UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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FOR THE TRANSITION PERIOD FROM
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to
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COMMISSION FILE NUMBER: 001-34612
OSTEOTECH, INC.
(
Exact name of registrant as specified in its charter
)
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Delaware
(State of other jurisdiction of
Incorporation or organization)
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13-3357370
(I.R.S. Employer
Identification No.)
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51 James Way, Eatontown, New Jersey 07724
(Address of principal executive officer, including zip code)
(732) 542-2800
(Registrants telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
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NASDAQ Global Market
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Preferred Stock Purchase Rights
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.
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Yes
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No
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act.
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Yes
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No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
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Yes
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No
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such file).
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Yes
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No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Act).
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Yes
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No
The aggregate market value of the voting and non-voting common equity, held by non-affiliates
of the registrant based on the last reported sale price of the common stock on June 30, 2009 was
approximately $77,868,965.
The number of shares of the registrants common stock, $.01 par value, outstanding as of March
1, 2010 was 18,076,546.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Explanatory Note
On March 8, 2010, Osteotech, Inc. (the
Company
) filed with the Securities and Exchange
Commission (the
SEC
) its Annual Report on Form 10-K for the fiscal year ended December 31, 2009
(the
Original Form 10-K
). On April 30, 2010, the Company filed with the SEC Amendment No. 1 on
Form 10-K/A (
Amendment No. 1
) to amend the Original Form 10-K to include information in Part III,
Items 10 through 14 since a definitive proxy statement for the election of directors would not be
filed with the SEC by April 30, 2010. Currently dated certifications from the Companys Chief
Executive Officer and Chief Financial Officer as required by Section 302 of the Sarbanes-Oxley Act
of 2002 were inadvertently omitted from Amendment No. 1. Therefore, this Amendment No. 2 on Form
10-K/A (
Amendment No. 2
) is being filed to include the Section 302 certifications that were
omitted from Amendment No. 1. In accordance with SEC interpretations, the Company is including in
this Amendment No. 2 all of the disclosures that were included in Amendment No. 1. Except for the
inclusion of currently dated Section 302 certifications, this Amendment No. 2 does not amend or
update any other information contained in Amendment No. 1.
OSTEOTECH, INC.
Form 10-K/A
for the year ended December 31, 2009
Table of Contents
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
The following section sets forth certain information concerning our directors and executive
officers, including, with respect to our directors, information regarding the specific experience,
qualifications, attributes or skills that led to the conclusion that such person should serve as a
director of the Company in light of our business and structure.
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Director or
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Name
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Age
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Officer Since
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Current Position with Company
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Kenneth P. Fallon III
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1995
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Chairman of the Board of Directors
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Sam Owusu-Akyaw
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2004
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President, Chief Executive Officer and Director
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Stephen S. Galliker
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2004
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Director
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Dr. Cato T. Laurencin
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2008
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Director
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Robert J. Palmisano
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2005
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Director
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James M. Shannon
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2007
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Director
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Mark H. Burroughs
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2000
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Executive Vice President and Chief Financial Officer
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Robert W. Honneffer
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2004
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Executive Vice President, Global Operations
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Robert W. Wynalek
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2004
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President, Domestic
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Kenneth P. Fallon, III
has served as a director of Osteotech since June 1995, and as Chairman
of the Board since November 2005. Since March 2004, Mr. Fallon has been an Associate with Kairos
Partners, an investment firm and a stockholder that owns approximately 5.2% of our outstanding
stock. Mr. Fallon retired as the Chairman of the Board of Axya Medical, Inc., a Massachusetts
based privately held medical device company, in March 2003 and was the Chief Executive Officer of
Axya Medical Inc., from May 1999 until December 2002. In 1997 and 1998, Mr. Fallon was President
of the surgical business at Haemonetics Corporation. In 1994 and 1995, Mr. Fallon served as Chief
Executive Officer and Chairman of the Board of UltraCision, Inc., a developer and manufacturer of
ultrasonically powered surgical instruments. UltraCision, Inc. was sold to Ethicon EndoSurgery, a
unit of Johnson & Johnson, Inc., in November 1995. From 1992 through 1994, Mr. Fallon served as
President and Chief Executive Officer of American Surgical Technologies Corporation. Mr. Fallon
was President, U.S. Operations of Zimmer, Inc., then a subsidiary of Bristol-Myers Squibb Company,
from 1991 to 1992. From 1985 through 1991 he served as President of Zimmers Orthopaedic Implant
Division, and from 1983 to 1985 as its Vice President of Marketing. Mr. Fallon previously served
in positions of significant responsibility with the Codman and Orthopedic Divisions of Johnson &
Johnson, Inc. Mr. Fallon is also a director of Conformis Inc., a privately held medical device
firm. Mr. Fallon has a B.B.A. degree in marketing from the University of Massachusetts and an
M.B.A. from Northeastern University. We believe that Mr. Fallons experience in the medical device
industry, particularly his experience serving as the Chief Executive Officer and a member of the
Board of Directors of several medical device companies, makes him well-suited to serve as a member
of our Board of Directors.
Sam Owusu-Akyaw
joined Osteotech in July 2004 as President and Chief Operating Officer and as
a member of the Board. Since January 2006, he has served in his current position of President,
Chief Executive Officer and Director. Prior to joining Osteotech, Mr. Owusu-Akyaw served as
General Manager of Medtronic Midas Rex and Vice President of Medtronic, Inc. from 2000 through June
2004, and Chief Operating Officer of Medtronic Midas Rex from 1999 to 2000. Mr. Owusu-Akyaw was
Vice President of Operations of DePuy-Acromed, a Johnson & Johnson Company, from 1998 to 1999 and
Vice President of Acromed, Inc. from 1996 to 1998. Mr. Owusu-Akyaw was Vice President, BMS
Productivity for Growth Initiative of Bristol-Myers Squibb Company from 1994 to 1996.
From 1977 to 1994, Mr. Owusu-Akyaw served in positions of increasing responsibility with
Zimmer, Inc., then a subsidiary of Bristol-Myers Squibb Company. Mr. Owusu-Akyaw has a B.A. degree
in accounting and computer science from Manchester College and an M.B.A. in finance and operations
from the University of Houston. We believe that Mr. Owusu-Akyaws executive level experience in
the medical device industry, particularly his experience as the Chief Executive Officer of
Osteotech, makes him well-suited to serve as a member of our Board of Directors.
1
Stephen S. Galliker
has served as a director of Osteotech since March 2004. Mr. Galliker
served as Executive Vice President, Finance and Administration, and Chief Financial Officer of Dyax
Corp., a biopharmaceutical company, from September 1999 to his retirement in July 2008. He was
Chief Financial Officer of Excel Switching Corporation, a developer and manufacturer of open
switching platforms for telecommunications networks, from July 1996 to September 1999, and was
Excels Vice President, Finance and Administration from September 1997 to September 1999. Mr.
Galliker was employed by UltraCision, Inc., a developer and manufacturer of ultrasonically powered
surgical instruments, from September 1992 to June 1996. At UltraCision, Inc., Mr. Galliker was
Chief Financial Officer and Vice President of Finance until November 1995 and Chief Operating
Officer from December 1995 to June 1996. In addition, Mr. Galliker has been a director of RXi
Pharmaceuticals, a publicly held biopharmaceutical company, since 2007. Mr. Galliker has a
B.S.B.A. in management and finance from Georgetown University and an M.B.A. from the University of
Chicago. We believe that Mr. Gallikers executive level experience in finance in the medical
device industry, particularly his experience serving as the chief financial officer of a medical
device company, makes him well-suited to serve as a member of our Board of Directors.
Dr. Cato T. Laurencin
has served as a director of Osteotech since September 2008. Dr.
Laurencin is currently the Vice President for Health Affairs at the University of Connecticut
Health Center and Dean of the University of Connecticut School of Medicine. At the University of
Connecticut, Dr. Laurencin also holds the Albert and Wilda Van Dusen Endowed Chair in Academic
Medicine and is a Distinguished Professor of Orthopedic Surgery. From February 2003 until August
2008, Dr. Laurencin was the Lillian T. Pratt Distinguished Professor and Chair of the Department of
Orthopedic Surgery at the University of Virginia. Dr. Laurencin was also designated a University
Professor by the President of the University of Virginia. Prior to February 2003, Dr. Laurencin
held various positions of increasing responsibility at Drexel University, including the Helen I.
Moorehead Distinguished Professor of Chemical Engineering, Vice Chairman of the Department of
Orthopedic Surgery and Director of Shoulder Surgery, and at MCP-Hahnemann School of Medicine, where
he served as Clinical Professor of Orthopedic Surgery and Research Professor of Pharmacology and
Physiology. Dr. Laurencin has a B.S.E. degree in chemical engineering from Princeton University,
an M.D. from Harvard University Medical School and a Ph.D. in biochemical engineering/biotechnology
from the Massachusetts Institute of Technology. We believe that Dr. Laurencins experience as a
practitioner and professor of orthopedic surgery, as well as his significant executive level
leadership experience at a number of medical schools, makes him well-suited to serve as a member of
our Board of Directors.
Robert J. Palmisano
has served as a director of Osteotech since March 2005. Mr. Palmisano is
currently the President and Chief Executive Officer of ev3, Inc., a medical device company focused
on catheter-based technologies for the endovascular treatment of vascular diseases and disorders.
From April 2003 until April 2008, Mr. Palmisano was the President, Chief Executive Officer and a
director of IntraLase Corp., a company engaged in the design, development and manufacture of laser
products for vision correction, which was acquired by Advanced Medical Optics, Inc. in April 2007.
Prior to joining IntraLase, from April 2001 to April 2003, Mr. Palmisano was the President, Chief
Executive Officer and a director of MacroChem Corporation, a development stage pharmaceutical
corporation. From April 1997 to January 2001, Mr. Palmisano served as the President and Chief
Executive Officer and as a director of Summit Autonomous, Inc., a global medical products company
that was acquired by Alcon, Inc. in October 2000. Prior to 1997, Mr. Palmisano held various
executive positions with Bausch & Lomb Incorporated, a global eye care company. Mr. Palmisano has
a B.A. degree in Political Science from Providence College. Mr. Palmisano serves on the board of
directors of ev3, Inc., a publicly held company, on the board of directors of both Bausch & Lomb
Incorporated and LenSX Lasers Inc., both privately held companies, and is a member of the Board of
Trustees for Providence College. During the past five years, Mr. Palmisano previously served on
the board of directors of Advanced Medical Optics Inc., a publicly held company. We believe that
Mr. Palmisanos experience in the medical device industry, particularly his experience serving as
an executive officer and a member of the Board of Directors of several medical device companies,
makes him well-suited to serve as a member of our Board of Directors.
2
James M. Shannon
has served as a director of Osteotech since March 2007. Since June 2002, Mr.
Shannon has been the President and Chief Executive Officer of the National Fire Protection
Association (the
NFPA
), an international organization which is the worlds leading advocate for
fire prevention, which provides and develops codes and standards, research, training and education.
From 1991 until June 2002, he was Senior Vice President and General Counsel of NFPA. Formerly,
Mr. Shannon was the Attorney General of the Commonwealth of Massachusetts from 1987 to 1991 and a
Senior Partner at the law firm of Hale & Dorr from 1985 to 1987. From 1979 to 1985, Mr. Shannon
represented the Commonwealth of Massachusetts in the U.S. House of Representatives, where he served
as a member of the Ways and Means Committee for six years and served on the Trade, Health and
Social Security Subcommittees. Mr. Shannon has a B.A. degree from Johns Hopkins University and a
J.D. from George Washington University. We believe that Mr. Shannons experience as the president
and chief executive officer of a national organization, as well as his experience as the Attorney
General of the Commonwealth of Massachusetts and a member of the U.S. House of Representatives,
makes him well-suited to serve as a member of our Board of Directors.
Mark H. Burroughs
has served as our Executive Vice President and Chief Financial Officer since
January 2006. Mr. Burroughs joined Osteotech in November 2000 as Vice President Finance and
Treasurer. Prior to joining Osteotech, Mr. Burroughs was Senior Vice President, Finance for
MEDIQ/PRN Life Support Services, Inc. During his tenure with MEDIQ/PRN, from November 1992 to
October 2000, Mr. Burroughs served in a variety of executive level capacities in finance,
operations, business development and mergers and acquisitions. Previously, Mr. Burroughs held
positions of increasing responsibility for nine years with Deloitte & Touche. Mr. Burroughs has
served on the Finance Committee of the American Association of Tissue Banks since 2004. Mr.
Burroughs is a Certified Public Accountant and has a B.S. in Accounting from Montclair State
University.
Robert W. Honneffer
joined Osteotech in September 2004 and was elected Executive Vice
President, Operations Services/Materials Management in January 2010. From January 2009 until
January 2010, Mr. Honneffer served as Executive Vice President, Global Operations. Mr. Honneffer
was elected President of OST Development, a subsidiary of the Company, in January 2007. From April
2006 to January 2009, Mr. Honneffer served as Senior Vice President, Operations. From December
2004 to April 2006, Mr. Honneffer served as Vice President Operations and from September 2004 to
December 2004, he served as Vice President Supply Chain & Distribution. Mr. Honneffer has over 30
years of diversified medical device experience. Immediately prior to joining Osteotech, Mr.
Honneffer served as Director of Customer Services and Technical Support at Medtronic Powered
Surgical Solutions. Prior to Medtronic, Mr. Honneffer held positions in business development and
general management with CASurgica Inc., OrtoMaquet AG and Unique Instruments Inc. From 1973 until
1997, Mr. Honneffer held various positions of increasing responsibility with Zimmer, Inc., then a
division of Bristol-Myers Squibb Inc. Mr. Honneffer has an M.S. in Business Administration from
St. Francis College and a B.S. in Mechanical Engineering from Youngstown State University.
Robert M. Wynalek
joined Osteotech in September 2004 and was elected President Domestic in
April 2006. From September 2004 to April 2006, Mr. Wynalek served as Senior Vice President, Sales
& Marketing. Prior to joining Osteotech, Mr. Wynalek had more than 26 years in sales and marketing
experience in the medical device and related industries. Mr. Wynalek served as Vice President of
Marketing for Medtronic Powered Surgical Solutions from April 1999 to September 2004, and as
Director, Powered Surgical Systems, a division of Medtronic Sofamor Danek, from June 1996 until
April 1999. From September 1990 until June 1996, Mr. Wynalek served in positions of increasing
responsibility with Smith & Nephew Orthopedics. From June 1981 until September 1990, Mr. Wynalek
held positions with Becton Dickinson and Company and Levor Brothers Company. Mr. Wynalek has a
B.S.B.A. in Marketing from Bowling Green University.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Exchange Act and SEC rules, our directors, executive officers and
beneficial owners of more than 10% of any class of equity security are required to file reports of
their ownership, and changes in that ownership, with the SEC. Based solely on our review of copies
of these reports and representations of such
reporting persons, we believe that during fiscal year 2009, such SEC filing requirements were
satisfied on a timely basis, except that Dr. Laurencin, one of our directors, filed one late Form 5
reporting one transaction. In the first quarter of fiscal 2010, Messrs. Burroughs, Honneffer,
Owusu-Akyaw and Wynalek each filed one late Form 4 reporting one transaction.
3
Code of Ethics
We have adopted a code of ethics that applies to all our officers and employees, including our
principal executive officer and principal financial officer/principal accounting officer. This
code of ethics is included in the Code of Business Conduct and Ethics which is available on our
website at www.osteotech.com. We intend to post on our website any amendment to, or waiver from, a
provision of our Code of Ethics that applies to any director or officer promptly following the date
of such amendment or waiver.
Changes to Procedures for Stockholders to Nominate Persons for Election to the Board of Directors
During 2009, the Company did not make any material changes to the procedures by which
stockholders may recommend nominees to our Board of Directors.
Audit Committee
As of April 1, 2010, the Audit Committee consisted of Messrs. Galliker (Chairman), Fallon and
Shannon. Dr. Laurencin served on the Audit Committee until June 18, 2009, at which time Mr. Fallon
was appointed to serve as a member of the Audit Committee. In compliance with audit committee
requirements for NASDAQ companies, all members of the Audit Committee are independent, as
independence is defined in the NASDAQ listing standards and in Rule 10A-3 promulgated under the
Exchange Act. Each of the members is able to read and understand financial statements, including a
balance sheet, income statement and statement of cash flow. The Board has determined that Mr.
Galliker is an audit committee financial expert as such term is defined under the applicable SEC
rules. The Audit Committee met four times during 2009. The Audit Committee has adopted a Charter,
which may be found on our website at www.osteotech.com. The Charter describes the primary purpose
of the Audit Committee as assisting the Board in fulfilling its responsibility to oversee
managements conduct of our financial reporting process and to ensure that our financial condition
and results of operations are fully, timely, fairly, accurately and understandably reported to our
investors and the investment community in general. The charter specifies that the Audit Committee
is to fulfill its purpose by overseeing: (a) the financial reports and other financial information
provided by us to any governmental or regulatory body, the public or other user thereof; (b) our
systems of internal accounting and financial controls and managements evaluation thereof in
accordance with the Sarbanes-Oxley Act of 2002; (c) the annual independent audit of our
consolidated financial statements and internal control over financial reporting conducted by our
independent registered public accounting firm; and (d) our legal compliance and ethics programs as
established by management and the Board.
Item 11. Executive Compensation.
Compensation Discussion and Analysis
The Compensation Committee determines all compensation paid or awarded to our executive
officers, including the Named Executive Officers. The following discussion describes the
objectives of our compensation programs, including the philosophy and policies behind the programs,
the elements of our compensation programs, and the impact of regulatory requirements on our
compensation decisions and programs.
Objectives of Our Compensation Programs
Compensation Philosophy
The Compensation Committee believes Osteotech must retain, adequately compensate and
financially motivate talented and ambitious managers capable of leading Osteotechs planned
expansion in highly competitive fields, in which many of Osteotechs competitors have greater total
resources. The Compensation Committees goal is to use Osteotechs resources wisely by attracting
and retaining the most effective and efficient management organization
possible. In determining the compensation of the executive officers in 2009, the Compensation
Committee utilized (1) established salary administration practices, (2) the standards set forth in
the Management Performance Bonus Plan and (3) established practices for stock-based incentive
awards to establish salaries, bonuses and equity awards for executive officers in comparison to
those paid by the companies within the Compensation Peer Group (as defined below).
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The Compensation Committee believes that the best interests of the Companys stockholders will
be served if the executive officers are focused on the long-term objectives of Osteotech, as well
as the current years goals. The Compensation Committee views base salary and cash bonuses to be
the best solution to reward and provide incentive for the achievement of current goals and
restricted stock units and other stock-based awards to be the best method to provide incentive to
management to focus on achieving long-term objectives.
It should also be noted that:
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exceptions to the general principles stated herein are made when the Compensation
Committee deems them appropriate to the stockholders interests;
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the Compensation Committee regularly considers other forms of compensation and
modifications of its present policies, and will make changes as it deems appropriate; and
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the competitive opportunities to which Osteotechs executives are exposed frequently
come from private companies or divisions of large companies, for which published
compensation data is often unavailable, with the result that the Compensation Committees
information about such opportunities is often anecdotal.
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Compensation Policies
In making compensation decisions for Osteotechs executive officers, the Compensation
Committee compares each element of total compensation against a peer group of publicly-traded
companies in competitive industries (the
Compensation Peer Group
). The Compensation Peer Group,
which is periodically reviewed and updated by the Compensation Committee, consists of companies
against which the Compensation Committee believes Osteotech competes for talent and stockholder
investment. The companies comprising the Compensation Peer Group are:
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Cryolife, Inc.
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Orthofix International N.V.
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Exactech Inc.
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RTI Biologics, Inc.
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Integra Lifesciences Holdings Corporation
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Wright Medical Group, Inc.
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Kensey Nash Corporation
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There is no pre-established policy or target for the allocation between either cash or
non-cash or short-term and long-term incentive compensation. The Compensation Committee
determines, at its discretion based upon previous consultations with Mercer Human Resource
Consulting, the appropriate level and mix of incentive compensation. The Compensation Committees
goal is to set total compensation (cash compensation plus long-term compensation) for each of the
Companys Named Executive Officers at the median level or higher of companies comprising the
Compensation Peer Group. However, in evaluating the cost to the Company of such a program, it was
determined that the cost is more than the Company can bear on a recurring basis and the
Compensation Committee utilizes its discretion in evaluating overall compensation for the executive
officers.
Components of the Compensation Package
The compensation package for each of the Named Executive Officers consists of four elements:
(1) base salary, (2) Management Performance Bonus Plan, (3) stock-based incentive programs, and (4)
various other benefits. In addition, the Named Executive Officers have entered into employment
agreements with us, and are entitled to receive change of control and severance payments. More
specific information on each of these elements is provided under Employment and Change in Control
Agreements in this Amendment No. 2.
5
The Compensation Committee independently determines, taking into account the recommendation of
the Chief Executive Officer for Named Executive Officers other than the Chief Executive Officer,
the amount and allocation of each component of the compensation package for each Named Executive
Officer.
Base Salary
The salaries paid to executive officers were determined in accordance with Osteotechs salary
administration practices utilized by the Compensation Committee. In addition, the Compensation
Committee considers input from Mercer Human Resource Consulting. The most recent report provided
by Mercer Human Resource Consulting to the Compensation Committee on salary levels was provided in
April 2007.
The range of salary levels paid to the Named Executive Officers was established based upon
competitive factors in the marketplace and the level of the executive officers position within
Osteotechs management structure. The actual salary paid within such range is based, initially, on
qualifications, and on an ongoing basis, upon a combination of the executive officers
qualifications and the executive officers individual performance.
Increases in salaries are generally based upon performance reviews which are conducted
annually by the Chief Executive Officer and the Compensation Committee at the calendar year end.
Effective January 1, 2009, the Compensation Committee effected salary increases for the Named
Executive Officers based upon each executive officers individual performance and, in the case of
Mr. Owusu-Akyaw, competitive market data. The following table summarizes the salary increases for
the Named Executive Officers that became effective January 1, 2009:
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Fiscal 2008
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Fiscal 2009
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Percent
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Salary
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Salary
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Increase for
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Name
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($)
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($)
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Fiscal 2009
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Sam Owusu-Akyaw
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400,000
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414,000
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3.5
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%
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Mark H. Burroughs
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248,400
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257,094
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3.5
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%
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Robert W. Honneffer
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204,880
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212,051
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(1)
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3.5
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%
(1)
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Robert M. Wynalek
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264,690
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273,954
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(1)
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3.5
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%
(1)
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(1)
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Mr. Honneffer and Mr. Wynalek each elected to receive restricted stock units (
RSUs
) in lieu
of cash salary increases in 2009. The number of RSUs awarded to each officer was based on a
3.5% salary increase to which each was entitled divided by the closing price of our common
stock on December 31, 2008. The RSUs were granted on January 13, 2009 and vested in two equal
tranches on June 30, 2009 and December 31, 2009.
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Based on the Companys financial performance in 2009 and the need for the Company to reduce
expenses and retain its cash reserves, the Company did not provide the Named Executive Officers
with salary increases for fiscal 2010. Salaries paid to the Named Executive Officers for fiscal
2010 will remain at the fiscal 2009 levels.
Management Performance Bonus Plan
Effective as of January 1, 2006, the Compensation Committee adopted a revised Management
Performance Bonus Plan (the
Plan
). The Plan provides for the payment of cash bonuses to the
Companys officers, director-level employees and certain other senior managers based on the
attainment by the Company of specified performance objectives. The primary objective of the Plan
is to provide incentives to the executive officers and other key members of management to achieve
financial and business objectives. The program is designed to:
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emphasize and improve Osteotechs performance;
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focus managements attention on key priorities and goals;
|
|
|
|
reward significant contributions to Osteotechs success; and
|
|
|
|
attract and retain results-oriented executives and senior managers.
|
6
Each participant in the Plan has a target incentive opportunity equal to a percentage of the
participants annual base salary. On an annual basis, the Companys senior management will
recommend the target incentive opportunity for consideration by the Compensation Committee and the
Compensation Committee will make the ultimate determination of the target incentive opportunity to
be applied. The target incentive opportunity is the amount that will be paid if the Company meets
all of its performance objectives. The actual payout to participants may be higher, lower or equal
to the target incentive opportunity.
Each year, the Companys senior management will recommend, for consideration by the
Compensation Committee, performance measures that support the Companys business plan for the
coming year and determine appropriate weighting for each performance measure. The Compensation
Committee will make the ultimate determination of the performance measures to be applied and the
appropriate weighting for each performance measure. Earnings Before Interest and Taxes (
EBIT
)
and/or revenue growth will be used as performance measures each year, although additional
performance measures may also be established. A minimum, target and maximum performance level for
each of the annual performance measures will be set each year. Performance below the minimum will
result in no payment for that performance measure. Performance exceeding expectations will result
in additional payouts up to the allowed maximum. At the target performance level, participants
will receive 100% of their target incentive opportunity. Payouts to participants in the Plan are
subject to the Companys ability to provide appropriate reserves through current year earnings to
fund any payment. The Compensation Committee has discretion to increase or decrease payout amounts
under the Plan, to amend or revise the performance targets and to establish new targets.
The target incentive opportunity for 2009 for the Chief Executive Officer was 50% of his
annual base salary and for each of the Companys other executive officers was 35% of the
participants annual base salary as set forth in the table below:
|
|
|
|
|
|
|
|
|
|
|
2009 Target
|
|
|
|
|
|
|
Incentive
|
|
|
2009 Target
|
|
|
|
Opportunity (as
|
|
|
Incentive
|
|
|
|
a percentage of
|
|
|
Opportunity
|
|
Name
|
|
base salary)
|
|
|
($)
|
|
Sam Owusu-Akyaw
|
|
|
50
|
%
|
|
|
207,000
|
|
Mark H. Burroughs
|
|
|
35
|
%
|
|
|
89,983
|
|
Robert W. Honneffer
|
|
|
35
|
%
|
|
|
74,218
|
|
Robert M. Wynalek
|
|
|
35
|
%
|
|
|
95,884
|
|
For 2009, the performance measures were as follows: (1) EBIT and (2) total revenue growth,
with the performance measure accounting for 40% and 60%, respectively, of the target incentive
opportunity. To receive a payout under the EBIT or total revenue growth performance measures, the
Company must achieve a minimum target level for each of the individual performance measures and
must generate sufficient earnings to fund reserves for any payouts earned. The performance
measures for 2009 were set at levels which the Compensation Committee intended to be challenging to
encourage the Companys executive officers to aggressively pursue the corporate objectives,
including increasing revenues and earnings. However, these performance measures were also intended
to be attainable, if the senior management team successfully executed upon the strategies and
tactics developed under Osteotechs strategic plan. The Compensation Committee believes a senior
management team that is providing strong performance should be able to satisfy the performance
measures under the Plan in most, but not all, years.
Subsequent to December 31, 2009, management of the Company assessed achievement under the
Plan. Because the Company did not meet the EBIT or total revenue growth targets set forth under
the Plan for 2009, no payouts were made for 2009.
7
In March 2010, the Compensation Committee set revenue growth as the key performance measure
under the Management Performance Bonus Plan for 2010. To achieve any payouts under the bonus plan
in 2010, the Company must overachieve the revenue target as detailed in the 2010 operating plan
approved by the Board of Directors by more than $1.0 million. Payouts will be based on the
magnitude of the revenue growth over the target and then earned on a pari passu basis in
relationship to all employees included in the bonus plan. The target incentive opportunity for
2010 for the Chief Executive Officer is 50% of his annual base salary and for each of the Companys
other executive officers is 35% of the participants annual base salary. In addition, to receive a
payout, the Company must generate sufficient earnings to fund reserves for any payouts earned.
Stock-Based Incentive Programs
The Compensation Committee views stock options, RSUs and other stock-based awards as an
important long-term incentive vehicle for the Companys executive officers. Stock-based awards
provide executives with the opportunity to share in the appreciation of the value of Osteotechs
common stock which the Compensation Committee believes would be due largely to the efforts of such
executives.
Our 2007 Stock Incentive Plan (the
2007 Stock Plan
) is a long-term plan designed to link
executive rewards with stockholder value over time. Executive officers are eligible to receive
stock-based awards pursuant to the 2007 Stock Plan. The number of awards granted to the Named
Executive Officers is based upon the individual performance of the executive officer and the
Compensation Committees assessment of the executive officers ability to contribute to the
enhancement of stockholder value in the future. No awards are made when an individuals
performance is unsatisfactory. Performance is evaluated by the Compensation Committee based on the
executives individual contribution to the long-term health and growth of the Company and the
Companys performance based on the factors discussed above. No fixed weighting or formula is
applied to corporate performance versus individual performance in determining stock-based awards.
Specifically, for the Chief Executive Officer and other Named Executive Officers, the Committee
does not apply a mathematical formula that relates financial and non-financial performance to the
number of stock-based awards.
As previously disclosed, each of the Named Executive Officers was granted performance-based
RSUs in December 2008. Each RSU represents a right to receive one share of common stock upon the
vesting of such unit. In order for the RSUs to vest, the Companys diluted earnings per share
(
EPS
) for 2009 needed to equal at least 75% of the specified EPS target as determined by the
Board. Because the Companys actual EPS for 2009 did not equal at least 75% of the specified EPS
target, the RSUs were forfeited by the Named Executive Officers. The number of performance-based
RSUs forfeited by each Named Executive Officer follows: for Mr. Owusu-Akyaw, 21,210 RSUs; for Mr.
Burroughs, 10,500 RSUs; for Mr. Wynalek, 10,500 RSUs; and for Mr. Honneffer, 10,500 RSUs.
As previously disclosed, payouts under the Management Performance Bonus Plan for 2008 equaled
12% of the target incentive opportunity for 2008. To provide additional incentive in 2009, build
ownership in the Company as a means of retention and reward for the successes with the new product
initiatives, the Compensation Committee determined to grant RSUs to each Named Executive Officer in
lieu of cash payouts under the Management Performance Bonus Plan for fiscal 2008. The number of
RSUs granted to each Named Executive Officer was determined by dividing the actual incentive award
earned for 2008 as set forth in the Non-Equity Incentive Plan Compensation column of the Summary
Compensation Table by the closing price of our common stock on March 23, 2009 of $3.38. The RSUs
were granted pursuant to the Amended and Restated 2000 Stock Plan (the
2000 Stock Plan
) and
vested in full on March 19, 2010.
In April 2010, the Compensation Committee awarded 30,300 RSUs to Mr. Owusu-Akyaw and 15,000
RSUs to each of the other Named Executive Officers. In determining the number of RSUs to grant to
the Named Executive Officers, the Compensation Committee considered the Named Executive Officers
individual performance levels, the number of shares available under the 2007 Stock Plan for future
equity awards and the current and future financial impact of the equity awards on the Companys
results of operations. Of the RSUs granted to each Named Executive Officer, 30% were time-based
and 70% were performance-based. The RSUs were granted under the terms of the 2007 Stock Plan. The
Compensation Committee decided to incorporate performance-based vesting terms into the RSU awards
in order to ensure the Named Executive Officers focus on Osteotechs short-term and long-term
financial results. The time-based RSUs will vest in four equal installments on April 29, 2011,
2012, 2013
and 2014. The performance-based RSUs will vest in their entirety on April 29, 2013, subject
to the satisfaction of a vesting condition linked to the Companys EPS for 2010. If actual EPS for
2010 is less than the EPS target (as determined by the Board), none of the RSUs will vest. For EPS
results between target and 175% of the specified EPS target, the RSUs will vest in proportion to
the level of EPS achieved, with a minimum vesting percentage of 100% and a maximum vesting
percentage of 150% of the total RSUs granted. Because these time-based and performance-based RSUs
were not granted to the Named Executive Officers during fiscal 2009, these RSUs granted to the
Named Executive Officers are not disclosed in the Grants of Plan-Based Awards table in this
Amendment No. 2.
8
Other Benefits
Named Executive Officers participate in various medical, dental, life, disability, defined
contribution (401(k)) and other benefit programs that are generally made available to all
employees.
Severance Arrangements
We have entered into employment agreements with each of the Named Executive Officers. The
employment agreements provide that, if a Named Executive Officer is terminated without cause, the
officer will be entitled to certain severance payments and benefits. We believe that companies
should provide reasonable severance benefits to executive officers to reflect the fact that it may
be difficult for executives to find comparable employment within a short period of time. We also
believe severance benefits are an important part of our overall compensation philosophy and are
needed in order to attract and retain highly qualified key executives and provide competitive total
compensation.
Change in Control Arrangements
We have entered into change in control agreements with each of the Named Executive Officers.
Under the change in control agreements, the Named Executive Officers may be entitled to receive
certain payments and benefits if there is a separation of service after a change in control. In
certain circumstances after a change in control, the benefits under the Named Executive Officers
employment agreement and change in control agreement are additive. The Compensation Committee
believes that it is important to protect the Named Executive Officers in the event of a change of
control. Further, it is the Compensation Committees belief that providing change of control
benefits should eliminate or reduce the reluctance of executive management to pursue potential
change of control transactions that may be in the best interests of stockholders. The change in
control agreements assure that Osteotech will have the continued dedication of these individuals as
executives notwithstanding the possibility, threat or occurrence of a change in control of
Osteotech. In order for the change in control benefits to apply there must be both a change of
control and a separation of service. Because the Named Executive Officer can voluntarily terminate
his or her employment for any reason after the 180th day following the change in control and still
receive benefits, the change in control agreements are deemed to contain a modified single
trigger. The Compensation Committee believes that the modified single trigger design is more
appropriate than the single trigger design as it prevents payments in the event of a change in
control where the executive continues to be employed by the Company.
More information regarding the terms of the employment and change in control agreements with
the Named Executive Officers is provided under Employment and Change in Control Agreements in
this Amendment No. 2.
Impact of Regulatory Requirements on Compensation
The Compensation Committee carefully considers the accounting, tax and financial consequences
of the executive compensation and benefit programs implemented by the Company. The 2007 Stock Plan
was designed to allow for tax-deductibility of stock options, stock appreciation rights and
performance-based stock awards under Section 162(m) of the Internal Revenue Code. The Compensation
Committee has been using a mix of time-based restricted stock units and performance-based
restricted stock units to better manage the pool of available shares under the 2007 Stock Plan, and
so extend the time period over which the shares approved would be consumed.
9
Under Section 162(m) of the Internal Revenue Code, the Company must meet specified
requirements related to the Companys performance and stockholder approval of certain compensation
arrangements in order for the Company to fully deduct compensation in excess of $1,000,000 paid to
any Named Executive Officer. The stockholders approved the 2000 Stock Plan at the 2000 Annual
Meeting of Stockholders and the 2007 Stock Plan at the 2007 Annual Meeting of Stockholders.
Therefore, compensation attributable to stock options, stock appreciation rights, performance-based
stock awards and certain other awards granted under the 2007 Stock Plan may be excluded from the
$1,000,000 cap under Section 162(m) as well.
The Compensation Committee intends to continue its practice of paying competitive compensation
consistent with the Companys philosophy to attract, retain and motivate executive officers to
manage the Companys business in the best interests of the Company and its stockholders. The
Compensation Committee, therefore, may choose to provide non-deductible compensation to the
Companys executive officers if it deems such compensation to be in the best interests of the
Company and its stockholders.
Summary Compensation Table
The following table sets forth information concerning compensation earned for services
rendered to the Company by the Chief Executive Officer (the
CEO
), the Chief Financial Officer
(the
CFO
) and the Companys other two executive officers who were serving as executive officers
at the end of 2009. Collectively, together with the CEO and CFO, these are the Named Executive
Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Plan
|
|
|
All Other
|
|
|
|
|
Name and
|
|
|
|
|
|
Salary
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
(1)
|
|
|
($)
(2)
|
|
|
($)
(3)
|
|
|
($)
|
|
|
Sam Owusu-Akyaw
|
|
|
2009
|
|
|
|
414,000
|
|
|
|
22,581
|
(5)
|
|
|
|
|
|
|
7,737
|
|
|
|
444,318
|
|
President and Chief
|
|
|
2008
|
|
|
|
400,000
|
|
|
|
69,690
|
(6)
|
|
|
24,000
|
|
|
|
7,487
|
|
|
|
501,177
|
|
Executive Officer
(4)
|
|
|
2007
|
|
|
|
370,000
|
|
|
|
1,444,650
|
(7)
|
|
|
172,975
|
|
|
|
7,487
|
|
|
|
1,995,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark H. Burroughs
|
|
|
2009
|
|
|
|
257,094
|
|
|
|
9,817
|
(5)
|
|
|
|
|
|
|
5,385
|
|
|
|
272,296
|
|
Executive Vice President,
|
|
|
2008
|
|
|
|
248,400
|
|
|
|
34,500
|
(6)
|
|
|
10,433
|
|
|
|
5,126
|
|
|
|
298,459
|
|
Chief Financial Officer
|
|
|
2007
|
|
|
|
240,000
|
|
|
|
452,106
|
(7)
|
|
|
78,540
|
|
|
|
5,081
|
|
|
|
775,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert W. Honneffer
|
|
|
2009
|
|
|
|
212,051
|
(8)
|
|
|
10,981
|
(5)(8)
|
|
|
|
|
|
|
5,983
|
|
|
|
229,015
|
|
Executive Vice President,
|
|
|
2008
|
|
|
|
204,880
|
|
|
|
34,500
|
(6)
|
|
|
8,605
|
|
|
|
5,733
|
|
|
|
253,718
|
|
Global Operations
|
|
|
2007
|
|
|
|
197,000
|
|
|
|
496,713
|
(7)
|
|
|
64,468
|
|
|
|
5,650
|
|
|
|
763,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert M. Wynalek
|
|
|
2009
|
|
|
|
273,954
|
(9)
|
|
|
14,189
|
(5)(9)
|
|
|
|
|
|
|
5,447
|
|
|
|
293,590
|
|
President, Domestic
|
|
|
2008
|
|
|
|
264,690
|
|
|
|
34,500
|
(6)
|
|
|
11,117
|
|
|
|
4,737
|
|
|
|
315,044
|
|
|
|
|
2007
|
|
|
|
255,000
|
|
|
|
455,721
|
(7)
|
|
|
83,449
|
|
|
|
4,530
|
|
|
|
798,700
|
|
|
|
|
(1)
|
|
The amounts in this column are calculated based on the number of RSUs awarded and the fair
market value of our common stock on the date the award was made.
|
|
(2)
|
|
The amounts in the Non-Equity Incentive Plan Compensation column represent the value of
payouts earned by the Named Executive Officers under the Management Performance Bonus Plan.
See Compensation Discussion and Analysis Components of the Compensation Package
Management Performance Bonus Plan. The amounts included in this column for fiscal 2008 were
awarded to the Named Executive Officers in the form of RSUs.
|
|
(3)
|
|
The amounts in the All Other Compensation column are more fully described in table under All
Other Compensation Supplemental below.
|
|
(4)
|
|
Mr. Owusu-Akyaws did not receive any additional compensation for his service on our Board
for any year presented.
|
10
|
|
|
(5)
|
|
We made time-based RSU awards to the Named Executive Officers on March 19, 2009 in lieu of
cash payments for the non-equity incentive plan compensation for 2008.
|
|
(6)
|
|
We made time-based and performance-based RSU awards to the Named Executive Officers on
December 18, 2008. The 2008 amounts in this table include the following target payout values
for each officers performance-based RSU award: (i) Mr. Owusu-Akyaw, $48,783; (ii) Mr.
Burroughs, $24,150; (iii) Mr. Honneffer, $24,150; and (iv) Mr. Wynalek, $24,150. The maximum
potential payout values for such performance-based RSU awards are as follows: (i) Mr.
Owusu-Akyaw, $73,175; (ii) Mr. Burroughs, $36,225; (iii) Mr. Honneffer, $36,225; and (iv) Mr.
Wynalek, $36,225.
|
|
(7)
|
|
We made time-based RSU awards to the Named Executive Officers as supplemental non-annual
grants on August 1, 2007 and August 16, 2007. We made time-based and performance-based RSU
awards to the Named Executive Officers as part of the annual long-term incentive award process
on December 20, 2007. The 2007 amounts in this table include the following target payout
values for each officers performance-based RSU award: (i) Mr. Owusu-Akyaw, $177,135; (ii) Mr.
Burroughs, $68,324; (iii) Mr. Honneffer, $75,915; and (iv) Mr. Wynalek, $70,854. The maximum
potential payout values for such performance-based RSU awards are as follows: (i) Mr.
Owusu-Akyaw, $265,703; (ii) Mr. Burroughs, $102,485; (iii) Mr. Honneffer, $113,873; and (iv)
Mr. Wynalek, $106,281.
|
|
(8)
|
|
The amount in the Salary column includes a salary increase of $7,171 approved for Mr.
Honneffer for fiscal 2009. Mr. Honneffer elected to receive 4,243 RSUs in lieu of cash
payments for the salary increase. The number of RSUs awarded to Mr. Honneffer was determined
by dividing his salary increase by $1.69, the closing price of our common stock on December
31, 2008. The RSUs were granted on January 13, 2009 and are disclosed in the Grants of
Plan-Based Awards in Last Fiscal Year table on page 12. The closing price of our common stock
on January 13, 2009 was $2.37. Because the value of our common stock increased from the date
the number of RSUs awarded to Mr. Honneffer was determined and the date the RSUs were granted
to Mr. Honneffer, the grant date fair value of the RSUs was higher than the amount of Mr.
Honneffers salary increase. In accordance with SEC rules, the $2,885 difference between the
grant date fair value of the RSUs awarded to Mr. Honneffer and the value of Mr. Honneffers
salary increase is reported in the Stock Awards column.
|
|
(9)
|
|
The amount in the Salary column includes a salary increase of $9,263 approved for Mr. Wynalek
for fiscal 2009. Mr. Wynalek elected to receive 5,481 RSUs in lieu of cash payments for the
salary increase. The number of RSUs awarded to Mr. Wynalek was determined by dividing his
salary increase by $1.69, the closing price of our common stock on December 31, 2008. The
RSUs were granted on January 13, 2009 and are disclosed in the Grants of Plan-Based Awards in
Last Fiscal Year table on page 12. The closing price of our common stock on January 13, 2009
was $2.37. Because the value of our common stock increased from the date the number of RSUs
awarded to Mr. Wynalek was determined and the date the RSUs were granted to Mr. Wynalek, the
grant date fair value of the RSUs was higher than the amount of Mr. Wynaleks salary increase.
In accordance with SEC rules, the $3,727 difference between the grant date fair value of the
RSUs awarded to Mr. Wynalek and the value of Mr. Wynaleks salary increase is reported in the
Stock Awards column.
|
All Other Compensation Supplemental
The table below sets forth other compensation information during 2009 for our Named Executive
Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matching
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
to
|
|
|
Life Insurance
|
|
|
Total All Other
|
|
|
|
401(k) Plan
|
|
|
Premiums
|
|
|
Compensation
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
Sam Owusu-Akyaw
|
|
|
4,125
|
|
|
|
3,612
|
|
|
|
7,737
|
|
Mark H. Burroughs
|
|
|
4,125
|
|
|
|
1,260
|
|
|
|
5,385
|
|
Robert M. Honneffer
|
|
|
4,125
|
|
|
|
1,858
|
|
|
|
5,983
|
|
Robert M. Wynalek
|
|
|
4,125
|
|
|
|
1,322
|
|
|
|
5,447
|
|
11
Grants of Plan-Based Awards in Last Fiscal Year
The following table sets forth information regarding cash awards made pursuant to our
Management Performance Bonus Plan and equity awards made pursuant to our 2000 Stock Plan during
2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
Grant Date
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Stock Awards
|
|
|
Fair Value of
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards
(1)
|
|
|
Number of Shares
|
|
|
Stock and
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
of Stock or Units
|
|
|
Option Awards
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sam Owusu-Akyaw
|
|
|
|
|
|
|
124,200
|
|
|
|
207,000
|
|
|
|
310,500
|
|
|
|
|
|
|
|
|
|
|
|
|
3/19/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,101
|
(3)
|
|
|
22,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark H. Burroughs
|
|
|
|
|
|
|
53,990
|
|
|
|
89,983
|
|
|
|
134,974
|
|
|
|
|
|
|
|
|
|
|
|
|
3/19/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,087
|
(3)
|
|
|
9,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert W. Honneffer
|
|
|
|
|
|
|
44,531
|
|
|
|
74,218
|
|
|
|
111,327
|
|
|
|
|
|
|
|
|
|
|
|
|
1/13/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,243
|
(4)
|
|
|
10,056
|
(4)
|
|
|
|
3/19/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,546
|
(3)
|
|
|
8,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert M. Wynalek
|
|
|
|
|
|
|
57,530
|
|
|
|
95,884
|
|
|
|
143,826
|
|
|
|
|
|
|
|
|
|
|
|
|
1/13/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,481
|
(4)
|
|
|
12,990
|
(4)
|
|
|
|
3/19/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,290
|
(3)
|
|
|
10,462
|
|
|
|
|
(1)
|
|
The actual amounts of the Non-Equity Incentive Plan Awards paid to our Named Executive
Officers are as reported in the Summary Compensation Table in the column entitled
Non-Equity Incentive Plan Compensation. For a description of the incentive program pursuant
to which these awards were made, please see Compensation Discussion and Analysis Components
of the Compensation Package Management Performance Bonus Plan.
|
|
(2)
|
|
The grant date fair value of RSUs awarded is based on the closing market price of our common
stock on the date of grant.
|
|
(3)
|
|
Consists of time-based RSUs that vest in their entirety on March 19, 2010.
|
|
(4)
|
|
Mr. Honneffer and Mr. Wynalek elected to receive time-based RSUs in lieu of a cash salary
increase for 2009. The number of RSUs awarded to Mr. Honneffer and Mr. Wynalek was determined
by dividing their salary increase by $1.69, the closing price of our common stock on
December 31, 2008. The RSUs were granted on January 13, 2009, at which time the closing price
of our common stock was $2.37. Because the value of our common stock increased from the date
the number of RSUs awarded was determined the value reported exceeds the salary increase.
|
12
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth the information with respect to the Named Executive Officers
concerning the outstanding equity securities held as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Shares or
|
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares or Units
|
|
|
Units of
|
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
Stock That
|
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
RSU
|
|
|
That Have Not
|
|
|
Have Not
|
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Grant
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
($)
|
|
|
Date
|
|
|
Date
|
|
|
(#)
|
|
|
($)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sam Owusu-Akyaw
|
|
|
100,000
|
|
|
|
6.44
|
|
|
|
7/02/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
4.00
|
|
|
|
8/17/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
5.35
|
|
|
|
12/16/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
|
|
|
4.48
|
|
|
|
12/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/16/07
|
|
|
|
40,000
|
(2)
|
|
|
128,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/20/07
|
|
|
|
5,250
|
(3)
|
|
|
16,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/18/08
|
|
|
|
6,818
|
(3)
|
|
|
21,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/19/09
|
|
|
|
7,101
|
(4)
|
|
|
22,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark H. Burroughs
|
|
|
25,000
|
|
|
|
5.28
|
|
|
|
11/01/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
5.48
|
|
|
|
12/13/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
8.90
|
|
|
|
8/02/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
7.96
|
|
|
|
12/18/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
5.35
|
|
|
|
12/16/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,250
|
|
|
|
4.48
|
|
|
|
12/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/16/07
|
|
|
|
11,900
|
(2)
|
|
|
38,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/20/07
|
|
|
|
2,025
|
(3)
|
|
|
6,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/18/08
|
|
|
|
3,375
|
(3)
|
|
|
10,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/19/09
|
|
|
|
3,087
|
(4)
|
|
|
9,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert W. Honneffer
|
|
|
25,000
|
|
|
|
3.93
|
|
|
|
9/27/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
5.35
|
|
|
|
12/16/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,250
|
|
|
|
4.48
|
|
|
|
12/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/16/07
|
|
|
|
13,033
|
(2)
|
|
|
41,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/20/07
|
|
|
|
2,250
|
(3)
|
|
|
7,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/18/08
|
|
|
|
3,375
|
(3)
|
|
|
10,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/19/09
|
|
|
|
2,546
|
(4)
|
|
|
8,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert M. Wynalek
|
|
|
50,000
|
|
|
|
3.93
|
|
|
|
9/27/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
5.35
|
|
|
|
12/16/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
4.48
|
|
|
|
12/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/16/07
|
|
|
|
11,900
|
(2)
|
|
|
38,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/20/07
|
|
|
|
2,100
|
(3)
|
|
|
6,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/18/08
|
|
|
|
3,375
|
(3)
|
|
|
10,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/19/09
|
|
|
|
3,290
|
(4)
|
|
|
10,528
|
|
|
|
|
(1)
|
|
Market value of RSU awards that have not vested is based on the closing market price of our
common stock at December 31, 2009 of $3.20 per share.
|
|
(2)
|
|
These RSUs vest at a rate of 33.33% each year beginning on the first anniversary of the grant
date.
|
|
(3)
|
|
These RSUs vest at a rate of 25% each year beginning on the first anniversary of the grant
date.
|
|
(4)
|
|
These RSUs vested in their entirety on March 19, 2010.
|
13
Stock Vested
The following table summarizes information with respect to RSU awards that vested during
fiscal 2009 for each of the Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized on
|
|
|
|
Acquired on Vesting
|
|
|
Vesting
|
|
Name
|
|
(#)
|
|
|
($)
(1)
|
|
Sam Owusu-Akyaw
|
|
|
74,897
|
|
|
|
345,344
|
|
Mark H. Burroughs
|
|
|
22,963
|
|
|
|
104,763
|
|
Robert W. Honneffer
|
|
|
29,301
|
|
|
|
130,589
|
|
Robert M. Wynalek
|
|
|
28,481
|
|
|
|
125,700
|
|
|
|
|
(1)
|
|
Value determined by multiplying the number of vested shares by the closing
market price of a share of Osteotechs common stock on the vesting date or on
the previous business day, in the event the vesting date is not a business
day.
|
Employment and Change in Control Agreements
Employment Agreements
Each of the Named Executive Officers has entered into an employment agreement with Osteotech.
The employment agreements with the Named Executive Officers have two year terms and are subject to
automatic renewal for additional two year terms, unless terminated at least three months prior to
the expiration of the current two year term. The employment agreements provide that, if a Named
Executive Officer is terminated without cause, he will be entitled to certain severance payments.
Mr. Owusu-Akyaw would be entitled to severance payments equal to 24 months of his base salary,
payable in monthly installments, and continuation of medical and dental benefits and life insurance
for the same 24 month period to the extent such benefits were being provided to him at the time of
termination. Messrs. Burroughs, Wynalek and Honneffer each would be entitled to severance payments
equal to 12 months of his base salary, payable in monthly installments, and continuation of medical
and dental benefits and life insurance for the same 12 month period to the extent such benefits
were being provided to him at the time of termination. In addition, Mr. Owusu-Akyaw would be
eligible for outplacement services for up to 24 months, as necessary, and Mr. Burroughs would be
eligible for outplacement services for up to 12 months, as necessary.
Change in Control Agreements
We have entered into change in control agreements with each of the Named Executive Officers.
Under the change in control agreements, a change in control is defined as:
|
|
|
a change in the Board such that a majority of the Board is made up of persons who were
neither nominated nor appointed by incumbent Directors;
|
|
|
|
the acquisition by any person of a majority of the outstanding voting securities of
Osteotech, except if such acquisition is effected by Osteotech itself, by an employee
benefit plan of Osteotech or pursuant to an offering by Osteotech of its voting securities;
|
|
|
|
a merger or consolidation of Osteotech with another company such that neither Osteotech
nor any of its subsidiaries will be the surviving entity;
|
14
|
|
|
a merger or consolidation of Osteotech following which Osteotech or a previous
subsidiary of Osteotech will be the surviving entity and a majority of the voting
securities of Osteotech will be owned by a person or persons who were not beneficial owners
of a majority of Osteotechs voting securities prior to such merger or consolidation;
|
|
|
|
a liquidation of Osteotech; or
|
|
|
|
a sale or disposition by Osteotech of at least 80% of its assets.
|
Under the change in control agreements, for one year after the occurrence of a change in
control, each executive will remain in Osteotechs employ in the same position he held before the
change in control and will be entitled to a base salary and benefits no less favorable than those
in effect for such executive immediately preceding the change in control. In addition, upon a
change in control, all unvested equity awards held by each executive will vest and become
exercisable immediately, notwithstanding anything to the contrary contained in the equity award
agreements or any plan covering such equity awards. If, however, the change in control arises from
a merger or consolidation in which neither Osteotech nor any of its subsidiaries is the surviving
entity or from the liquidation of Osteotech, each executive will be given a reasonable opportunity
to exercise such options prior to the change in control and any such options not so exercised will
terminate on the effective date of the change in control.
The agreements also provide that if, after a change in control, an executives employment is
terminated for any reason, the executive will be entitled to receive all then accrued pay,
benefits, executive compensation (as defined in these agreements) and fringe benefits, including
pro rata bonus and incentive plan earnings through the date of his termination plus the amount of
any compensation he previously deferred, in each case, to the extent theretofore unpaid. In
addition, unless the executives employment was terminated by the executive without good reason (as
defined below) on or prior to the 180th day after the change in control event or by Osteotech for
just cause (as defined in the agreement) on or prior to the 180th day after the change in control
event, the executive will receive (1) a payment equal to three times the sum of (a) his average
annual base salary plus (b) his average annual cash bonuses, for the five taxable years or
annualized portions thereof prior to the change in control event, plus interest, and (2) at
Osteotechs expense, medical, health and disability benefits comparable to those he received prior
to the change in control for a period of three years following his termination. Furthermore,
unless the executives employment was terminated (a) by the executive other than for good reason
prior to the 180th day following a change in control event, (b) by the executive voluntarily for
any reason after the 180th day following a change in control event or (c) by Osteotech for just
cause, the executive will also be entitled to (1) the balance of all pay, benefits, compensation
and fringe benefits including (but not limited to) pro rata salary, bonus and incentive plan
earnings payable through the first anniversary of the change in control event, and (2) an office
and reasonable secretarial and other services from Osteotech for one year from the date of his
termination. If the executives employment is terminated by Osteotech for any reason other than
just cause after a change in control, the benefits of the employment agreement and change in
control agreement are additive in determining the payments due to the executive. For purposes of
the change in control agreements, good reason includes:
|
|
|
the assignment to the executive of duties which are not substantially of equal status,
dignity and character as the duties performed immediately prior to the change in control,
or a substantial reduction in the nature or status of his responsibilities from those in
effect immediately prior to the change in control;
|
|
|
|
the failure of Osteotech to provide full compensation as contemplated by the change in
control agreement;
|
|
|
|
the relocation of the executives office to a location more than 15 miles from the
location of such office immediately prior to the change in control, or his being required
to travel to a substantially greater extent than required immediately prior to the change
in control in order to perform duties of substantially equal status, dignity and character
to those performed prior to the change in control;
|
|
|
|
the failure of a successor corporation to expressly assume and agree to perform
Osteotechs obligations under the change in control agreement, provided such successor has
received at least 20 days prior written notice of such obligations; and
|
|
|
|
the voluntary termination by the executive for any reason after the 180th day following
the change in control.
|
15
Potential Payments Upon Termination Without Cause or Certain Terminations After a Change in
Control
.
The following table shows potential payments to the Named Executive Officers upon
(1) termination without cause on December 31, 2009, (2) termination by the executive for good
reason after a change in control of Osteotech, assuming any such termination of employment occurred
on December 31, 2009, one day after such change in control and (3) termination by Osteotech after a
change in control of the Company, assuming any such termination of employment occurred on December
31, 2009, one day after such change in control. Because none of the Named Executive Officers has
stock options with an exercise price below the market value of our common stock on December 31,
2009, the table below assumes no outstanding stock options were exercised by the Named Executive
Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination For
|
|
|
Termination Without
|
|
|
|
|
|
Without Cause
|
|
|
Good Reason After
|
|
|
Cause After Change
|
|
|
|
|
|
Termination
|
|
|
Change in Control
|
|
|
in Control
|
|
Name
|
|
Description
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
Sam Owusu-Akyaw
|
|
Severance Amount
|
|
|
828,000
|
|
|
|
1,938,300
|
|
|
|
2,766,300
|
|
|
|
Value of Accelerated RSUs
(1)
|
|
|
|
|
|
|
189,300
|
|
|
|
189,300
|
|
|
|
Value of Benefits Continuation
|
|
|
57,800
|
|
|
|
83,600
|
|
|
|
95,600
|
|
|
|
Value of Outplacement Services
|
|
|
50,000
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
935,800
|
|
|
|
2,211,200
|
|
|
|
3,051,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark H. Burroughs
|
|
Severance Amount
|
|
|
257,100
|
|
|
|
1,135,500
|
|
|
|
1,392,600
|
|
|
|
Value of Accelerated RSUs
(1)
|
|
|
|
|
|
|
65,200
|
|
|
|
65,200
|
|
|
|
Value of Benefits Continuation
|
|
|
26,600
|
|
|
|
71,900
|
|
|
|
75,700
|
|
|
|
Value of Outplacement Services
|
|
|
25,000
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
308,700
|
|
|
|
1,272,600
|
|
|
|
1,533,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert W. Honneffer
|
|
Severance Amount
|
|
|
212,100
|
|
|
|
923,300
|
|
|
|
1,135,400
|
|
|
|
Value of Accelerated RSUs
(1)
|
|
|
|
|
|
|
67,900
|
|
|
|
67,900
|
|
|
|
Value of Benefits Continuation
|
|
|
25,800
|
|
|
|
68,500
|
|
|
|
71,500
|
|
|
|
Value of Outplacement Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
237,900
|
|
|
|
1,059,700
|
|
|
|
1,274,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert M. Wynalek
|
|
Severance Amount
|
|
|
274,000
|
|
|
|
1,217,700
|
|
|
|
1,491,700
|
|
|
|
Value of Accelerated RSUs
(1)
|
|
|
|
|
|
|
66,100
|
|
|
|
66,100
|
|
|
|
Value of Benefits Continuation
|
|
|
26,800
|
|
|
|
72,900
|
|
|
|
76,900
|
|
|
|
Value of Outplacement Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
300,800
|
|
|
|
1,356,700
|
|
|
|
1,634,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Value determined by multiplying the number of RSUs that vest by $3.20, the closing market
price of a share of our common stock on December 31, 2009, the last business day of the 2009
fiscal year.
|
16
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
with management. Based on this review and discussion, the Compensation Committee recommended to
the Board of Directors that the Compensation Discussion and Analysis be included in this Form
10-K/A filing.
|
|
|
|
|
MEMBERS OF THE COMPENSATION COMMITTEE
|
|
|
|
|
|
Robert J. Palmisano, Chairman
|
|
|
Stephen S. Galliker
|
|
|
James M. Shannon
|
Director Compensation
Under our director compensation policy, our non-employee directors are compensated as follows:
Members of the Board
. Each of our non-employee directors receives $15,000 per annum and an
annual equity grant of either an option to purchase 15,000 shares of our common stock or 5,000 RSUs
under one of our stock plans in consideration of the directors service on the Board. In 2009, the
director equity grant was 5,000 RSUs. Each non-employee director is entitled to receive $1,000 for
each Board meeting attended in excess of five meetings per year and reimbursement for travel and
related expenses incurred in connection with attendance at all meetings. During 2009, non-employee
directors did not receive any additional fees for their attendance at board meetings.
Chairperson of the Board
. In addition to the annual compensation for the non-employee
directors described above under Members of the Board, the Chairperson of the Board receives
$20,000 per annum in consideration of the additional duties and responsibilities required of the
Chairperson of the Board. The Chairperson of the Board receives no additional compensation for
serving as a member or chairperson of any Board committees.
Chairperson of our Board Committees
. In addition to the annual compensation for non-employee
directors described above under Members of the Board, the Chairperson of the Audit Committee
receives $10,000 per annum and the Chairperson of each of our other Board committees receives
$5,000 per annum in consideration of the additional duties and responsibilities required of a
Chairperson of a Board committee.
Non
-
Chairperson Members of the Board Committees
. In addition to the annual compensation for
the non-employee directors described above under Members of the Board, the members of each Board
committee who do not serve as the Chairperson of such committee receive $2,500 per annum for each
Board committee on which they serve in consideration of the additional duties and responsibilities
required of Board committee membership.
Non-employee directors may also receive additional compensation for work performed on special
projects requested by the Board of Directors, as approved in advance by the Compensation Committee.
Directors who also serve as our executive officers receive no additional compensation for serving
as a director. See Summary Compensation Table on page 10.
17
A summary of compensation paid to each of our non-employee directors during fiscal year 2009
is set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director Compensation in Last Fiscal Year
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Stock
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
|
|
in Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
(1)
|
|
|
($)
(2)
|
|
|
($)
(3)
|
|
|
($)
|
|
Kenneth P. Fallon, III
|
|
|
35,000
|
|
|
|
19,950
|
|
|
|
358,000
|
(4)
|
|
|
104,750
|
|
|
|
517,700
|
|
Stephen S. Galliker
|
|
|
27,500
|
|
|
|
19,950
|
|
|
|
|
|
|
|
|
|
|
|
47,450
|
|
Dr. Cato T. Laurencin
|
|
|
16,250
|
|
|
|
19,950
|
|
|
|
|
|
|
|
|
|
|
|
36,200
|
|
Robert J. Palmisano
|
|
|
25,000
|
|
|
|
19,950
|
|
|
|
|
|
|
|
|
|
|
|
44,950
|
|
James M. Shannon
|
|
|
21,250
|
|
|
|
19,950
|
|
|
|
|
|
|
|
|
|
|
|
41,200
|
|
|
|
|
(1)
|
|
The amounts in this column are calculated based on the fair market value of our common stock
on the date the grant was made in accordance with Finance Accounting Standards Board
Accounting Standards Codification Topic 718, Compensation Stock Compensation (
FASB ASC
Topic 718
). In 2009, each director received a grant of 5,000 RSUs with a grant date fair
value of $19,950. As of December 31, 2009, each director held 5,000 RSUs.
|
|
(2)
|
|
The directors held options as of December 31, 2009, as follows:
|
|
|
|
|
|
Name
|
|
Options
|
|
|
Mr. Fallon
|
|
|
178,750
|
|
Mr. Galliker
|
|
|
30,000
|
|
Dr. Laurencin
|
|
|
0
|
|
Mr. Palmisano
|
|
|
15,000
|
|
Mr. Shannon
|
|
|
0
|
|
(3)
|
|
Consists of $90,000 paid to Mr. Fallon for providing assistance to management on strategic
direction issues and for his work on special projects requested by the Board of Directors and
$14,750 of incremental cost to Osteotech for medical and dental benefits.
|
(4)
|
|
On July 1, 2009, Mr. Fallon was granted options to purchase 100,000 shares of our common
stock. In accordance with FASB ASC Topic 718, we chose the Black-Scholes option pricing model
to estimate the grant date fair value of the options set forth in this table. Our use of this
model should not be construed as an endorsement of its accuracy at valuing options. All stock
option valuation models, including the Black-Scholes model, require a prediction about the
future movement of the stock price. The following assumptions were made for purposes of
calculating the grant date fair value for the options: risk free rate: 3.38%; expected life:
8.5 years; volatility: 73.4%; and dividend yield: 0%; resulting in a grant date fair value of
$3.58 per share.
|
Compensation Committee Interlocks and Insider Participation
During 2009, Messrs. Palmisano (Chairman), Galliker and Shannon and Dr. Laurencin served as
members of the Compensation Committee of our Board of Directors. Dr. Laurencin served on the
Compensation Committee until June 18, 2009, at which time Mr. Fallon was appointed to serve as a
member of the Compensation Committee. None of these individuals has ever served as an officer or
employee of Osteotech or has any relationships with Osteotech requiring disclosure under Related
Person Transactions below, except as disclosed for Dr. Laurencin in
Item 13 below. The members of the Compensation Committee of our Board of Directors have no
interlocking relationships requiring disclosure under the rules of the SEC.
18
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
Equity Compensation Plan Information
We have three stock option plans, all of which have been approved by our shareholders. One of
the plans, the 1991 Independent Directors Stock Option Plan, does not have any shares available to
grant new options and all shares underlying outstanding options that expire or are forfeited prior
to exercise are not available for future option grants under this plan. See Note 15 of Notes to
Consolidated Financial Statements in the Original Form 10-K. The following table sets forth
certain information relative to our stock option plans as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
|
|
|
|
|
remaining available
|
|
|
|
|
|
|
|
|
|
|
|
for future issuance
|
|
|
|
Number of securities to
|
|
|
Weighted-average exercise
|
|
|
under equity
|
|
|
|
be issued upon exercise of
|
|
|
price of outstanding
|
|
|
compensation plans
|
|
|
|
outstanding options,
|
|
|
options, warrants and
|
|
|
(excluding securities
|
|
Plan Category
|
|
warrants and rights
|
|
|
rights
|
|
|
reflected in column (a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Equity compensation
plans approved by
security holders
|
|
|
1,821,095
|
|
|
$
|
4.60
|
(1)
|
|
|
1,111,072
|
|
Equity compensation
plans not approved
by security holders
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,821,095
|
|
|
$
|
4.60
|
|
|
|
1,111,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The weighted-average exercise price was determined based on the exercise price related to
each outstanding stock option and an exercise price of zero for each restricted stock unit
award.
|
|
(2)
|
|
We do not have any equity compensation plans which have not been approved by our security
holders.
|
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding ownership of our common stock as of March
31, 2010 or earlier date for information based on filings with the SEC by each person known to us
to own more than 5% of our outstanding shares of common stock. The information in this table is
based solely on statements in filings with the SEC or other reliable information supplied to us by
our directors, officers and principal stockholders.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
|
|
Nature of
|
|
|
|
|
Name and Address of Beneficial Owner or
|
|
Beneficial
|
|
|
Percent
|
|
Identity of Group
|
|
Ownership
(1)
|
|
|
of Class
(2)
|
|
|
Joint Filing comprised of:
|
|
|
4,358,065
|
(3)
|
|
|
24.1
|
%
|
Boston Avenue Capital LLC, Spencer
Capital Opportunity Fund, LP,
Heartland Advisors, Inc., their
Respective
Affiliates and Michael J.
McConnell
789 North Water Street, Suite 500
Milwaukee, Wisconsin 53202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors LP
|
|
|
1,490,633
|
(4)
|
|
|
8.2
|
%
|
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
|
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
40 East 52nd Street
New York, New York 10022
|
|
|
953,958
|
(5)
|
|
|
5.3
|
%
|
|
|
|
|
|
|
|
|
|
Joint filing comprised of:
|
|
|
953,057
|
(6)
|
|
|
5.2
|
%
|
John F. White, James F. Rice, Kenneth
L. Wolfe, Foster L. Aborn and Kairos
Partners III Limited Partnership
600 Longwater Drive, Suite 204
Norwell, Massachusetts 02061
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Beneficial ownership of shares is determined in accordance with the rules of the SEC and
generally includes any shares over which a person exercises sole or shared voting or
investment power, or of which a person has the right to acquire ownership within 60 days after
March 31, 2010. Except as otherwise noted, each person or entity has sole voting and
investment power with respect to the shares shown, and such shares are not subject to any
pledge.
|
19
|
|
|
(2)
|
|
The percentage of stock outstanding for each stockholder is calculated by dividing (i) the
number of shares deemed to be beneficially held by such stockholder as of March 31, 2010 by
(ii) the sum of (A) the number of shares of common stock outstanding as of March 31, 2010 plus
(B) the number of shares issuable upon exercise of options held by such stockholder which were
exercisable as of March 31, 2010 or which will become exercisable within 60 days after
March 31, 2010.
|
|
(3)
|
|
The information set forth with respect to Boston Avenue Capital, LLC (
BAC
), Mr. Stephen J.
Heyman, Mr. James F. Adelson, Mr. Charles M. Gillman, Spencer Capital Opportunity Fund, LP
(
SCF
), Dr. Kenneth H. Subin Stein, Heartland Advisors, Inc., Mr. William J. Nasgovitz and
Michael J. McConnell is based on information contained in a statement on Schedule 13D jointly
filed with the SEC on March 26, 2010. The Heartland Value Fund, a series of the Heartland
Group, Inc., a registered investment company, owns 1,502,236 of the shares on behalf of
private investment advisory clients. Heartland Advisors, Inc., a federally registered
investment advisor, provides investment advisory services to the Heartland Group Inc. The
shares may be deemed beneficially owned within the meaning of Rule 13d 3 of the Exchange Act
by (1) Heartland Advisors, Inc. by virtue of its investment discretion and voting authority
granted by certain clients, which may be revoked at any time; and (2) William J. Nasgovitz, as
a result of his ownership interest in Heartland Advisors, Inc. Heartland Advisors, Inc. and
Mr. Nasgovitz each have shared voting power over 2,790,053 shares and shared investment power
over 3,263,263 shares. Mr. Nasgovitz specifically disclaims beneficial ownership of such
shares. BAC owns and has sole direct voting and dispositive power over 558,119 shares.
Messrs. Heyman and Adelson are joint managers of BAC and Mr. Gillman is portfolio manager for
BAC. As joint managers of BAC, Messrs. Heyman and Adelson may each exercise voting and
dispositive power over the shares of Common Stock held by BAC. As portfolio manager for BAC,
Mr. Gillman may also exercise voting and dispositive power over the shares of Common Stock
held by BAC. As a result, Messrs. Heyman, Adelson and Gillman may each be deemed to be
indirect beneficial owners of shares of Common Stock held by BAC. The principal business
address of BAC and Messrs. Heyman and Adelson is 15 East 5th Street, Suite 3200, Tulsa,
Oklahoma 74102. Mr. Gillmans address is 15 East 5th Street, Suite 2660, Tulsa, Oklahoma
74102. Mr. McConnell owns and has sole direct voting and dispositive power over 6,000 shares.
Mr. McConnells business address is P.O. Box 6280, Newport Beach, California 92658. SCF has
sole voting power and investment power over 530,683 shares. Spencer Capital Partners, LLC
(
SCP
), an investment advisor, is a general partner of SCF and Spencer Capital Management,
LLC (
SCM
) is an investment advisor to SCF (SCF, SCP and SCM, collectively are referred to as
the Spencer Entities). Dr. Stein is the managing member of SCP and SCM. As investment
advisor to SCF, SCM may exercise voting and dispositive power over shares of Common Stock held
by SCF. As general partner of SCF, SCP may also exercise voting and dispositive power over
shares of Common Stock held by SCF. In addition, because he is the managing member of SCP and
the portfolio manager of SCM, Dr. Shubin Stein may also exercise voting and dispositive power
over shares of Common Stock held by SCF. As a result,
SCP, SCM and Dr. Shubin Stein may each be deemed to be indirect beneficial owners of shares of
Common Stock held by SCF. The principal business address of Dr. Stein and the Spencer Entities
is 12 East 49th Street, 32nd Floor, New York, New York 10017. BAC, Mr. Gillman, Heartland, Mr.
Nasgovitz, the Spencer Entities, Dr. Stein and Mr. McConnell are members of a group for purposes
of Section 13(d)(3) of the Exchange Act. Each reporting person disclaims beneficial ownership
of any shares, other than those shares for which such reporting person may exercise direct
voting or dispositive power.
|
20
|
|
|
(4)
|
|
The information set forth with respect to Dimensional Fund Advisors LP (formerly Dimensional
Fund Advisors Inc.) is based on information contained in a statement on Schedule 13G/A jointly
filed with the SEC on February 8, 2010. Dimensional, an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four
investment companies registered under the Investment Company Act of 1940, and serves as
investment manager to certain other commingled group trusts and separate accounts. These
investment companies, trusts and accounts are the Funds. In its role as investment advisor
or manager, Dimensional possesses investment and/or voting power over the securities of the
Company described in the Schedule 13G/A that are owned by the Funds, and may be deemed to be
the beneficial owner of the shares of the Company held by the Funds. However, all securities
reported in the Schedule 13G/A are owned by the Funds. Dimensional disclaims beneficial
ownership of such securities. In addition, the filing of the Schedule 13G/A shall not be
construed as an admission that the reporting person or any of its affiliates is the beneficial
owner of any securities covered by the Schedule 13G/A for any other purposes than Section
13(d) of the Exchange Act.
|
|
(5)
|
|
The information set forth with respect to BlackRock Inc. (
BlackRock
) is based on
information contained in a statement on Schedule 13G filed with the SEC on January 29, 2010.
BlackRock is a parent holding company or control person and has sole investment discretion and
sole voting power over all such shares.
|
|
(6)
|
|
The information set forth with respect to the Kairos Partners group is based on information
contained in a statement on Schedule 13D/A filed with the SEC on February 4, 2010. Shares
reported therein as beneficially owned by Messrs. White, Rice, Wolfe and Aborn represent
shares held by Kairos Partners II Limited Partnership and Kairos Partners III Limited
Partnership (collectively, the
Kairos Partnerships
). Each of Messrs. White, Rice, Wolfe and
Aborn is a member of the investment committee of the Kairos Partnerships. Such committee has
shared voting and investment power over such shares. The reporting persons disclaim any
admission that they constitute a group, as such term is used in Section 13(d)(3) of the
Exchange Act. The chairman of the Board, Kenneth P. Fallon, III, is an Associate with Kairos
Partners.
|
The following table sets forth information regarding ownership of our common stock as of
March 31, 2010 by (a) each director and director nominee, (b) each of the executive officers named
in the Summary Compensation Table in this Amendment No. 2 and (c) all directors and executive
officers as a group.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
|
|
Nature of
|
|
|
Percent of
|
|
|
|
Beneficial
|
|
|
Shares
|
|
Name of Beneficial Owner
|
|
Ownership
(1)(2)
|
|
|
Outstanding
(3)
|
|
Kenneth P. Fallon, III
|
|
|
120,250
|
|
|
|
*
|
|
Sam Owusu-Akyaw
|
|
|
329,766
|
|
|
|
1.8
|
%
|
Stephen S. Galliker
|
|
|
45,000
|
|
|
|
*
|
|
Dr. Cato T. Laurencin
|
|
|
5,000
|
|
|
|
*
|
|
Robert J. Palmisano
|
|
|
30,000
|
|
|
|
*
|
|
James M. Shannon
|
|
|
10,000
|
|
|
|
*
|
|
Mark H. Burroughs
|
|
|
146,009
|
|
|
|
*
|
|
Robert W. Honneffer
|
|
|
81,498
|
|
|
|
*
|
|
Robert M. Wynalek
|
|
|
110,149
|
|
|
|
*
|
|
All executive officers
and directors as a
group (9
persons)
(4)
|
|
|
877,672
|
|
|
|
4.7
|
%
|
|
|
|
*
|
|
Represents less than 1% of our outstanding common stock.
|
|
(1)
|
|
Beneficial ownership of shares is determined in accordance with the rules of the SEC and
generally includes any shares over which a person exercises sole or shared voting or
investment power, or of which a person has the right to acquire ownership as of March 31, 2010
or within 60 days after March 31, 2010. Except as otherwise noted, each person or entity has
sole voting and investment power with respect to the shares shown and such shares are not
subject to any pledge. Includes shares of common stock purchased by executive officers
pursuant to our Employee Stock Purchase Plan through December 31, 2009.
|
21
|
|
|
(2)
|
|
Includes the following shares underlying options which are currently exercisable or which
will become exercisable within 60 days after March 31, 2010.
|
|
|
|
|
|
Name
|
|
Shares
|
|
Mr. Fallon
|
|
|
78,750
|
|
Mr. Owusu-Akyaw
|
|
|
215,000
|
|
Mr. Galliker
|
|
|
30,000
|
|
Dr. Laurencin
|
|
|
|
|
Mr. Palmisano
|
|
|
15,000
|
|
Mr. Shannon
|
|
|
|
|
Mr. Burroughs
|
|
|
105,250
|
|
Mr. Honneffer
|
|
|
38,250
|
|
Mr. Wynalek
|
|
|
74,000
|
|
|
|
|
(3)
|
|
The percentage of stock outstanding for each stockholder is calculated by dividing (i) the
number of shares deemed to be beneficially held by such stockholder as of March 31, 2010 by
(ii) the sum of (A) the number of shares of common stock outstanding as of March 31, 2010 plus
(B) the number of shares issuable upon exercise of options held by such stockholder which were
exercisable as of March 31, 2010 or which will become exercisable within 60 days after
March 31, 2010.
|
|
(4)
|
|
Includes 556,250 shares underlying options which are currently exercisable or which will
become exercisable within 60 days after March 31, 2010.
|
Change in Control
On March 19, 2010, Spencer Capital Opportunity Fund, LP (the
Stockholder
) for and on its own
behalf and on behalf of the Committee for Concerned Osteotech, Inc. Stockholders (comprising
Heartland Advisors, Inc., Spencer Capital Opportunity Fund, LP, Spencer Capital Management, LLC,
Spencer Capital Partners, LLC and Boston Avenue Capital LLC, the
Committee
) delivered to our
Corporate Secretary a notice regarding certain proposals that the Stockholder intends to submit for
consideration at our 2010 annual meeting of stockholders, including the Stockholders nomination of
Gary L. Alexander, Michelle Rachael Forrest, Michael J. McConnell and Kenneth H. Shubin Stein,
M.D., CFA for election to our Board of Directors. On April 7, 2010, the Committee filed a
preliminary proxy statement regarding the same with the SEC, as revised by a revised preliminary
proxy statement filed by the Committee with the SEC on April 16, 2010.
Item 13. Certain Relationship and Related Transactions, and Director Independence.
It is our policy, as set forth in our corporate governance guidelines, not to enter into any
related party transaction (defined consistent with SEC Regulation S-K, Item 404) unless the Audit
Committee or a comparable independent body of the Board reviews and approves such transaction. We
annually require each of our directors and executive officers to complete a director and officer
questionnaire that elicits information about related person transactions, including any such
transactions which are required to be disclosed under the rules of the SEC. No member of the Audit
Committee or comparable body shall participate in the review or approval of any related party
transaction or any material amendment thereto where that member is a related party in that
transaction. In reviewing and approving any related party transaction or any material amendment
thereto, the Audit Committee or comparable body shall satisfy itself that it has been fully
informed as to the related partys relationship and interest and as to the material facts of the
proposed related party transaction or material amendment, and shall determine that the related
party transaction or material amendment thereto is fair to the Company.
22
In March 2010, we entered into a consulting agreement with Laurencin Orthopaedic Associations
for the consulting services of Dr. Laurencin, who is one of our directors. Pursuant to the terms
of the consulting agreement, we will pay Dr. Laurencin $4,000 per day for Dr. Laurencins
consulting services and will pay Dr. Laurencin a royalty payment in connection with our sale of
certain products that are invented solely or jointly by Dr. Laurencin and are developed and
commercialized using Dr. Laurencins services. The consulting agreement has an initial term of two
years and may be renewed by us thereafter in our sole discretion. In accordance with the related
party transaction review and approval standards described in the preceding paragraph, our Audit
Committee reviewed and approved the consulting agreement with Dr. Laurencin on March 30, 2010.
The Board has determined that Messrs. Fallon, Galliker, Palmisano and Shannon are independent
under applicable NASDAQ rules. Under applicable SEC and NASDAQ rules, the existence of certain
related party transactions above certain thresholds between a director and the Company are
required to be disclosed and preclude a finding by the Board that the director is independent. In
addition to transactions required to be disclosed under SEC rules, the Board considered certain
other relationships in making its independence determinations, including Mr. Fallons relationship
with Kairos Partners, a shareholder owning 5.2% of our common stock, and determined in each case
that such other relationships did not impair the directors ability to exercise independent
judgment on behalf of the Company. Dr. Laurencin was independent under applicable NASDAQ rules
before our entry into the consulting agreement described in the preceding paragraph, but is no
longer independent under applicable NASDAQ rules by virtue of his consulting arrangement with us.
Item 14. Principal Accountant Fees and Services.
Pre Approval Policy
In accordance with the requirements of the Sarbanes-Oxley Act and the Audit Committee Charter,
all audit and audit-related work and all non-audit work performed by our independent registered
public accounting firm must be submitted to the Audit Committee for specific approval in advance,
including the proposed fees for such work, and all fees listed below were approved by the Audit
Committee. The Audit Committee has not delegated any of its responsibilities to management except
that the Audit Committee delegated to the Chief Financial Officer the authority to approve tax
related activities as long as the independent registered public accounting firm states that the
services do not impair independence, have fees of $10,000 or less per project and do not exceed
$50,000 in the aggregate for all projects in any one year.
Audit Fees
Audit fees billed or expected to be billed to us by BDO Seidman for the audits of our
consolidated financial statements for the years ended December 31, 2009 and 2008 included in our
Annual Report on Form 10-K, the Sarbanes-Oxley Act Section 404 internal control audits as of
December 31, 2009 and 2008, the statutory audits for our foreign subsidiaries and reviews of our
consolidated financial statements included in our Quarterly Reports on Form 10-Q for 2009 and 2008
totaled $640,861 and $704,855 for 2009 and 2008, respectively.
Audit-related Fees
The aggregate fees billed to us by BDO Seidman for audit-related services, primarily related
to the audit of our employee benefit plan, for each of the years ended December 31, 2009 and 2008,
were $17,000.
Tax Fees
No fees were billed to us by BDO Seidman for tax services for the years ended December 31,
2009 and 2008.
All Other Fees
No other fees were billed to us by BDO Seidman for services for the years ended December 31,
2009 and 2008.
23
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a)(1) and (2)
. The response to this portion of Item 15 is included in the Original Form 10-K.
(a)(3) and (b)
. Exhibits (numbered in accordance with Item 601 of Regulation S-K).
|
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
|
|
3.1
|
|
|
Restated Certificate of Incorporation of Osteotech, as
amended (incorporated by reference to Exhibit 3.1 to
Registrants Annual Report on Form 10-K, filed on March
27, 2002)
|
|
*
|
|
|
|
|
|
|
|
|
3.2
|
|
|
Fifth Amended and Restated Bylaws of Osteotech
(incorporated by reference to Exhibit 3.1 to Registrants
Current Report on Form 8-K, filed on November 7, 2007)
|
|
*
|
|
|
|
|
|
|
|
|
3.3
|
|
|
Form of Stock Certificate (incorporated by reference to
Exhibit 3.4 to Registrants Registration Statement on
Form S-1 (File No. 33-40463), filed on June 14, 1991)
|
|
*
|
|
|
|
|
|
|
|
|
3.4
|
|
|
Certificate of Retirement and Prohibition or Reissuance
of Shares of Osteotech, Inc. dated April 4, 2002
(incorporated by reference to Exhibit 3.4 to Registrants
Quarterly Report on Form 10-Q, filed on August 9, 2002)
|
|
*
|
|
|
|
|
|
|
|
|
3.5
|
|
|
Certificate of Designation of Series E Junior
Participating Preferred Stock of Osteotech, Inc.
(incorporated by reference to Exhibit 3.1 to Registrants
Current Report on Form 8-K, filed on January 22, 2010)
|
|
*
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Rights Agreement, dated as of January 22, 2010, between
Osteotech, Inc. and Registrar and Transfer Company
(incorporated by reference to Exhibit 4.1 to Registrants
Current Report on Form 8-K, filed on January 22, 2010)
|
|
*
|
|
|
|
|
|
|
|
|
10.2
|
|
|
1991 Independent Directors Stock Option Plan, as amended
(incorporated by reference to Exhibit 10.1 to
Registrants Registration Statement on Form S-8 (File No.
333-145438), filed on August 14, 2007) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.3
|
|
|
Form of Confidentiality Agreement and Non-Competition
Agreement with executive officers (incorporated by
reference to Exhibit 10.10 to Registrants Annual Report
on Form 10-K, filed on March 27, 2002)
|
|
*
|
|
|
|
|
|
|
|
|
10.6
|
|
|
Amended and Restated 2000 Stock Plan (incorporated by
reference to Exhibit 10.41 to Registrants Quarterly
Report on Form 10-Q, filed on August 14, 2003) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.7
|
|
|
Second Amended and Restated Processing Agreement by and
among Musculoskeletal Transplant Foundation, Inc.,
Biocon, Inc., and Osteotech, Inc. dated as of June 1,
2002 (incorporated by reference to Exhibit 10.57 to
Registrants Quarterly Report on Form 10-Q, filed on
August 9, 2002)
|
|
*
|
|
|
|
|
|
|
|
|
10.8
|
|
|
Settlement Agreement and Release by and among Osteotech,
Inc. and Osteotech Investment Corporation, the
Musculoskeletal Transplant Foundation, Inc., and Synthes
Spine Company, L.P., dated as of June 1, 2002
(incorporated by reference to Exhibit 10.56 to
Registrants Quarterly Report on Form 10-Q, filed on
August 9, 2002)
|
|
*
|
24
|
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
|
|
10.9
|
|
|
License Agreement by and among Osteotech, Inc., Osteotech
Investment Corporation, Musculoskeletal Transplant
Foundation, Inc., Biocon, Inc., and Synthes Spine
Company, L.P., dated as of June 1, 2002 (incorporated by
reference to Exhibit 10.58 to Registrants Quarterly
Report on Form 10-Q, filed on August 9, 2002)
|
|
*
|
|
|
|
|
|
|
|
|
10.10
|
|
|
Form of Change in Control Agreement with Executive
Officers (incorporated by reference to Exhibit 10.61 to
Registrants Quarterly Report on Form 10-Q, filed on
November 14, 2002) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.11
|
|
|
Lease for Osteotechs Eatontown administration facility
(incorporated by reference to Exhibit 10.30 to
Registrants Annual Report on Form 10-K, filed on March
30, 1995)
|
|
*
|
|
|
|
|
|
|
|
|
10.12
|
|
|
First Modification to Lease for Osteotechs Eatontown
administration facility (incorporated by reference to
Exhibit 10.45 to Registrants Annual Report on Form 10-K,
filed on March 15, 2004)
|
|
*
|
|
|
|
|
|
|
|
|
10.13
|
|
|
Employment Agreement with Sam Owusu-Akyaw dated July 2,
2004 (incorporated by reference to Exhibit 10.48 to
Registrants Quarterly Report on Form 10-Q, filed on
November 8, 2004) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.15
|
|
|
Processing Agreement between Musculoskeletal Transplant
Foundation, Inc., Biocon, Inc. and Osteotech, Inc. dated
December 22, 2004 (incorporated by reference to Exhibit
10.51 to Registrants Annual Report on Form 10-K, filed
on March 29, 2005)
|
|
*
|
|
|
|
|
|
|
|
|
10.16
|
|
|
Form of Nontransferable Incentive Stock Option Agreement
for all incentive option grants, including option grants
to Members of the Board of Directors and Executive
Officers pursuant to Osteotechs 2000 Stock Plan
(incorporated by reference to Exhibit 10.52 to
Registrants Annual Report on Form 10-K, filed on March
29, 2005) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.17
|
|
|
Form of Nontransferable Non-Incentive Stock Option
Agreement for all non-incentive option grants, including
option grants to Members of the Board of Directors and
Executive Officers pursuant to Osteotechs 2000 Stock
Plan (incorporated by reference to Exhibit 10.53 to
Registrants Annual Report on Form 10-K, filed on March
29, 2005) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.22
|
|
|
Form of Nontransferable Non-Incentive Stock Option
Agreement pursuant to the 2000 Stock Plan and Form of
Amendment thereto (incorporated by reference to Exhibit
10.59 to Registrants Quarterly Report on Form 10-Q,
filed on November 9, 2005) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.26
|
|
|
Agreement of Lease between 201 Industrial Way, Inc. and
Osteotech, Inc., dated August 5, 2005, regarding the
Companys principal processing facility (incorporated by
reference to Exhibit 10.63 to Registrants Quarterly
Report on Form 10-Q, filed on November 9, 2005)
|
|
*
|
|
|
|
|
|
|
|
|
10.27
|
|
|
Employment Agreement, effective as of November 1, 2000,
between Osteotech, Inc. and Mark H. Burroughs
(incorporated by reference to Exhibit 10.64 to
Registrants Quarterly Report on Form 10-Q, filed on
November 9, 2005) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.32
|
|
|
Amendment No. 1, effective as of January 1, 2006, to
Employment Agreement, effective as of November 1, 2000,
between Osteotech, Inc. and Mark H. Burroughs
(incorporated by reference to Exhibit 10.61 to
Registrants Annual Report on Form 10-K filed on March
31, 2006) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.33
|
|
|
Amendment No. 1, effective as of January 1, 2006, to
Employment Agreement, dated July 2, 2004, between
Osteotech, Inc. and Sam Owusu-Akyaw (incorporated by
reference to Exhibit 10.62 to Registrants Annual Report
on Form 10-K filed on March 31, 2006) ^
|
|
*
|
25
|
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
|
|
10.34
|
|
|
Employment Agreement, effective as of September 27, 2004,
between Osteotech, Inc. and Robert Wynalek (incorporated
by reference to exhibit 10.64 to Registrants Quarterly
Report on Form 10-Q filed on May 10, 2006) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.35
|
|
|
Form of Indemnity Agreement executed by Officers and
Directors of Osteotech, Inc. (incorporated by reference
to Exhibit 10.54 to Registrants Current Report on Form
8-K filed on April 9, 2002) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.36
|
|
|
Form of 2000 Stock Plan Restricted Stock Unit Agreement
for Employees (incorporated by reference to Exhibit 10.66
to registrants Quarterly Report on Form 10-Q filed on
August 4, 2006) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.37
|
|
|
Form of 2000 Stock Plan Restricted Stock Unit Agreement
for Independent Directors (incorporated by reference to
Exhibit 10.67 to Registrants Quarterly Report on Form
10-Q filed on August 4, 2006) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.38
|
|
|
Form of 2000 Stock Plan Restricted Stock Unit Agreement
For Consultants (incorporated by reference to Exhibit
10.68 to Registrants Quarterly Report on Form 10-Q filed
on August 4, 2006) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.39
|
|
|
The Management Performance Bonus Plan, June 2006
(incorporated by reference to Exhibit 10.69 to
Registrants Quarterly Report on Form 10-Q filed on
August 4, 2006) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.40
|
|
|
Form of 2000 Stock Plan Nontransferable Incentive Stock
Option Agreement as of October 26, 2006 (incorporated by
reference to Exhibit 10.49 to Registrants Annual Report
on Form 10-K filed on March 14, 2007) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.41
|
|
|
Form of 2000 Stock Plan Nontransferable Non-Incentive
Stock Option Agreement as of October 26, 2006
(incorporated by reference to Exhibit 10.50 to
Registrants Annual Report on Form 10-K filed on March
14, 2007) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.45
|
|
|
Employment Agreement, dated September 27, 2004, between
the Company and Robert Honneffer (incorporated by
reference to Exhibit 10.4 to Registrants Quarterly
Report on Form 10-Q filed on May 10, 2007) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.46
|
|
|
Second Amendment to Tissue Recovery Agreement between the
Company and Community Blood Center dated May 14, 2007
(incorporated by reference to Exhibit 10.1 to
Registrants Quarterly Report on Form 10-Q filed on
August 6, 2007)
|
|
*
|
|
|
|
|
|
|
|
|
10.47
|
|
|
Third Amendment to Tissue recovery Agreement between the
Company and Community Blood Center dated May 14, 2007
(incorporated by reference to Exhibit 10.2 to
Registrants Quarterly Report on Form 10-Q filed on
August 6, 2007)
|
|
*
|
|
|
|
|
|
|
|
|
10.48
|
|
|
Fourth Amendment to Tissue Recovery Agreement between the
Company and Community Blood Center dated June 1, 2007
(incorporated by reference to Exhibit 10.3 to
Registrants Quarterly Report on Form 10-Q filed on
August 6, 2007)
|
|
*
|
|
|
|
|
|
|
|
|
10.49
|
|
|
2007 Stock Incentive Plan (incorporated by reference to
Exhibit 10.1 to Registrants Registration Statement on
Form S-8 (File No. 333-145501), filed on August 16, 2007)
^
|
|
*
|
|
|
|
|
|
|
|
|
10.50
|
|
|
Form of 2007 Stock Incentive Plan Restricted Stock Unit
Agreement for Employees (incorporated by reference to
Exhibit 10.1 to Registrants Quarterly Report on Form
10-Q filed on November 6, 2007) ^
|
|
*
|
26
|
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
|
|
10.51
|
|
|
Form of 2007 Stock Incentive Plan Performance-Based
Restricted Stock Unit Agreement for Employees ^
|
|
*
|
|
|
|
|
|
|
|
|
10.53
|
|
|
Amendment No. 2 to Employment Agreement, effective as of
December 31, 2008, between Osteotech, Inc. and Mark H.
Burroughs (incorporated by reference to Exhibit 10.1 to
Registrants Current Report on Form 8-K, filed January 7,
2009) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.54
|
|
|
Amendment No. 1 to Employment Agreement, effective as of
December 31, 2008, between Osteotech, Inc. and Robert
Honneffer (incorporated by reference to Exhibit 10.2 to
Registrants Current Report on Form 8-K, filed January 7,
2009) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.55
|
|
|
Amendment No. 2 to Employment Agreement, effective as of
December 31, 2008, between Osteotech, Inc. and Sam
Owusu-Akyaw (incorporated by reference to Exhibit 10.3 to
Registrants Current Report on Form 8-K, filed January 7,
2009) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.56
|
|
|
Amendment No. 1 to Employment Agreement, effective as of
December 31, 2008, between Osteotech, Inc. and Robert
Wynalek (incorporated by reference to Exhibit 10.4 to
Registrants Current Report on Form 8-K, filed January 7,
2009) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.57
|
|
|
Form of Amendment No. 1 to Change in Control Agreement,
effective as of December 31, 2008, between Osteotech,
Inc. and its Executive Officers (incorporated by
reference to Exhibit 10.5 to Registrants Current Report
on Form 8-K, filed January 7, 2009) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.58
|
|
|
Nontransferable Independent Director Stock Option
Agreement, dated July 1, 2009, between the Company and
Kenneth Fallon (incorporated by reference to Exhibit 10.1
to Registrants Quarterly Report on Form 10-Q, filed on
November 9, 2009) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.59
|
|
|
Amendment No. 1 to Nontransferable Independent Director
Stock Option Agreement between the Company and Kenneth
Fallon, dated September 3, 2009 (incorporated by
reference to Exhibit 10.2 to Registrants Quarterly
Report on Form 10-Q, filed on November 9, 2009) ^
|
|
*
|
|
|
|
|
|
|
|
|
10.60
|
|
|
Form of Letter Agreement between the Company and
Non-Employee Directors, dated September 3, 2009
(incorporated by reference to Exhibit 10.3 to
Registrants Quarterly Report on Form 10-Q, filed on
November 9, 2009)
|
|
*
|
|
|
|
|
|
|
|
|
10.61
|
|
|
Revolving Credit and Security Agreement, dated December
29, 2009, between PNC Bank, National Association and
Osteotech, Inc. (incorporated by reference to Exhibit
10.1 to Registrants Current Report on Form 8-K, filed on
January 5, 2010)
|
|
*
|
|
|
|
|
|
|
|
|
10.62
|
|
|
Tissue Recovery Agreement between the Company and
Community Blood Center d/b/a Community Tissue Services
dated October 30, 2009.
|
|
**
|
|
|
|
|
|
|
|
|
21.1
|
|
|
Subsidiaries of the Registrant
|
|
**
|
|
|
|
|
|
|
|
|
23.1
|
|
|
Consent of BDO Seidman, LLP
|
|
**
|
27
|
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
|
+
|
|
|
|
|
|
|
|
|
31.2
|
|
|
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
|
+
|
|
|
|
|
|
|
|
|
32.1
|
|
|
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
**
|
|
|
|
|
|
|
|
|
32.2
|
|
|
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
**
|
|
|
|
*
|
|
Previously filed; incorporated herein by reference
|
|
**
|
|
Filed with Original Form 10-K
|
|
+
|
|
Filed herewith as an exhibit to this Amendment No. 2 to Form 10-K
|
|
^
|
|
Management contracts or compensatory plans and arrangements required to be filed pursuant to Item 10(iii)
|
28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this Amendment No. 2 on Form 10-K/A to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
Dated: October 29, 2010
|
|
OSTEOTECH, INC.
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ SAM OWUSU-AKYAW
Sam Owusu-Akyaw
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
(Principal Executive Officer) and Director
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ MARK H. BURROUGHS
Mark H. Burroughs
|
|
|
|
|
|
|
Executive Vice President
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
29
Grafico Azioni Osteotech Com (MM) (NASDAQ:OSTE)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Osteotech Com (MM) (NASDAQ:OSTE)
Storico
Da Set 2023 a Set 2024