plan.
If
an
Option ceases to be outstanding, in whole or in part (other than by exercise),
or if the Company shall reacquire (at no more than its original issuance price)
any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any
Stock Right expires or is forfeited, cancelled, or otherwise terminated or
results in any Shares not being issued, the unissued Shares which were subject
to such Stock Right shall again be available for issuance from time to time
pursuant to this Plan.
4.
|
ADMINISTRATION
OF THE PLAN.
|
The
Administrator of the Plan will be the Board of Directors, except to the extent
the Board of Directors delegates its authority to the Committee, in which case
the Committee shall be the Administrator. Subject to the provisions of the
Plan,
the Administrator is authorized to:
|
a.
|
Interpret
the provisions of the Plan and all Stock Rights and to make all rules
and
determinations which it deems necessary or advisable for the
administration of the Plan;
|
|
b.
|
Determine
which Employees, directors and consultants shall be granted Stock
Rights;
|
|
c.
|
Determine
the number of Shares for which a Stock Right or Stock Rights shall
be
granted; provided, however, that in no event shall (i) Stock Rights
with
respect to more than 1,000,000 Shares be granted to any Participant
in any
fiscal year and (ii) more than 1,000,000 Shares be issued as Stock
Grants;
|
|
d.
|
Specify
the terms and conditions upon which a Stock Right or Stock Rights
may be
granted; and
|
|
e.
|
Adopt
any sub-plans applicable to residents of any specified jurisdiction
as it
deems necessary or appropriate in order to comply with or take advantage
of any tax or other laws applicable to the Company or to Plan Participants
or to otherwise facilitate the administration of the Plan, which
sub-plans
may include additional restrictions or conditions applicable to Stock
Rights or Shares issuable pursuant to a Stock
Right;
|
provided,
however, that all such interpretations, rules, determinations, terms and
conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated
as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if
the
Administrator is the Committee. In addition, if the Administrator is the
Committee, the Board of Directors may take any action under the Plan that would
otherwise be the responsibility of the Committee.
To
the
extent permitted under applicable law, the Board of Directors or the Committee
may allocate all or any portion of its responsibilities and powers to any one
or
more of its members and may delegate all or any portion of its responsibilities
and powers to any other person selected by it. The Board of Directors or the
Committee may revoke any such allocation or delegation at any time.
5.
|
ELIGIBILITY
FOR PARTICIPATION.
|
The
Administrator will, in its sole discretion, name the Participants in the Plan,
provided, however, that each Participant must be an Employee, director or
consultant of the Company or of an Affiliate at the time a Stock Right is
granted. Notwithstanding the foregoing, the Administrator may authorize the
grant of a Stock Right to a person not then an Employee, director or consultant
of the Company or of an Affiliate; provided, however, that the actual grant
of
such Stock Right shall be conditioned upon such person becoming eligible to
become a Participant at or prior to the time of the execution of the Agreement
evidencing such Stock Right. ISOs may be granted only to Employees.
Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to
any
Employee, director or consultant of the Company or an Affiliate. The granting
of
any Stock Right to any individual shall neither entitle that individual to,
nor
disqualify him or her from, participation in any other grant of Stock
Rights.
6.
|
TERMS
AND CONDITIONS OF OPTIONS.
|
Each
Option shall be set forth in writing in an Option Agreement, duly executed
by
the Company and, to the extent required by law or requested by the Company,
by
the Participant. The Administrator may provide that Options be granted subject
to such terms and conditions, consistent with the terms and conditions
specifically required under this Plan, as the Administrator may deem appropriate
including, without limitation, subsequent approval by the shareholders of the
Company of this Plan or any amendments thereto. The Option Agreements shall
be
subject to at least the following terms and conditions:
|
A.
|
Non-Qualified
Options:
Each Option intended to be a Non-Qualified Option shall be subject
to the
terms and conditions which the Administrator determines to be appropriate
and in the best interest of the Company, subject to the following
minimum
standards for any such Non-Qualified
Option:
|
|
a.
|
Option
Price:
Each Option Agreement shall state the option price (per share) of
the
Shares covered by each Option, which option price shall be determined
by
the Administrator but shall not be less than the Fair Market Value
per
share of Common Stock.
|
|
b.
|
Number
of Shares:
Each Option Agreement shall state the number of Shares to which it
pertains.
|
|
c.
|
Option
Periods:
Each Option Agreement shall state the date or dates on which it first
is
exercisable and the date after which it may no longer be exercised,
and
may provide that the Option rights accrue or become exercisable in
installments over a period of months or years, or upon the occurrence
of
certain conditions or the attainment of stated goals or
events.
|
|
d.
|
Option
Conditions:
Exercise of any Option may be conditioned upon the Participant’s execution
of a Share purchase agreement in form satisfactory to the Administrator
providing for certain protections for the Company and its other
shareholders, including requirements
that:
|
|
i.
|
The
Participant’s or the Participant’s Survivors’ right to sell or transfer
the Shares may be restricted; and
|
|
ii.
|
The
Participant or the Participant’s Survivors may be required to execute
letters of investment intent and must also acknowledge that the Shares
will bear legends noting any applicable
restrictions.
|
|
e.
|
Directors’
Options:
On the date of each annual meeting of shareholders of the Company,
whether
or not such director is up for election or reelection, provided that
on
such dates such director is serving as a director of the Company,
such
Non-Compensated Director shall be granted a Non-Qualified Option
to
purchase 20,000 Shares. If a Non-Compensated Director is first elected
or
appointed to the Board other than at an annual meeting of shareholders,
on
the date of his or her initial election or appointment he or she
shall be
granted a Non-Qualified Option to purchase the number of Shares determined
by multiplying 1,667 by the number of whole or partial months from
the
date of his or her election or appointment to the Company’s next annual
meeting of shareholders. For purposes of the preceding sentence,
a month
shall mean a period of 30 consecutive
days.
|
Each
such
Option shall (i) have an exercise price equal to the Fair Market Value (per
share) of the Shares on the date of grant of the Option, (ii) have a term of
ten
years, (iii) shall vest and become exercisable upon completion of one full
year
of service on the Board after the date of grant provided that on such date
the
Non-Compensated Director is serving as a director of the Company, and (iv)
shall
remain exercisable regardless of whether or not the Non-Compensated Director
holding the Option later ceases to be a director of the Company.
|
B.
|
ISOs:
Each Option intended to be an ISO shall be issued only to an Employee
and
be subject to the following terms and conditions, with such additional
restrictions or changes as the Administrator determines are appropriate
but not in conflict with Section 422 of the Code and relevant regulations
and rulings of the Internal Revenue
Service:
|
|
a.
|
Minimum
standards:
The ISO shall meet the minimum standards required of Non-Qualified
Options, as described in Paragraph 6(A) above, except clauses (a)
and (e)
thereunder.
|
|
b.
|
Option
Price:
Immediately before the ISO is granted, if the Participant owns, directly
or by reason of the applicable attribution rules in Section 424(d)
of the
Code:
|
|
i.
|
10%
or less of the total combined voting power of all classes of stock
of the
Company or an Affiliate, the Option price per share of the Shares
covered
by each ISO shall not be less than 100% of the Fair Market Value
per share
of the Shares on the date of the grant of the Option;
or
|
|
ii.
|
More
than 10% of the total combined voting power of all classes of stock
of the
Company or an Affiliate, the Option price per share of the Shares
covered
by each ISO shall not be less than 110% of the Fair Market Value
on the
date of grant.
|
|
c.
|
Term
of Option:
For Participants who own:
|
|
i.
|
10%
or less of the total combined voting power of all classes of stock
of the
Company or an Affiliate, each ISO shall terminate not more than ten
years
from the date of the grant or at such earlier time as the Option
Agreement
may provide; or
|
|
ii.
|
More
than 10% of the total combined voting power of all classes of stock
of the
Company or an Affiliate, each ISO shall terminate not more than five
years
from the date of the grant or at such earlier time as the Option
Agreement
may provide.
|
|
d.
|
Limitation
on Yearly Exercise:
The Option Agreements shall restrict the amount of ISOs which may
become
exercisable in any calendar year (under this or any other ISO plan
of the
Company or an Affiliate) so that the aggregate Fair Market Value
(determined at the time each ISO is granted) of the stock with respect
to
which ISOs are exercisable for the first time by the Participant
in any
calendar year does not exceed
$100,000.
|
7.
|
TERMS
AND CONDITIONS OF STOCK GRANTS.
|
Each
offer of a Stock Grant to a Participant shall state the date prior to which
the
Stock Grant must be accepted by the Participant, and the principal terms of
each
Stock Grant shall be set forth in an Agreement, duly executed by the Company
and, to the extent required by law or requested by the Company, by the
Participant. The Agreement shall be in a form approved by the Administrator
and
shall contain terms and conditions which the Administrator determines to be
appropriate and in the best interest of the Company, subject to the following
minimum standards:
|
a.
|
Each
Agreement shall state the purchase price (per share), if any, of
the
Shares covered by each Stock Grant, which purchase price shall be
determined by the Administrator but shall not be less than the minimum
consideration required by the Delaware General Corporation Law on
the date
of the grant of the Stock Grant;
|
|
b.
|
Each
Agreement shall state the number of Shares to which the Stock Grant
pertains; and
|
|
c.
|
Each
Agreement shall include the terms of any right of the Company to
restrict
or reacquire the Shares subject to the Stock Grant, including the
time and
events upon which such rights shall accrue and the purchase price
therefore, if any.
|
8.
|
TERMS
AND CONDITIONS OF OTHER STOCK-BASED AWARDS.
|
The
Board
shall have the right to grant other Stock-Based Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including,
without limitation, the grant of Shares based upon certain conditions, the
grant
of securities convertible into Shares and the grant of stock appreciation
rights, phantom stock awards or stock units. The principal terms of each
Stock-Based Award shall be set forth in an Agreement, duly executed by the
Company and, to the extent required by law or requested by the Company, by
the
Participant. The Agreement shall be in a form approved by the Administrator
and
shall contain terms and conditions which the Administrator determines to be
appropriate and in the best interest of the Company.
9.
|
EXERCISE
OF OPTIONS AND ISSUE OF SHARES.
|
An
Option
(or any part or installment thereof) shall be exercised by giving written notice
to the Company or its designee, together with provision for payment of the
full
purchase price in accordance with this Paragraph for the Shares as to which
the
Option is being exercised, and upon compliance with any other condition(s)
set
forth in the Option Agreement. Such notice shall be signed by the person
exercising the Option, shall state the number of Shares with respect to which
the Option is being exercised and shall contain any representation required
by
the Plan or the Option Agreement. Payment of the purchase price for the Shares
as to which such Option is being exercised shall be made (a) in United States
dollars in cash or by check, or (b) at the discretion of the Administrator,
through delivery of shares of Common Stock having a Fair Market Value equal
as
of the date of the exercise to the cash exercise price of the Option, or (c)
at
the discretion of the Administrator, by having the Company retain from the
shares otherwise issuable upon exercise of the Option, a number of shares having
a Fair Market Value equal as of the date of exercise to the exercise price
of
the Option, or (d) at the discretion of the Administrator, by delivery of the
grantee’s personal recourse note, bearing interest payable not less than
annually at no less than 100% of the applicable Federal rate, as defined in
Section 1274(d) of the Code, with or without the pledge of such Shares as
collateral, or (e) at the discretion of the Administrator, in accordance with
a
cashless exercise program established with a securities brokerage firm, and
approved by the Administrator, or (f) at the discretion of the Administrator,
by
any combination of (a), (b), (c), (d) and (e) above, or (g) at the discretion
of
the Administrator, payment of such other lawful consideration as the Board
may
determine. Notwithstanding the foregoing, the Administrator shall accept only
such payment on exercise of an ISO as is permitted by Section 422 of the
Code.
The
Administrator may specify a reasonable minimum number of shares that may be
purchased on any exercise of an Option, provided that such minimum number will
not prevent the Participant from exercising that full number of Shares as to
which the Option is then exercisable.
The
Company shall then reasonably promptly deliver the Shares as to which such
Option was exercised to the Participant (or to the Participant’s Survivors, as
the case may be). In determining what constitutes “reasonably promptly,” it is
expressly understood that the issuance and delivery of the Shares may be delayed
by the Company in order to comply with any law or regulation (including, without
limitation, state securities or “blue sky” laws) which requires the Company to
take any action with respect to the Shares prior to their issuance. The Shares
shall, upon delivery, be fully paid, non-assessable Shares.
The
Administrator shall have the right to accelerate the date of exercise of any
installment of any Option; provided that the Administrator shall not accelerate
the exercise date of any installment of any Option granted to an Employee as
an
ISO (and not previously converted into a Non-Qualified Option pursuant to
Paragraph 27) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in Paragraph
6.B.d.
The
Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such amendment shall be made only with the consent of
the
Participant to whom the Option was granted, or in the event of the death of
the
Participant, the Participant’s Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made only after
the Administrator determines whether such amendment would constitute a
“modification” of any Option which is an ISO (as that term is defined in Section
424(h) of the Code) or would cause any adverse tax consequences for the holder
of such ISO.
10.
|
ACCEPTANCE
OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.
|
A
Stock
Grant or Stock-Based Award (or any part or installment thereof) shall be
accepted by executing the applicable Agreement and delivering it to the Company
or its designee, together with provision for payment of the full purchase price,
if any, in accordance with this Paragraph for the Shares as to which such Stock
Grant or Stock-Based Award is being accepted, and upon compliance with any
other
conditions set forth in the applicable Agreement. Payment of the purchase price
for the Shares as to which such Stock Grant or Stock-Based Award is being
accepted shall be made (a) in United States dollars in cash or by check, or
(b)
at the discretion of the Administrator, through delivery of shares of Common
Stock having a Fair Market Value equal as of the date of acceptance of the
Stock
Grant or Stock-Based Award to the purchase price of the Stock Grant or
Stock-Based Award, or (c) at the discretion of the Administrator, by delivery
of
the grantee’s personal recourse note bearing interest payable not less than
annually at no less than 100% of the applicable Federal rate, as defined in
Section 1274(d) of the Code, or (d) at the discretion of the Administrator,
by
any combination of (a), (b) and (c) above.
The
Company shall then, if required pursuant to the applicable Agreement, reasonably
promptly deliver the Shares as to which such Stock Grant or Stock-Based Award
was accepted to the Participant (or to the Participant’s Survivors, as the case
may be), subject to any escrow provision set forth in the applicable Agreement.
In determining what constitutes “reasonably promptly,” it is expressly
understood that the issuance and delivery of the Shares may be delayed by the
Company in order to comply with any law or regulation (including, without
limitation, state securities or “blue sky” laws) which requires the Company to
take any action with respect to the Shares prior to their issuance.
The
Administrator may, in its discretion, amend any term or condition of an
outstanding Stock Grant, Stock-Based Award or applicable Agreement provided
(i)
such term or condition as amended is permitted by the Plan, and (ii) any such
amendment shall be made only with the consent of the Participant to whom the
Stock Grant or Stock-Based Award was made, if the amendment is adverse to the
Participant.
11.
|
RIGHTS
AS A SHAREHOLDER.
|
No
Participant to whom a Stock Right has been granted shall have rights as a
shareholder with respect to any Shares covered by such Stock Right, except
after
due exercise of the Option or acceptance of the Stock Grant or as set forth
in
any Agreement and tender of the full purchase price, if any, for the Shares
being purchased pursuant to such exercise or acceptance and registration of
the
Shares in the Company’s share register in the name of the
Participant.
12.
|
ASSIGNABILITY
AND TRANSFERABILITY OF STOCK RIGHTS.
|
By
its
terms, a Stock Right granted to a Participant shall not be transferable by
the
Participant other than (i) by will or by the laws of descent and distribution,
or (ii) as approved by the Administrator in its discretion and set forth in
the
applicable Agreement. Notwithstanding the foregoing, an ISO transferred except
in compliance with clause (i) above shall no longer qualify as an ISO. The
designation of a beneficiary of a Stock Right by a Participant, with the prior
approval of the Administrator and in such form as the Administrator shall
prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except
as provided above, a Stock Right shall only be exercisable or may only be
accepted, during the Participant’s lifetime, by such Participant (or by his or
her legal representative) and shall not be assigned, pledged or hypothecated
in
any way (whether by operation of law or otherwise) and shall not be subject
to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Stock Right or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of
any
attachment or similar process upon a Stock Right, shall be null and
void.
13.
|
EFFECT
ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH OR
DISABILITY.
|
Except
as
otherwise provided in a Participant’s Option Agreement, in the event of a
termination of service (whether as an employee, director or consultant) with
the
Company or an Affiliate before the Participant has exercised an Option, the
following rules apply:
|
a.
|
A
Participant who ceases to be an employee, director or consultant
of the
Company or of an Affiliate (for any reason other than termination
“for
cause”, Disability, or death for which events there are special rules in
Paragraphs 14, 15, and 16, respectively), may exercise any Option
granted
to him or her to the extent that the Option is exercisable on the
date of
such termination of service, but only within such term as the
Administrator has designated in a Participant’s Option
Agreement;
|
|
b.
|
Except
as provided in Subparagraph (c) below, or Paragraph 15 or 16, in
no event
may an Option intended to be an ISO, be exercised later than three
months
after the Participant’s termination of
employment;
|
|
c.
|
The
provisions of this Paragraph, and not the provisions of Paragraph
15 or
16, shall apply to a Participant who subsequently becomes Disabled
or dies
after the termination of employment, director status or consultancy;
provided, however, in the case of a Participant’s Disability or death
within three months after the termination of employment, director
status
or consultancy, the Participant or the Participant’s Survivors may
exercise the Option within one year after the date of the Participant’s
termination of service, but in no event after the date of expiration
of
the term of the Option;
|
|
d.
|
Notwithstanding
anything herein to the contrary, if subsequent to a Participant’s
termination of employment, termination of director status or termination
of consultancy, but prior to the exercise of an Option, the Board
of
Directors determines that, either prior or subsequent to the Participant’s
termination, the Participant engaged in conduct which would constitute
“cause”, then such Participant shall forthwith cease to have any right to
exercise any Option;
|
|
e.
|
A
Participant to whom an Option has been granted under the Plan who
is
absent from the Company or an Affiliate because of temporary disability
(any disability other than a Disability as defined in Paragraph 1
hereof),
or who is on leave of absence for any purpose, shall not, during
the
period of any such absence, be deemed, by virtue of such absence
alone, to
have terminated such Participant’s employment, director status or
consultancy with the Company or with an Affiliate, except as the
Administrator may otherwise expressly provide;
and
|
|
f.
|
Except
as required by law or as set forth in a Participant’s Option Agreement,
Options granted under the Plan shall not be affected by any change
of a
Participant’s status within or among the Company and any Affiliates, so
long as the Participant continues to be an employee, director or
consultant of the Company or any
Affiliate.
|
14.
|
EFFECT
ON OPTIONS OF TERMINATION OF SERVICE “FOR CAUSE”.
|
Except
as
otherwise provided in a Participant’s Option Agreement, the following rules
apply if the Participant’s service (whether as an employee, director or
consultant) with the Company or an Affiliate is terminated “for cause” prior to
the time that all his or her outstanding Options have been
exercised:
|
a.
|
All
outstanding and unexercised Options as of the time the Participant
is
notified his or her service is terminated “for cause” will immediately be
forfeited;
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|
b.
|
For
purposes of this Plan, “cause” shall include (and is not limited to)
dishonesty with respect to the Company or any Affiliate, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized disclosure
of confidential information, breach by the Participant of any provision
of
any employment, consulting, advisory, nondisclosure, non-competition
or
similar agreement between the Participant and the Company, and conduct
substantially prejudicial to the business of the Company or any Affiliate.
The determination of the Administrator as to the existence of “cause” will
be conclusive on the Participant and the
Company;
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c.
|
“Cause”
is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s
finding of “cause” occur prior to termination. If the Administrator
determines, subsequent to a Participant’s termination of service but prior
to the exercise of an Option, that either prior or subsequent to
the
Participant’s termination the Participant engaged in conduct which would
constitute “cause”, then the right to exercise any Option is forfeited;
and
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|
d.
|
Any
provision in an agreement between the Participant and the Company
or an
Affiliate, which contains a conflicting definition of “cause” for
termination and which is in effect at the time of such termination,
shall
supersede the definition in this Plan with respect to that
Participant.
|
15.
|
EFFECT
ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.
|
Except
as
otherwise provided in a Participant’s Option Agreement, a Participant who ceases
to be an employee, director or consultant of the Company or of an Affiliate
by
reason of Disability may exercise any Option granted to such
Participant:
|
a.
|
To
the extent that the Option has become exercisable but has not been
exercised on the date of Disability;
and
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|
b.
|
In
the event rights to exercise the Option accrue periodically, to the
extent
of a pro rata portion through the date of Disability of any additional
vesting rights that would have accrued on the next vesting date had
the
Participant not become Disabled. The proration shall be based upon
the
number of days accrued in the current vesting period prior to the
date of
Disability.
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A
Disabled Participant may exercise such rights only within the period ending
one
year after the date of the Participant’s termination of employment, directorship
or consultancy, as the case may be, notwithstanding that the Participant might
have been able to exercise the Option as to some or all of the Shares on a
later
date if the Participant had not become Disabled and had continued to be an
employee, director or consultant or, if earlier, within the originally
prescribed term of the Option.
The
Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid
for
by the Company.
16.
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EFFECT
ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR
CONSULTANT.
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Except
as
otherwise provided in a Participant’s Option Agreement, in the event of the
death of a Participant while the Participant is an employee, director or
consultant of the Company or of an Affiliate, such Option may be exercised
by
the Participant’s Survivors:
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a.
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To
the extent that the Option has become exercisable but has not been
exercised on the date of death; and
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b.
|
In
the event rights to exercise the Option accrue periodically, to the
extent
of a pro rata portion through the date of death of any additional
vesting
rights that would have accrued on the next vesting date had the
Participant not died. The proration shall be based upon the number
of days
accrued in the current vesting period prior to the Participant’s date of
death.
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If
the
Participant’s Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one year after the date of death
of such Participant, notwithstanding that the decedent might have been able
to
exercise the Option as to some or all of the Shares on a later date if he or
she
had not died and had continued to be an employee, director or consultant or,
if
earlier, within the originally prescribed term of the Option.
17.
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EFFECT
OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS.
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In
the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate for any reason before the
Participant has accepted a Stock Grant, such offer shall terminate.
For
purposes of this Paragraph 17 and Paragraph 18 below, a Participant to whom
a
Stock Grant has been offered and accepted under the Plan who is absent from
work
with the Company or with an Affiliate because of temporary disability (any
disability other than a permanent and total Disability as defined in Paragraph
1
hereof), or who is on leave of absence for any purpose, shall not, during the
period of any such absence, be deemed, by virtue of such absence alone, to
have
terminated such Participant’s employment, director status or consultancy with
the Company or with an Affiliate, except as the Administrator may otherwise
expressly provide.
In
addition, for purposes of this Paragraph 17 and Paragraph 18 below, any change
of employment or other service within or among the Company and any Affiliates
shall not be treated as a termination of employment, director status or
consultancy so long as the Participant continues to be an employee, director
or
consultant of the Company or any Affiliate.
18.
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EFFECT
ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH
OR DISABILITY.
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Except
as
otherwise provided in a Participant’s Agreement, in the event of a termination
of service (whether as an employee, director or consultant), other than
termination “for cause,” Disability, or death for which events there are special
rules in Paragraphs 19, 20, and 21, respectively, before all Company rights
of
repurchase shall have lapsed, then the Company shall have the right to
repurchase that number of Shares subject to a Stock Grant as to which the
Company’s repurchase rights have not lapsed.
19.
|
EFFECT
ON STOCK GRANTS OF TERMINATION OF SERVICE “FOR CAUSE”.
|
Except
as
otherwise provided in a Participant’s Agreement, the following rules apply if
the Participant’s service (whether as an employee, director or consultant) with
the Company or an Affiliate is terminated “for cause”:
|
a.
|
All
Shares subject to any Stock Grant shall be immediately subject to
repurchase by the Company at the purchase price, if any,
thereof;
|
|
b.
|
For
purposes of this Plan, “cause” shall include (and is not limited to)
dishonesty with respect to the employer, insubordination, substantial
malfeasance or non-feasance of duty, unauthorized disclosure of
confidential information, breach by the Participant of any provision
of
any employment, consulting, advisory, nondisclosure, non-competition
or
similar agreement between the Participant and the Company, and conduct
substantially prejudicial to the business of the Company or any Affiliate.
The determination of the Administrator as to the existence of “cause” will
be conclusive on the Participant and the
Company;
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c.
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“Cause”
is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s
finding of “cause” occur prior to termination. If the Administrator
determines, subsequent to a Participant’s termination of service, that
either prior or subsequent to the Participant’s termination the
Participant engaged in conduct which would constitute “cause,” then the
Company’s right to repurchase all of such Participant’s Shares shall
apply; and
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d.
|
Any
provision in an agreement between the Participant and the Company
or an
Affiliate, which contains a conflicting definition of “cause” for
termination and which is in effect at the time of such termination,
shall
supersede the definition in this Plan with respect to that
Participant.
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20.
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EFFECT
ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.
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Except
as
otherwise provided in a Participant’s Agreement, the following rules apply if a
Participant ceases to be an employee, director or consultant of the Company
or
of an Affiliate by reason of Disability: to the extent the Company’s rights of
repurchase have not lapsed on the date of Disability, they shall be exercisable;
provided, however, that in the event such rights of repurchase lapse
periodically, such rights shall lapse to the extent of a pro rata portion of
the
Shares subject to such Stock Grant through the date of Disability as would
have
lapsed had the Participant not become Disabled. The proration shall be based
upon the number of days accrued prior to the date of Disability.
The
Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid
for
by the Company.
21.
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EFFECT
ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR
CONSULTANT.
|
Except
as
otherwise provided in a Participant’s Agreement, the following rules apply in
the event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate: to the extent the
Company’s rights of repurchase have not lapsed on the date of death, they shall
be exercisable; provided, however, that in the event such rights of repurchase
lapse periodically, such rights shall lapse to the extent of a pro rata portion
of the Shares subject to such Stock Grant through the date of death as would
have lapsed had the Participant not died. The proration shall be based upon
the
number of days accrued prior to the Participant’s death.
22.
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PURCHASE
FOR INVESTMENT.
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Unless
the offering and sale of the Shares to be issued upon the particular exercise
or
acceptance of a Stock Right shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the “1933 Act”),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been
fulfilled:
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a.
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The
person(s) who exercise(s) or accept(s) such Stock Right shall warrant
to
the Company, prior to the receipt of such Shares, that such person(s)
are
acquiring such Shares for their own respective accounts, for investment,
and not with a view to, or for sale in connection with, the distribution
of any such Shares, in which event the person(s) acquiring such Shares
shall be bound by the provisions of the following legend which shall
be
endorsed upon the certificate(s) evidencing their Shares issued pursuant
to such exercise or such grant:
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“The
shares represented by this certificate have been taken for investment and they
may not be sold or otherwise transferred by any person, including a pledgee,
unless (1) either (a) a Registration Statement with respect to such shares
shall
be effective under the Securities Act of 1933, as amended, or (b) the Company
shall have received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there shall have
been compliance with all applicable state securities laws.”
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b.
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At
the discretion of the Administrator, the Company shall have received
an
opinion of its counsel that the Shares may be issued upon such particular
exercise or acceptance in compliance with the 1933 Act without
registration thereunder.
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23.
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DISSOLUTION
OR LIQUIDATION OF THE COMPANY.
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Upon
the
dissolution or liquidation of the Company, all Options granted under this Plan
which as of such date shall not have been exercised and all Stock Grants and
Stock-Based Awards which have not been accepted will terminate and become null
and void; provided, however, that if the rights of a Participant or a
Participant’s Survivors have not otherwise terminated and expired, the
Participant or the Participant’s Survivors will have the right immediately prior
to such dissolution or liquidation to exercise or accept any Stock Right to
the
extent that the Stock Right is exercisable or subject to acceptance as of the
date immediately prior to such dissolution or liquidation. Upon the dissolution
or liquidation of the Company, any outstanding Stock-Based Awards shall
immediately terminate unless otherwise determined by the Administrator or
specifically provided in the applicable Agreement.
Upon
the
occurrence of any of the following events, a Participant’s rights with respect
to any Stock Right granted to him or her hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in a Participant’s
Agreement:
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A.
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Stock
Dividends and Stock Splits.
If (i) the shares of Common Stock shall be subdivided or combined
into a
greater or smaller number of shares or if the Company shall issue
any
shares of Common Stock as a stock dividend on its outstanding Common
Stock, or (ii) additional shares or new or different shares or other
securities of the Company or other non-cash assets are distributed
with
respect to such shares of Common Stock, the number of shares of Common
Stock deliverable upon the exercise of an Option or acceptance of
a Stock
Grant may be appropriately increased or decreased proportionately,
and
appropriate adjustments may be made including, in the purchase price
per
share, to reflect such events. The number of Shares subject to options
to
be granted to directors pursuant to Paragraph 6(A)(e) and the number
of
Shares subject to the limitations in Paragraphs 3 and 4(c) shall
also be
proportionately adjusted upon the occurrence of such
events.
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B.
|
Corporate
Transactions.
If the Company is to be consolidated with or acquired by another
entity in
a merger, sale of all or substantially all of the Company’s assets other
than a transaction to merely change the state of incorporation (a
“Corporate Transaction”), the Administrator or the board of directors of
any entity assuming the obligations of the Company hereunder (the
“Successor Board”), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting
on an equitable basis for the Shares then subject to such Options
either
the consideration payable with respect to the outstanding shares
of Common
Stock in connection with the Corporate Transaction or securities
of any
successor or acquiring entity; or (ii) upon written notice to the
Participants, provide that all Options must be exercised (either
(a) to
the extent then exercisable or, (b) at the discretion of the
Administrator, all Options being made fully exercisable for purposes
of
this Subparagraph), within a specified number of days of the date
of such
notice, at the end of which period the Options shall terminate; or
(iii)
terminate all Options in exchange for a cash payment equal to the
excess
of the Fair Market Value of the Shares subject to such Options (either
(a)
to the extent then exercisable or, (b) at the discretion of the
Administrator, all Options being made fully exercisable for purposes
of
this Subparagraph) over the exercise price
thereof.
|
With
respect to outstanding Stock Grants, the Administrator or the Successor Board,
shall either (i) make appropriate provisions for the continuation of such Stock
Grants by substituting on an equitable basis for the Shares then subject to
such
Stock Grants either the consideration payable with respect to the outstanding
Shares of Common Stock in connection with the Corporate Transaction or
securities of any successor or acquiring entity; or (ii) upon written notice
to
the Participants, provide that all Stock Grants must be accepted (to the extent
then subject to acceptance) within a specified number of days of the date of
such notice, at the end of which period the offer of the Stock Grants shall
terminate; or (iii) terminate all Stock Grants in exchange for a cash payment
equal to the excess of the Fair Market Value of the Shares subject to such
Stock
Grants over the purchase price thereof, if any. In addition, in the event of
a
Corporate Transaction, the Administrator may waive any or all Company repurchase
rights with respect to outstanding Stock Grants.
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C.
|
Recapitalization
or Reorganization.
In the event of a recapitalization or reorganization of the Company,
other
than a Corporate Transaction, pursuant to which securities of the
Company
or of another corporation are issued with respect to the outstanding
shares of Common Stock, a Participant upon exercising an Option or
accepting a Stock Grant after the recapitalization or reorganization
shall
be entitled to receive for the purchase price paid upon such exercise
or
acceptance the number of replacement securities which would have
been
received if such Option had been exercised or Stock Grant accepted
prior
to such recapitalization or
reorganization.
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D.
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Adjustments
to Stock-Based Awards.
Upon the happening of any of the events described in Subparagraphs
A, B or
C above, any outstanding Stock-Based Award shall be appropriately
adjusted
to reflect the events described in such Subparagraphs. The Administrator
or the Successor Board shall determine the specific adjustments to
be made
under this Paragraph 24 and, subject to Paragraph 4, its determination
shall be conclusive.
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E.
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Modification
of ISOs.
Notwithstanding the foregoing, any adjustments made pursuant to
Subparagraph A, B or C above with respect to ISOs shall be made only
after
the Administrator determines whether such adjustments would constitute
a
“modification” of such ISOs (as that term is defined in Section 424(h) of
the Code) or would cause any adverse tax consequences for the holders
of
such ISOs. If the Administrator determines that such adjustments
made with
respect to ISOs would constitute a modification of such ISOs, it
may
refrain from making such adjustments, unless the holder of an ISO
specifically requests in writing that such adjustment be made and
such
writing indicates that the holder has full knowledge of the consequences
of such “modification” on his or her income tax treatment with respect to
the ISO.
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25.
|
ISSUANCES
OF SECURITIES.
|
Except
as
expressly provided herein, no issuance by the Company of shares of stock of
any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to,
the
number or price of shares subject to Stock Rights. Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company prior to any issuance
of Shares pursuant to a Stock Right.
No
fractional shares shall be issued under the Plan and the person exercising
a
Stock Right shall receive from the Company cash in lieu of such fractional
shares equal to the Fair Market Value thereof.
27.
|
CONVERSION
OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOS.
|
The
Administrator, at the written request of any Participant, may in its discretion
take such actions as may be necessary to convert such Participant’s ISOs (or any
portions thereof) that have not been exercised on the date of conversion into
Non-Qualified Options at any time prior to the expiration of such ISOs,
regardless of whether the Participant is an employee of the Company or an
Affiliate at the time of such conversion. At the time of such conversion, the
Administrator (with the consent of the Participant) may impose such conditions
on the exercise of the resulting Non-Qualified Options as the Administrator
in
its discretion may determine, provided that such conditions shall not be
inconsistent with this Plan. Nothing in the Plan shall be deemed to give any
Participant the right to have such Participant’s ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless
the
Administrator takes appropriate action. The Administrator, with the consent
of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.
In
the
event that any federal, state, or local income taxes, employment taxes, Federal
Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts are
required by applicable law or governmental regulation to be withheld from the
Participant’s salary, wages or other remuneration in connection with the
exercise or acceptance of a Stock Right or in connection with a Disqualifying
Disposition (as defined in Paragraph 29) or upon the lapsing of any right of
repurchase, the Company may withhold from the Participant’s compensation, if
any, or may require that the Participant advance in cash to the Company, or
to
any Affiliate of the Company which employs or employed the Participant, the
statutory minimum amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company’s Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law).
For
purposes hereof, the fair market value of the shares withheld for purposes
of
payroll withholding shall be determined in the manner provided in Paragraph
1
above, as of the most recent practicable date prior to the date of exercise.
If
the fair market value of the shares withheld is less than the amount of payroll
withholdings required, the Participant may be required to advance the difference
in cash to the Company or the Affiliate employer. The Administrator in its
discretion may condition the exercise of an Option for less than the then Fair
Market Value on the Participant’s payment of such additional
withholding.
29.
|
NOTICE
TO COMPANY OF DISQUALIFYING
DISPOSITION
|
Each
Employee who receives an ISO must agree to notify the Company in writing
immediately after the Employee makes a Disqualifying Disposition of any shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is
defined in Section 424(c) of the Code and includes any disposition (including
any sale or gift) of such shares before the later of (a) two years after the
date the Employee was granted the ISO, or (b) one year after the date the
Employee acquired Shares by exercising the ISO, except as otherwise provided
in
Section 424(c) of the Code. If the Employee has died before such stock is sold,
these holding period requirements do not apply and no Disqualifying Disposition
can occur thereafter.
30.
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TERMINATION
OF THE PLAN.
|
The
Plan
will terminate on April 19, 2015, the date which is ten years from the earlier
of the date of its adoption by the Board of Directors and the date of its
approval by the shareholders of the Company. The Plan may be terminated at
an
earlier date by vote of the shareholders or the Board of Directors of the
Company; provided, however, that any such earlier termination shall not affect
any Agreements executed prior to the effective date of such
termination.
31.
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AMENDMENT
OF THE PLAN AND AGREEMENTS.
|
The
Plan
may be amended by the shareholders of the Company. The Plan may also be amended
by the Administrator, including, without limitation, to the extent necessary
to
qualify any or all outstanding Stock Rights granted under the Plan or Stock
Rights to be granted under the Plan for favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code, and to the extent necessary to
qualify the shares issuable upon exercise or acceptance of any outstanding
Stock
Rights granted, or Stock Rights to be granted, under the Plan for listing on
any
national securities exchange or quotation in any national automated quotation
system of securities dealers. Any amendment approved by the Administrator which
the Administrator determines is of a scope that requires shareholder approval
shall be subject to obtaining such shareholder approval. Any modification or
amendment of the Plan shall not, without the consent of a Participant, adversely
affect his or her rights under a Stock Right previously granted to him or her.
With the consent of the Participant affected, the Administrator may amend
outstanding Agreements in a manner which may be adverse to the Participant
but
which is not inconsistent with the Plan. In the discretion of the Administrator,
outstanding Agreements may be amended by the Administrator in a manner which
is
not adverse to the Participant.
32.
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EMPLOYMENT
OR OTHER RELATIONSHIP.
|
Nothing
in this Plan or any Agreement shall be deemed to prevent the Company or an
Affiliate from terminating the employment, consultancy or director status of
a
Participant, nor to prevent a Participant from terminating his or her own
employment, consultancy or director status or to give any Participant a right
to
be retained in employment or other service by the Company or any Affiliate
for
any period of time.
This
Plan
shall be construed and enforced in accordance with the law of the State of
Delaware.
ANNEX
B
CERTIFICATE
OF AMENDMENT
OF
RESTATED
CERTIFICATE OF INCORPORATION
OF
SYNVISTA
THERAPEUTICS, INC.
It
is
hereby certified that:
1.
The
name of the corporation (hereinafter called the “Corporation”) is Synvista
Therapeutics, Inc.
2.
The
Restated Certificate of Incorporation of the Corporation, as amended to date,
is
hereby further amended by striking out the first paragraph of Article FOURTH
in
its entirety and substituting in lieu thereof the following:
“FOURTH:
A. Designation
and Number of Shares.
The
total
number of shares of all classes of stock which the Corporation shall have the
authority to issue is 165,000,000 shares, consisting of 150,000,000 shares
of
common stock, par value $0.01 per share (the “Common
Stock”)
and
15,000,000 shares of Preferred Stock, par value $0.01 per share (the
“Preferred
Stock”).”
3.
The
foregoing amendment was adopted in accordance with Section 242 of the
General Corporation Law of the State of Delaware.
4.
This
Certificate of Amendment shall become effective at 5:00 p.m., local time, on
[ ],
2008.
Signed
this
[ ]
day of
[ ],
2008.
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By:
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Name:
Noah Berkowitz, M.D., Ph.D.
Title:
President and Chief Executive
Officer
|
ANNEX
C
REVOCABLE
PROXY
SYNVISTA
THERAPEUTICS, INC.
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE
CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS
The
undersigned hereby constitutes and appoints Noah Berkowitz his or her true
and
lawful agent and proxy to represent and to vote on behalf of the undersigned
all
of the shares of Synvista Therapeutics, Inc. (the “Company”) which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Marriott Park Ridge, 300 Brae Boulevard, Park
Ridge, NJ 07656, at 10:00 A.M., local time, on July 22, 2008, and at
any adjournment or adjournments thereof, upon the following proposals more
fully
described in the Notice of the Annual Meeting of Stockholders and Proxy
Statement for the Meeting (receipt of which is hereby
acknowledged).
THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS PROVIDED, THIS PROXY WILL BE VOTED
“FOR” THE ELECTION OF ONE DIRECTOR NOMINEE AND “FOR” PROPOSALS 2-4 AND, WITH
RESPECT TO SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING, AND
ANY
ADJOURNMENT OR POSTPONEMENT THEREOF, IN THE DISCRETION OF THE PERSON NAMED
ABOVE
AS PROXY HOLDER.
(CONTINUED
AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL
MEETING OF STOCKHOLDERS OF
SYNVISTA
THERAPEUTICS, INC.
JULY
22,
2008
Please
date, sign and mail
your
proxy card as soon
as
possible.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF ONE DIRECTOR NOMINEE
AND “FOR” EACH OF THE PROPOSALS
PLEASE
SIGN, DATE AND RETURN PROMPTLY. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK
AS
SHOWN HERE ý
To
change the address on your account, please check the box at right
and
indicate your new address in the address space above. Please note
that
changes to the registered name(s) on the account may not be submitted
via
this method.
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¨
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FOR
|
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AGAINST/
WITHHOLD
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ABSTAIN
|
1.
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To
elect Noah Berkowitz, M.D., Ph.D. as a Class B director to hold office
until the 2011 annual meeting of stockholders and until his successor
has
been duly elected and qualified;
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¨
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¨
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2.
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To
approve an amendment to the Company’s 2005 Stock Plan to increase the
number of shares of common stock authorized for issuance under the
Plan
from 1,060,000 to 2,000,000;
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¨
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¨
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¨
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3.
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To
approve an amendment to the Company’s Restated Certificate of
Incorporation to decrease the number of shares of common stock authorized
for issuance from 300,000,000 to 150,000,000;
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¨
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¨
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¨
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4.
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To
ratify the selection of J.H. Cohn LLP as the Company’s independent
registered public accounting firm for the fiscal year ending
December 31, 2008; and
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¨
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¨
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¨
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5.
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To
transact such other business as may properly come before the meeting
or
any adjournment or postponement thereof.
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PLEASE
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING.
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¨
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Signature
of Stockholder
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Date
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Signature
of Stockholder
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Date
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Note:
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Please
sign exactly as your name or names appear on this Proxy. When shares
are
held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title
as
such. If the signer is a corporation, please sign full corporate
name by
duly authorized officer, giving full title as such. If signer is
a
partnership, please sign in partnership name by authorized
person.
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