Governance and executive compensation policies

It is the company's policy to seek stockholder approval prior to its adoption of a stockholder rights plan, unless the board determines, with the concurrence of a majority of its independent non-executive members, that, due to timing concerns, it is in the best interests of the company's stockholders to adopt a stockholder rights plan without delay.

If a stockholder rights plan is adopted without prior stockholder approval, the plan must provide that it shall expire unless ratified by stockholders within one year of adoption.

It is the Board of Directors’ policy that the company will not, without stockholder approval, amend any employee or non-employee director stock option to reduce the exercise price (except for appropriate adjustment in the case of a stock split or similar change in capitalization); or offer to exchange outstanding employee or non-employee director stock options for options having a lower exercise price; or offer to exchange options having an exercise price above the current market price for cash, restricted stock, or other consideration.

It is the Board of Directors’ policy that the company will, to the extent permitted by governing law, require reimbursement of any bonus paid to executive officers and certain other officers after March 1, 2005 where: a) the payment was predicated upon the achievement of certain financial results that were subsequently the subject of a restatement, b) in the Board’s view the executive engaged in misconduct that caused or partially caused the need for the restatement, and c) a lower payment would have been made to the executive based upon the restated financial results. In each such instance, the company will seek to recover the individual executive’s entire annual bonus for the relevant period, plus a reasonable rate of interest.

It is the Board of Director's policy that the company will seek recoupment of any bonus and/or other compensation paid to executives and certain other employees after December 4, 2012 where: a) the executive or other employee engaged in misconduct, or failed to appropriately supervise an employee who engaged in misconduct, that resulted in a material violation of a company policy relating to the research, development, manufacturing, sales or marketing of pharmaceutical products, and b) the Compensation and Management Development Committee determines that this material violation of a company policy resulted in a significant negative impact on our results of operations or market capitalization. In any instance where the employee misconduct occurred in a prior year, the Committee may elect to reduce a current or future bonus and/or other compensation award in lieu of requiring reimbursement of past compensation previously paid to such executive or other employee. In addition, in March 2020, our Board revised the policy to provide that, if legally permissible, the company will publicly disclose whenever a decision has been made to use the clawback policy, so long as the underlying event has already been publicly disclosed with the Securities and Exchange Commission.

It is the Board of Directors’ policy to seek stockholder approval for any future agreements with executive officers and certain other officers that would provide cash severance payments in an amount exceeding 2.99 times the sum of the executive’s base salary plus bonus for the last completed fiscal year. For purposes of this policy, “future agreements” means any such agreements the company may enter into, including any renewals or extensions of existing contracts, after March 1, 2005. “Cash severance payments” excludes the value of all other compensation and benefits that may apply such as the value of any other incentive compensation accrued to date, any acceleration of outstanding equity compensation, any continuation of employee benefits, and any increase in retirement benefits triggered by severance provisions or resulting from the satisfaction of tax gross-up obligations.