DEF 14A 1 def14a.htm DEF 14A alks_Current folio_Proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

 

 

 

 

Filed by the Registrant  ☒

 

Filed by a Party other than the Registrant  ☐

 

Check the appropriate box:

Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12

 

ALKERMES PLC

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

 

 

(5)

Total fee paid:

 

 

 

Fee paid previously with preliminary materials.

☐ 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

(2)

Form, Schedule or Registration Statement No.:

 

(3)

Filing Party:

 

(4)

Date Filed:

 

 

 

 


 

Picture 4

Registered in Ireland—No. 498284

Connaught House

1  Burlington Road

Dublin 4, Ireland

 

NOTICE OF 2017 ANNUAL GENERAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 24, 2017

 

To the Shareholders:

 

The 2017 Annual General Meeting of Shareholders of Alkermes plc (the “Company” or “Alkermes”), a company incorporated under the laws of Ireland, will be held on May 24, 2017 at 12:00 p.m., Irish Standard Time, at the Company’s offices at Connaught House, 1 Burlington Road, Dublin 4, Ireland, for the following purposes:

 

1.

By separate resolutions, to elect as Class III directors to serve for a three-year term expiring at the Company’s Annual General Meeting of Shareholders in 2020 and until their respective successors are elected and shall qualify, the following individuals as nominated by the Company’s Board of Directors (the “Board”):

 

a.

Paul J. Mitchell

 

b.

Richard F. Pops

 

2.

To hold a non-binding, advisory vote on the compensation of the Company’s named executive officers.

 

3.

To ratify the appointment of PricewaterhouseCoopers LLP as the independent auditor and accounting firm of the Company and to authorize the Audit and Risk Committee of the Board to set the independent auditor and accounting firm’s remuneration.

 

4.

To approve the Alkermes plc 2011 Stock Option and Incentive Plan, as amended.

 

5.

To grant the Board the authority to allot and issue shares under Irish law.

 

6.

To approve any motion to adjourn the 2017 Annual General Meeting of Shareholders, or any adjournments thereof, to another time and place to solicit additional proxies if there are insufficient votes at the time of the 2017 Annual General Meeting of Shareholders to approve Proposal 7.

 

7.

To grant the Board the authority to allot and issue shares for cash without first offering those shares to existing shareholders pursuant to the statutory pre-emption right that would otherwise apply under Irish law.

 

8.

To transact such other business as may properly come before the meeting and any adjournments or postponements of the meeting.

 

Proposal 1  for the election of directors relates solely to the election of two (2) Class III directors nominated by the Company’s Board and does not include any other matters relating to the election of directors, including, without limitation, the election of directors nominated by any shareholder. Proposals 1, 3, 4, 5 and 6 are ordinary resolutions, requiring a majority of the votes cast at the meeting. Proposal 2  asks for a non-binding, advisory vote, and therefore there is no “required vote” that would constitute approval. Proposal 7 is a special resolution and requires the affirmative vote of the holders of at least 75% of the votes cast. These items of business are more fully described in the proxy


 

statement accompanying this notice. Shareholders as of March 31, 2017, the record date for the 2017 Annual General Meeting of Shareholders, are entitled to vote on these matters.

 

During the 2017 Annual General Meeting of Shareholders, following a review of the Company’s affairs, management will present the Company’s Irish Statutory Financial Statements for the fiscal year ended December 31, 2016, and the reports of the independent auditor and accounting firm thereon.

 

By Order of the Board of Directors.

 

 

 

 

 

 

 

Picture 2 

 

 

KATHRYN L. BIBERSTEIN

Secretary

Dublin, Ireland

April 13, 2017

 

 

 

 

 

 

 

Whether or not you expect to attend the 2017 Annual General Meeting of Shareholders in person, we encourage you to cast your vote promptly so that your shares will be represented and voted at the meeting. Any shareholder entitled to attend, speak and vote at the 2017 Annual General Meeting of Shareholders may appoint one or more proxies, who need not be a shareholder(s) of Alkermes plc. If you wish to appoint as proxy any person other than the individuals specified on the Company’s proxy card, please contact the Company Secretary at our registered office; your nominated proxy must attend the 2017 Annual General Meeting of Shareholders in person in order for your votes to be cast.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2017 ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 24, 2017.  The notice and proxy statement, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016,  and the Company’s Irish Statutory Financial Statements, including related reports, are available at http://www.viewproxy.com/alkermes/2017. These materials are also available in the Investors section of the Company’s  website, available at www.alkermes.com.

 


 

Table of Contents

 

 

 

 

Page

GENERAL INFORMATION ABOUT THE MEETING AND VOTING 

1

PROPOSAL 1—ELECTION OF DIRECTORS (ORDINARY RESOLUTIONS) 

7

DIRECTORS AND EXECUTIVE OFFICERS 

8

CORPORATE GOVERNANCE AND BOARD MATTERS 

16

THE BOARD OF DIRECTORS AND ITS COMMITTEES 

25

PROPOSAL 2—ADVISORY VOTE ON EXECUTIVE COMPENSATION (ORDINARY RESOLUTION) 

27

PROPOSAL 3—NON-BINDING RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR AND ACCOUNTING FIRM AND BINDING AUTHORIZATION OF AUDIT AND RISK COMMITTEE TO SET INDEPENDENT AUDITOR AND ACCOUNTING FIRM’S REMUNERATION (ORDINARY RESOLUTION) 

28

PROPOSAL 4—APPROVAL OF ALKERMES PLC 2011 STOCK OPTION AND INCENTIVE PLAN, AS AMENDED (ORDINARY RESOLUTION) 

29

BACKGROUND TO PROPOSALS 5 AND 7 

39

PROPOSAL 5—DIRECTORS’ AUTHORITY TO ALLOT AND ISSUE SHARES (ORDINARY RESOLUTION) 

44

PROPOSAL 6—ADJOURNMENT PROPOSAL (ORDINARY RESOLUTION) 

46

PROPOSAL 7—DIRECTORS’ AUTHORITY TO ALLOT AND ISSUE SHARES FOR CASH WITHOUT FIRST OFFERING SHARES TO EXISTING SHAREHOLDERS (SPECIAL RESOLUTION) 

47

REPORT OF THE AUDIT AND RISK COMMITTEE 

49

AUDIT FEES 

51

OWNERSHIP OF THE COMPANY’S ORDINARY SHARES 

52

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 

55

REPORT OF THE COMPENSATION COMMITTEE 

56

EXECUTIVE COMPENSATION—COMPENSATION DISCUSSION AND ANALYSIS 

57

DIRECTOR COMPENSATION 

81

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS 

84

DISCLOSURE WITH RESPECT TO OUR EQUITY COMPENSATION PLANS 

85

OTHER BUSINESS 

86

APPENDIX A—ALKERMES PLC 2011 STOCK OPTION AND INCENTIVE PLAN, AS AMENDED 

A-1

 

 

 

 


 

Picture 6

 

Registered in Ireland—No. 498284

Connaught House

1 Burlington Road

Dublin 4, Ireland

 

PROXY STATEMENT

FOR THE 2017 ANNUAL GENERAL MEETING OF SHAREHOLDERS

 

TO BE HELD ON MAY 24, 2017

 

GENERAL INFORMATION ABOUT THE MEETING AND VOTING

 

Use of the terms such as “us,” “we,” “our,” “Alkermes” or the “Company” in this proxy statement is meant to refer to Alkermes plc and its consolidated subsidiaries.

 

Why am I receiving these materials?

 

We are making this proxy statement available to you on or about April 13, 2017 on the Internet, or by delivering printed versions to you by mail, because our Board of Directors (the “Board”) is soliciting your proxy to vote at the Company’s 2017 Annual General Meeting of Shareholders (the “Annual Meeting”) on May 24, 2017. This proxy statement contains information about the items being voted on at the Annual Meeting and important information about Alkermes.

 

This proxy statement and the following documents relating to the Annual Meeting are available at http://www.viewproxy.com/alkermes/2017 and on the Investors section of our website, available at www.alkermes.com:

 

Our Notice Regarding Internet Availability of Proxy Materials (the “Notice”);

Our Annual Report on Form 10-K for the year ended December 31, 2016; and

 

Our Irish Statutory Financial Statements for the year ended December 31, 2016 and the reports of the directors and independent auditor and accounting firm thereon.

 

Who can vote at the Annual Meeting?

 

Only shareholders who are registered as shareholders of the Company as of the close of trading on the NASDAQ Global Select Market (“Nasdaq”) on March 31, 2017 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting. On the Record Date, there were 153,098,864 ordinary shares issued and outstanding and entitled to be voted.

 

Each ordinary share that you own as of the Record Date entitles you to one vote on each matter to be voted upon at the Annual Meeting. We are making this proxy statement and other Annual Meeting materials available on the Internet or, upon request, sending printed versions of these materials on or about April 13, 2017 to all shareholders of record as of the Record Date.

 

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How do proxies work?

 

Our Board is asking for your proxy authorizing us to vote your shares at the Annual Meeting in the manner you direct. You may abstain from voting on any matter. If you submit your proxy without specifying your voting instructions, we will vote your shares as follows:

 

Election of Directors. FOR the election of each of our two Class III director nominees;

 

Advisory Vote on Executive Compensation. FOR the non-binding, advisory vote on executive compensation;

 

PricewaterhouseCoopers. FOR the ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as the independent auditor and accounting firm of the Company and the authorization of the Audit and Risk Committee of the Board to set the independent auditor and accounting firm’s remuneration;

 

Alkermes plc 2011 Stock Option and Incentive Plan, as amended. FOR the Alkermes plc 2011 Stock Option and Incentive Plan, as amended. Your approval will serve to ratify the performance measures set forth in the 2011 Plan (as defined herein) and to increase the shares authorized for issuance thereunder;

 

Issuance of Shares. FOR granting the Board the authority to allot and issue shares under Irish law;

 

Adjournment of the Annual Meeting.  FOR approval of any motion to adjourn the Annual Meeting, or any adjournments thereof, to another time and place to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve the statutory pre-emption rights proposal described below;

 

Statutory Pre-Emption Rights. FOR granting the Board the authority to allot and issue shares for cash without first offering those shares to existing shareholders pursuant to the statutory pre-emption right that would otherwise apply under Irish law; and

 

As to any other matter that may properly come before the meeting or any adjournment or postponement, in accordance with your named proxies’ best judgment.

 

Ordinary shares represented by valid proxies received in time for the Annual Meeting and not revoked before the Annual Meeting will be voted at the Annual Meeting. You can revoke your proxy and change your vote in the manner described below (under “Can I change my vote after submitting my proxy?”). If your shares are held through a bank, broker or other nominee, please follow the instructions that you were provided by such bank, broker or other nominee.

 

How do I vote?

 

It is important that your shares are represented at the Annual Meeting, whether or not you attend the Annual Meeting in person.

 

Shareholders of record.    If, as of the Record Date, your ordinary shares were registered directly in your name with the Company’s transfer agent, Computershare Trust Company, N.A., then you are a shareholder of record. As a shareholder of record, there are four ways to vote:

 

Telephone: By calling the toll-free telephone number indicated on your proxy card. Easy-to-follow voice prompts allow you to submit your proxy and confirm that your instructions have been properly recorded.

 

Internet: By going to the Internet website indicated on the Notice or proxy card. As with telephone voting, you can confirm that your instructions have been properly recorded.

 

Mail: By signing, dating and returning a printed proxy card (which will be forwarded to the Company’s registered address electronically).

 

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In Person: By submitting a written ballot in person at the Annual Meeting. To obtain directions to attend the Annual Meeting, please contact our Investor Relations department at financial@alkermes.com. We will pass out ballots at the Annual Meeting to anyone who wishes to vote in person.

 

If you are a shareholder of record of Alkermes and you choose to submit your proxy by telephone by calling the toll-free number on your proxy card, your use of that telephone system and in particular the entry of your pin number/other unique identifier, will be deemed to constitute your appointment, in writing and under hand, and for all purposes of the Irish Companies Act 2014 (the “Companies Act”), of each of Iain M. Brown, James M. Frates and Thomas Riordan as your proxy to vote your shares on your behalf in accordance with your telephone instructions.

 

Shares held in a bank or brokerage account.    If your shares are held in a brokerage account in your broker’s name (this is called “street name”), please follow the voting instructions provided by your bank, broker or other nominee. In most cases, you may submit voting instructions by telephone or by Internet to your bank, broker or other nominee, or you can sign, date and return a voting instruction form to your bank, broker or other nominee. If you provide specific voting instructions by telephone, by Internet or by mail, your bank, broker or other nominee must vote your shares as you have directed. If you wish to vote in person at the Annual Meeting, you must request a legal proxy from your bank, broker or other nominee.

 

What is the deadline for voting my shares if I do not vote in person at the Annual Meeting?

 

If you are a shareholder of record, you may vote by Internet or submit your proxy by telephone until 4:59 a.m., Irish Standard Time on May 23, 2017 (11:59 p.m., United States Eastern Daylight Time on May 22, 2017), or, if you elect to vote by mail, your signed and dated printed proxy card must be received by 4:59 a.m., Irish Standard Time on May 23, 2017 (11:59 p.m., United States Eastern Daylight Time on May 22, 2017).

 

If you are a beneficial owner of shares held through a bank or brokerage firm, please follow the voting instructions provided by your bank or brokerage firm.

 

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

 

We have elected to provide access to our proxy materials on the Internet, consistent with the rules of the Securities and Exchange Commission (“SEC”). Accordingly, unless a shareholder has instructed us otherwise, we are only mailing the Notice to our shareholders. You can access our proxy materials on the website referred to in the Notice or you may request printed versions of our proxy materials for the Annual Meeting. Instructions on how to access our proxy materials on the Internet or to request printed versions are provided in the Notice. In addition, you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.

 

What does it mean if I receive more than one notice regarding the Internet availability of proxy materials or more than one set of printed proxy materials?

 

If you hold your shares in more than one account, you may receive a separate Notice or a separate set of printed proxy materials, including a separate proxy card or voting instruction form, for each account. To ensure that all of your shares are voted, please submit your proxy by telephone or vote by Internet or sign, date and return a proxy card or voting instruction form for each account.

 

How many votes do I have?

 

On each matter to be voted upon, you have one vote for each ordinary share you owned as of the Record Date.

 

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What happens if I do not give specific voting instructions when I deliver my proxy?

 

Shareholders of Record.  If you are a shareholder of record and you:

 

indicate when voting by Internet or submitting your proxy by telephone that you wish to vote as recommended by our Board; or

 

if you sign and return a proxy card without giving specific voting instructions,

 

then the Company-designated proxy holders will vote your shares in the manner recommended by our Board on all matters presented in this proxy statement and the proxy holders may determine in their discretion how to vote your shares in respect of any other matters properly presented for a vote at the Annual Meeting.

 

Shares held in a bank or brokerage account.  If your shares are held in a bank or brokerage account in your broker’s name and your bank or brokerage firm does not receive instructions from you about how your shares are to be voted, one of two things can happen, depending on the type of proposal. Pursuant to applicable rules, your broker can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary” items. Discretionary items are proposals considered routine under the applicable rules on which your broker may vote your shares held in street name even in the absence of your voting instructions. A bank or brokerage firm may not vote your shares with respect to non-discretionary items if you have not provided instructions. This is called a “broker non-vote.” We strongly encourage you to submit your proxy and exercise your right to vote as a shareholder.

 

Who is paying for this proxy solicitation?

 

We will pay for the entire cost of soliciting proxies. In addition to such cost,  our directors, employees and third-party proxy solicitors may also solicit proxies in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

 

What is the quorum requirement?

 

A quorum of shareholders is necessary to hold a valid Annual Meeting. A quorum will be present if at least one or more shareholders holding not less than a majority of the issued and outstanding shares entitled to vote are present at the Annual Meeting or represented by proxy. On the Record Date, there were 153,098,864 ordinary shares issued and outstanding and entitled to vote. Thus, the holders of 76,549,433 ordinary shares must be present in person or represented by proxy at the Annual Meeting to have a quorum.

 

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the Annual Meeting. Abstentions and broker non-votes will be counted toward the quorum requirement. If there is no quorum present within one hour of the time appointed for the Annual Meeting, the Annual Meeting shall stand adjourned to May 31, 2017 at 12:00 p.m., Irish Standard Time at the offices of the Company located at Connaught House, 1 Burlington Road, Dublin 4, Ireland, or such other time or place as the Board may decide.

 

What vote is required to approve each proposal?

 

Election of Directors: The affirmative vote of a majority of the votes cast at the Annual Meeting is required for the election of each of Paul J. Mitchell and Richard F. Pops. Our articles of association (our Articles of Association”) provide that if, at any annual general meeting of shareholders, the number of directors is reduced below the minimum prescribed by our Articles of Association due to the failure of any director nominee to receive a majority of the votes cast, then in those circumstances, the nominee or nominees who receive the highest number of votes in favor of election will be elected (until the next annual general meeting of shareholders) in order to maintain such prescribed minimum number of directors.

 

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Advisory Vote on Executive Compensation: Because this proposal asks for a non-binding, advisory vote, there is no “required vote” that would constitute approval. We value the opinions expressed by our shareholders in this advisory vote, and the Compensation Committee of the Board, which is responsible for overseeing and administering our executive compensation programs, will consider the outcome of the vote when designing our compensation programs and making future compensation decisions for our named executive officers.

 

Ratification of PricewaterhouseCoopers LLP as our independent auditor and accounting firm and authorization to set such independent auditor and accounting firm’s remuneration: Ratify, in a non-binding vote, the appointment of PwC as our independent auditor and accounting firm for the fiscal year ending December 31, 2017 and authorize, in a binding vote, the Audit and Risk Committee of the Board to determine the independent auditor and accounting firm’s remuneration. The affirmative vote of a majority of the votes cast at the Annual Meeting is required to authorize the Audit and Risk Committee of the Board to determine the independent auditor and accounting firm’s remuneration.

 

Alkermes plc 2011 Stock Option and Incentive Plan, as amended: The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve the Alkermes plc 2011 Stock Option and Incentive Plan, as amended.

 

Board Authority to Issue Shares.    The affirmative vote of a majority of the votes cast at the Annual Meeting is required to grant the Board the authority to allot and issue shares under Irish law.

 

Adjournment of the Annual Meeting.    The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve any motion to adjourn the Annual Meeting, or any adjournments thereof, to another time and place to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve Proposal 7.

 

Statutory Pre-Emption Rights.    The affirmative vote of at least 75% of the votes cast at the Annual Meeting is required to grant the Board the authority to issue shares for cash without first offering those shares on the same or more favorable terms to our existing shareholders on a pro-rata basis.

 

How will voting on any other business be conducted?

 

The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named as your proxy are entitled to vote on those matters in accordance with their best judgment.

 

How are votes counted? How are abstentions and broker non-votes treated?

 

Votes will be counted by the inspector of election appointed by the Board for the Annual Meeting. Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of the proposals because they are not considered as votes cast.

 

Can I change my vote after submitting my proxy?

 

Yes. If, as of the Record Date, your ordinary shares were registered directly in your name with our transfer agent, then you may revoke your proxy by taking any of the following actions:

 

providing written notice of revocation to the Secretary of the Company (at Connaught House, 1 Burlington Road, Dublin 4, Ireland, Attn.: Secretary, Annual Meeting) by any means, including facsimile (+353 1 772‑8001), which notice must be received before the commencement of the Annual Meeting;

 

signing and delivering a proxy relating to the same shares and bearing a later date, that is received no later than 4:59 a.m., Irish Standard Time on May 23, 2017 (11:59 p.m., United States Eastern Daylight Time on May 22, 2017);

 

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transmitting a subsequent vote over the Internet or submitting a subsequent proxy by telephone, but no later than 4:59 a.m., Irish Standard Time on May 23, 2017 (11:59 p.m., United States Eastern Daylight Time on May 22, 2017); or

 

attending the Annual Meeting and voting in person, although attendance at the Annual Meeting will not, by itself, revoke a proxy.

 

Please note that if your ordinary shares are held of record by a bank, broker or other nominee, you must contact the bank, broker or other nominee to revoke your proxy. If you wish to vote in person at the Annual Meeting, you must request a legal proxy from your bank, broker or other nominee.

 

How can I find out the results of the voting at the Annual Meeting?

 

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in a current report on Form 8‑K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a current report on Form 8‑K within four business days after the Annual Meeting,  we intend to file a current report on Form 8‑K to publish preliminary results and, within four business days after the final results are known to us, to file an additional current report on Form 8‑K to publish the final results. You will be able to find a copy of this Form 8‑K on the Internet electronic data system of the SEC called EDGAR at www.sec.gov or through the Investors section of our website, available at www.alkermes.com.

 

Important Notice Regarding the Internet and Electronic Availability of Proxy Materials for the Annual Meeting:

 

As permitted by the SEC, the Company is mailing the Notice to all shareholders of record. All shareholders will have the ability to access the proxy statement, the Irish Statutory Financial Statements, including related reports, and the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on February 17, 2017 (the “Annual Report”) at http://www.viewproxy.com/alkermes/2017 or to request a printed set of these materials at no charge. These materials are also available in the Investors section of our website, available at www.alkermes.com. Instructions on how to access these materials over the Internet or to request a printed copy may be found in the Notice.

 

In addition, any shareholder may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. Choosing to receive future proxy materials by email will save the Company the cost of printing and mailing documents to shareholders and will reduce the impact of annual general meetings of shareholders on the environment. A shareholder’s election to receive proxy materials by email will remain in effect until the shareholder terminates it.

 

Note Regarding Trademarks

 

We are the owner of various United States federal trademark registrations (“®”) and other trademarks (“TM”), including ALKERMES, ARISTADA, Inspiration Grants and VIVITROL. Other trademarks, trade names and service marks appearing in this proxy statement are the property of their respective owners. Solely for convenience, the trademarks and trade names in this this proxy statement are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

 

Note Regarding Product References

 

Except as otherwise suggested by the context, (a) references to “products” or “our products” in this proxy statement include our marketed products, marketed products using our proprietary technologies, our product candidates, and product candidates using our proprietary technologies and (b) references to the “biopharmaceutical industry” are used interchangeably with references to the “biotechnology” and/or “pharmaceutical industries.”

 

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PROPOSAL 1

 

ELECTION OF DIRECTORS

 

(Ordinary resolutions)

 

Our Board, upon the recommendation of the Nominating and Corporate Governance Committee of the Board, has nominated each of Paul J. Mitchell and Richard F. Pops for election as Class III directors to serve a three-year term expiring at the Company’s  Annual General Meeting of Shareholders in 2020 and until their respective successors are elected and shall qualify, unless they resign or are removed. As described in detail below, our nominees have considerable professional and business expertise. The recommendation of our Board is based on its carefully considered judgment that the experience, qualifications, attributes and skills of our nominees qualify them to serve on our Board.

 

The persons named in the accompanying proxy intend to vote for the election of each of Paul J. Mitchell and Richard F. Pops as Class III directors to serve a three-year term expiring at the Company’s  Annual General Meeting of Shareholders in 2020 and until their respective successors are elected and shall qualify, unless they resign or are removed. The Board is informed that the nominees are willing to serve as directors, but if they should decline to serve or become unavailable for election at the Annual Meeting, an event which the Board does not anticipate, the persons named in the proxy will vote for such nominee or nominees as may be designated by the Board, unless the Board reduces the number of directors accordingly.

 

The nominees for Class III directors receiving a majority of the votes cast by shareholders (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) will be elected to serve on the Board. Abstentions and broker non-votes, if any, will be counted for purposes of establishing a quorum but will have no effect on the election of nominees because they are not considered as votes cast.

 

If, at any annual general meeting of shareholders, the number of directors is reduced below the minimum prescribed by our Articles of Association due to the failure of any director nominee to receive a majority of the votes cast, then, in those circumstances, the nominee or nominees who receive the highest number of votes in favor of election will be elected in order to maintain such prescribed minimum number of directors. Each such director will remain a director (subject to the provisions of the Companies Act and our Articles of Association) only until the conclusion of the next annual general meeting of shareholders unless he or she is reelected.

 

The Board unanimously recommends that you vote FOR the election of each of Paul J. Mitchell and Richard F. Pops to our Board.

 

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DIRECTORS AND EXECUTIVE OFFICERS

 

Our Board Structure

 

Our Board consists of three classes of directors with each director serving a staggered three-year term as follows:

 

 

 

 

 

 

Class I Directors

Term Expires at the 2018

Annual General Meeting of

Shareholders

 

Class II Directors

Term Expires at the 2019

Annual General Meeting of

Shareholders

 

Class III Directors

Term Expires at this

Annual General Meeting of

Shareholders

Floyd E. Bloom, M.D.

 

David W. Anstice

 

Paul J. Mitchell

Nancy J. Wysenski

 

Robert A. Breyer

 

Richard F. Pops*

Nancy L. Snyderman, M.D. 

 

Wendy L. Dixon, Ph.D.

 

 

 

            

            

 

*  

Chairman of the Board

 

Directors and Executive Officers

 

The following table sets forth our directors and executive officers, their ages and the position currently held by each such person as of March 31, 2017. The following biographical descriptions set forth information regarding each director and executive officer, including business experience and, for directors, the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the person should serve as our director. Information about the number of our ordinary shares beneficially owned by our directors and executive officers, directly and indirectly, appears elsewhere in this proxy statement under the heading “Ownership of the Company’s Ordinary Shares.” Unless otherwise indicated in the biographical information below, each of our executive officers is employed by our U.S. subsidiary, Alkermes, Inc.

 

 

 

 

 

 

Name

 

Age

 

Position

Ms. Kathryn L. Biberstein

 

58

 

Executive Vice President, Chief Compliance Officer, Chief Administrative Officer and Chief Risk Officer (**)

Mr. Iain M. Brown

 

48

 

Senior Vice President, Finance and Chief Accounting Officer

Mr. Shane M. Cooke

 

54

 

President

Dr. Elliot W. Ehrich

 

57

 

Executive Vice President, Research and Development and Chief Medical Officer

Mr. James M. Frates

 

49

 

Senior Vice President, Chief Financial Officer and Treasurer

Mr. David J. Gaffin

 

45

 

Senior Vice President, Chief Legal Officer

Mr. Michael J. Landine

 

63

 

Senior Vice President, Corporate Development

Mr. Mark P. Stejbach

 

53

 

Senior Vice President, Chief Commercial Officer

Mr. Richard F. Pops

 

55

 

Director, Chairman of the Board and Chief Executive Officer

Mr. David W. Anstice(3*)

 

68

 

Director

Dr. Floyd E. Bloom(1)

 

80

 

Director

Mr. Robert A. Breyer(1)(2)

 

73

 

Director

Dr. Wendy L. Dixon(2*)

 

61

 

Director

Mr. Paul J. Mitchell(1*)(3)(4)

 

64

 

Director

Dr. Nancy L. Snyderman

 

64

 

Director

Ms. Nancy J. Wysenski(2)(3)

 

59

 

Director

 

            

            

 

(1)

Member, Audit and Risk Committee

(2)

Member, Nominating and Corporate Governance Committee

(3)

Member, Compensation Committee

(4)

Lead Independent Director

(*)

Committee Chairperson

(**)  

Ms. Biberstein also serves as Secretary of the Company

 

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Biographical Information

 

Ms. Kathryn L. Biberstein

 

Title: Executive Vice President, Chief Compliance Officer, Chief Administrative Officer and Chief Risk Officer. Ms. Biberstein also serves as Secretary of the Company.

 

Appointment to current positions: February 2017

 

Experience: Prior to assuming her current positions, from May 2016 to February 2017, Ms. Biberstein was our Executive Vice President, Chief Compliance Officer and Chief Administrative Officer. From September 2015 to May 2016, Ms. Biberstein was our Executive Vice President, Chief Legal Officer and Chief Compliance Officer. From July 2013 to September 2015, Ms. Biberstein was our Senior Vice President, Chief Legal Officer and Chief Compliance Officer. From September 16, 2011 to July 2013, Ms. Biberstein was our Senior Vice President, General Counsel and Chief Compliance Officer. From May 2007 to September 16, 2011, Ms. Biberstein served as Senior Vice President, General Counsel and Chief Compliance Officer of Alkermes, Inc. From February 2003 to May 2007, Ms. Biberstein served as Vice President and General Counsel of Alkermes, Inc. She was Of Counsel at Crowell & Moring LLC from February 2002 to February 2003 and performed legal consulting services for various clients from March 2000 to February 2002. She was also employed by Serono S.A., a biotechnology company, as General Counsel from 1993 to March 2000, where she was a member of the Executive Committee. Ms. Biberstein is Chair of the General Counsels Executive Committee for the Biotechnology Innovation Organization (“BIO”). She is also a Director at Meridian Stories (not-for-profit).

 

Mr. Iain M. Brown

 

Title: Senior Vice President, Finance and Chief Accounting Officer

 

Appointment to current positions: May 2016

 

Experience: Prior to assuming his current positions, Mr. Brown was our Chief Accounting Officer and Vice President, Finance, from May 2015 to May 2016. From September 16, 2011 to May 2015, Mr. Brown was our Vice President, Finance. From June 2006 to September 16, 2011, Mr. Brown served as Vice President, Finance of Alkermes, Inc. From March 2005 to June 2006, Mr. Brown served as Director of Finance of Alkermes, Inc. From July 2004 to March 2005, Mr. Brown served as Director of Financial Planning and Analysis of Alkermes, Inc. Mr. Brown joined Alkermes, Inc. in June 2003 as Associate Director of Financial Planning and Analysis. Prior to joining Alkermes, Inc., Mr. Brown was Vice President of Finance, North America at Serono, Inc.

 

Mr. Shane M. Cooke

 

Title: President

 

Appointment to current position: September 2011

 

Experience: Mr. Cooke is employed by Alkermes Pharma Ireland Limited, an Irish subsidiary of the Company. From May 2005 to September 16, 2011, Mr. Cooke served as a Director of Elan Corporation, plc (“Elan”). From May 2007 to September 16, 2011, Mr. Cooke was Executive Vice President of Elan and Head of Elan Drug Technologies. Mr. Cooke served as the Chief Financial Officer of Elan from July 2001, when he joined Elan, until May 2011. Prior to joining Elan, Mr. Cooke was Chief Executive of Pembroke Capital Limited, an aviation leasing company, and prior to that, held a number of senior positions in finance in the banking and aviation industries. He is a chartered accountant. He is currently on the board of directors of Prothena Biosciences and Prothena Therapeutics, both subsidiaries of publicly traded Prothena Corporation plc, as well as Endo International plc, a publicly traded company.

 

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Dr. Elliot W. Ehrich

 

Title: Executive Vice President, Research and Development, and Chief Medical Officer

 

Appointment to current positions: February 2015

 

Experience: Prior to assuming his current positions, from September 16, 2011 until February 2015, Dr. Ehrich was our Senior Vice President, Research and Development, and Chief Medical Officer. From May 2007 to September 16, 2011, Dr. Ehrich served as Senior Vice President, Research and Development, and Chief Medical Officer of Alkermes, Inc. Prior to this Dr. Ehrich served as Vice President, Science Development and Chief Medical Officer of Alkermes, Inc. Prior to joining Alkermes in 2000, Dr. Ehrich spent seven years at Merck & Co., Inc. (“Merck”), a publicly traded pharmaceutical company, overseeing the clinical development and registration of novel pharmaceuticals. Dr. Ehrich is a Fellow of the American College of Rheumatology and has had numerous publications in peer-reviewed journals. Dr. Ehrich worked as a research associate at the European Molecular Biology Laboratory in Heidelberg, Germany before attending medical school. Dr. Ehrich is also a member of the scientific advisory boards for Aileron Therapeutics and Heptares Therapeutics, both privately held biopharmaceutical companies. Dr. Ehrich is also a strategic advisor to Verge Genomics.

 

Mr. James M. Frates

 

Title: Senior Vice President, Chief Financial Officer and Treasurer

 

Appointment to current positions: September 2011

 

Experience: Prior to assuming his current positions, from May 2007 to September 16, 2011, Mr. Frates served as Senior Vice President and Chief Financial Officer of Alkermes, Inc. From June 1998 to May 2007, Mr. Frates served as Vice President, Chief Financial Officer and Treasurer of Alkermes, Inc. From June 1996 to June 1998, he was employed at Robertson, Stephens & Company, most recently as a Vice President in Investment Banking. Prior to that time he was employed at Morgan Stanley & Co. Mr. Frates serves on the board of directors of Sage Therapeutics, a publicly traded biotechnology company. Mr. Frates served on the board of directors of GPC Biotech AG, a biotechnology company, from June 2004 to 2009, and was a national director of the Association of Bioscience Financial Officers from 2004 to 2009. Mr. Frates is also a Trustee of St. Paul’s School and The Roxbury Latin School.

 

Mr. David J. Gaffin

 

Title: Senior Vice President, Chief Legal Officer

 

Appointment to current position: May 2016

 

Experience: Prior to assuming his current position, Mr. Gaffin served as Vice President, U.S. General Counsel of Alkermes, Inc., from January 2014 to May 2016. From October 2011 to January 2014, Mr. Gaffin served as Vice President, Deputy General Counsel of Alkermes, Inc. From October 2009 to October 2011, Mr. Gaffin served as Senior Director, Deputy General Counsel of Alkermes, Inc. Mr. Gaffin joined Alkermes, Inc. in 2005 as Director, Deputy General Counsel. Prior to joining the company, Mr. Gaffin held the role of Assistant General Counsel at Biogen Inc., where he provided legal counsel on product-related matters and negotiated collaboration and licensing transactions.

 

Mr. Michael J. Landine

 

Title: Senior Vice President, Corporate Development

 

Appointment to current position: September 2011

 

Experience: Prior to assuming his current position, from May 2007 to September 16, 2011, Mr. Landine served as Senior Vice President, Corporate Development of Alkermes, Inc. From March 1999 until May 2007, Mr. Landine served

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as Vice President, Corporate Development of Alkermes, Inc. From March 1988 until June 1998, he was Chief Financial Officer and Treasurer of Alkermes, Inc. Mr. Landine is a member of the board of directors of Kopin Corporation, a publicly traded manufacturer of components for electronic products, and was a member of the board of directors of ECI Biotech, a privately held protein sensor company and GTC Biotherapeutics, Inc., a publicly traded biotechnology company. Mr. Landine was previously a Certified Public Accountant.

 

Mr. Mark P. Stejbach

 

Title: Senior Vice President, Chief Commercial Officer

 

Appointment to current position: February 2012

 

Experience: Prior to assuming his current position, Mr. Stejbach served at Tengion, Inc. from 2008 to 2012, most recently as its Chief Commercial Officer. He previously held senior positions at Merck and Biogen Idec Inc. and has over 25 years of experience in biotech and pharmaceutical marketing, sales, managed care and finance. Mr. Stejbach currently serves on the board of directors for Flexion Therapeutics, a publicly traded pharmaceutical company. He previously served on the charitable board of the Commonwealth National Fund from 2003 through 2011 and has served on the Advisory Board of the Center for Value-Based Insurance Design since 2009.

 

Mr. Richard F. Pops

 

Title: Chairman of the Board of Directors and Chief Executive Officer

 

Appointment to current positions: September 2011

 

Director since: September 2011. Director of Alkermes, Inc. from February 1991 to September 2011 (Chairman from April 2007 to September 2011)

 

Experience: Prior to assuming his current positions, Mr. Pops served as Chief Executive Officer of Alkermes, Inc. from February 1991 to April 2007 and as Chief Executive Officer and President from September 2009 until September 2011. Mr. Pops serves on the board of directors of Neurocrine Biosciences, Inc., Acceleron Pharma, Inc. and Epizyme Inc., all of which are publicly traded biotechnology companies. Mr. Pops also serves on the board of directors of BIO, Pharmaceutical Research and Manufacturers of America (“PhRMA”) and the National Health Council. He has previously served on the board of directors of two other publicly traded biopharmaceutical companies, Sirtris Pharmaceuticals from 2004 to 2008, and CombinatoRx, Incorporated from 2001 to 2009. Mr. Pops also served on the board of directors of Reliant Pharmaceuticals, a privately held pharmaceutical company purchased by GlaxoSmithKline in 2007, and on the advisory board of Polaris Venture Partners. He was a member of the Harvard Medical School Board of Fellows through June 2012. Mr. Pops is also on the advisory board for the Addiction Policy Forum.

 

Qualifications and Skills: Mr. Pops’ qualifications for our Board include his leadership experience, business judgment and industry knowledge. As a senior executive of Alkermes for over 25 years, he provides in-depth knowledge of our company derived from leading our day-to-day operations. His ongoing involvement as a board member of BIO,  PhRMA, as well as his position on the advisory board for the Addiction Policy Forum, brings to the organization extensive knowledge of the current state of the pharmaceutical industry and the policy issues impacting healthcare today. As a Co-Chair of BIO’s Regulatory Environment Committee, and a member of its Health Section Governing Board, and as and a member of PhRMA’s FDA and Biomedical Research Committee, Mr. Pops is an influential industry leader on FDA regulatory policy issues, including the two most recent Prescription Drug User Fee Act reauthorizations. Mr. Pops has also played a leadership role in the industry in identifying pathways to allow the patient voice to be incorporated into the drug development and approval process, which is a fundamental principle on which we operate our business.

 

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Mr. David W. Anstice

 

Title: Director

 

Director since: September 2011. Director of Alkermes, Inc. from October 2008 to September 2011.

 

Committee Memberships: Compensation Committee (Chairperson)

 

Experience: From 2006 until his retirement in 2008, Mr. Anstice served as Executive Vice President of Merck, with responsibility for enterprise strategy and implementation. During two separate parts of this period he was acting President, Global Human Health and President of Merck’s business in Japan. From 2003 to 2006, Mr. Anstice served as President of Merck, with responsibility for Merck’s Asia Pacific businesses. In his 34 years with Merck, he held a variety of positions including President, U.S. Human Health; President, Human Health, the Americas; President, U.S./Canada; and President, Human Health, Europe. He reported to the Merck CEO from 1994 until his retirement in 2008. Mr. Anstice is currently a director of CSL Limited, a global specialty biopharmaceutical company and a director of the private company NeuClone Pharmaceuticals Pty Ltd., a cell line production company. Mr. Anstice is also Chairman and President of the board for the University of Sydney USA Foundation, Vice Chairman and a member of the board of the U.S. Studies Centre at the University of Sydney, Australia, a member of the U.S. Advisory Council of the American Australian Association in New York, and an Adjunct Professor at the University of Sydney Business School.

 

Qualifications and Skills: Mr. Anstice’s lengthy service with Merck, in combination with the breadth of his responsibilities while at Merck, provides us with experience in, and knowledge of, the global research-based pharmaceutical industry. Mr. Anstice’s prior leadership positions in industry organizations, including as a board and executive committee member of BIO for approximately ten years and as Chairman of the National Pharmaceutical Council in 1997, augment his pharmaceutical management, organizational expertise and industry knowledge with knowledge of public policy issues involving pharmaceutical care. Mr. Anstice also has expertise in the areas of strategic planning, risk management and corporate governance.

 

Dr. Floyd E. Bloom

 

Title: Director

 

Director since: September 2011. Director of Alkermes, Inc. from 1987 to September 2011.

 

Committee Memberships: Audit and Risk Committee

 

Experience: Dr. Bloom was a founder of Alkermes, Inc. and has been active in neuropharmacology for more than 35 years, holding positions at Yale University, the National Institute of Mental Health, The Salk Institute, and The Scripps Research Institute. From 1983 to February 2005, Dr. Bloom was the Chairman of the Neuropharmacology Department at The Scripps Research Institute and is now Professor Emeritus. Dr. Bloom served as Editor-in-Chief of Science from 1995 to May 2000. He is a member of the National Academy of Sciences, the Royal Swedish Academy of Science and the American Philosophical Society. He is an Emeritus Trustee for the Board of Trustees at Washington University in St. Louis. Dr. Bloom is a director of AgeneBio, Inc. a privately held biopharmaceutical company. Dr. Bloom also serves on the Scientific Advisory Boards of aTyr Pharma, a privately held pharmaceutical company,  RiverVest, a private venture partnership focusing on life sciences, and Interpreta Inc., a privately held analytics service company, and as chairman of the Scientific Board for ModGene Pharma LLC, a privately held research and development company. Dr. Bloom served as a member of the board of directors of Elan from 2007 to 2009.

 

Qualifications and Skills: Dr. Bloom is a distinguished scientist and long-standing member of various scientific societies, including the National Academy of Sciences. His scientific knowledge makes him a resource to our research and development and commercial teams and a reference point for other directors. Dr. Bloom’s service on other company boards provides experience relevant to good corporate governance practices. As a founder of Alkermes, Inc., Dr. Bloom brings a historical perspective to the Board.

 

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Mr. Robert A. Breyer

 

Title: Director

 

Director since: September 2011. Director of Alkermes, Inc. from July 1994 to September 2011.

 

Committee Memberships: Audit and Risk Committee, Nominating and Corporate Governance Committee

 

Experience: Mr. Breyer served as the President of Alkermes, Inc. from July 1994 until his retirement in December 2001 and Chief Operating Officer from July 1994 to February 2001. Prior to that time, Mr. Breyer was an executive and held various positions in the global pharmaceutical and medical device industries, including general manager of Eli Lilly Benelux S.A and Eli Lilly Italia S.p.A. Mr. Breyer also served on the board of directors of Lentigen, Inc., a privately held, diversified biology company from 2007 to 2009.

 

Qualifications and Skills: Mr. Breyer’s experience as an executive in the global pharmaceutical and medical device industries provides management and operational skills to our Board. Mr. Breyer has experience with managing the overall financial performance of pharmaceutical and medical device units and in pharmaceutical manufacturing and sales and marketing operations in multiple locations in the U.S. and Europe. As a former executive at Alkermes, Inc., Mr. Breyer also has first-hand knowledge of our technology, manufacturing operations, research and development and management team.

 

Dr. Wendy L. Dixon

 

Title: Director

 

Director since: September 2011. Director of Alkermes, Inc. from January 2011 to September 2011.

 

Committee Memberships: Nominating and Corporate Governance Committee (Chairperson)

 

Experience: Dr. Dixon has extensive experience in the pharmaceutical and biotechnology industries, combining a technical background with experience in drug development, regulatory affairs and marketing. She directed the launches and growth of more than 20 pharmaceutical products. From 2001 to 2009 she was Chief Marketing Officer and President, Global Marketing for Bristol-Myers Squibb where she served on the Executive Committee. From 1996 to 2001 she was Senior Vice President, Marketing at Merck, and prior to that, she held executive management positions at West Pharmaceuticals,  Osteotech and Centocor and various positions at SmithKline and French (now GlaxoSmithKline) in marketing, regulatory affairs, project management and as a biochemist. Dr. Dixon is on the board of directors of Incyte Corporation, bluebird bio,  Eleven Biotherapeutics and Voyager Therapeutics, all publicly traded biotechnology or pharmaceutical companies, and was formerly on the board of Ardea Biosciences,  Dentsply International,  Edimer Pharmaceuticals,  Furiex Pharmaceuticals and Orexigen Therapeutics. She is an advisor to the Mellon Group, a member of the Longitude Capital Industry Advisory Board and is the principal of Great Meadow Consultancy. She was a Senior Advisor to The Monitor Group, now Deloitte, from 2010 to 2012. She also serves on the board of Special Equestrians, a non-profit.

 

Qualifications and Skills: Dr. Dixon brings a depth of experience in the marketing of pharmaceutical products across a broad variety of disease states and on a global basis to our Board. Dr. Dixon has a strong technical background and direct experience in product development and regulatory affairs, and has successfully built and grown commercial organizations in the United States and Europe, each of which provide valuable insight to our Board regarding the development and commercialization of pharmaceutical products. Dr. Dixon’s additional qualifications include her deep industry knowledge and her reputation as a strategic thinker with a focus on execution, as well as the ability to provide direction regarding improvements to the interface between research and development and marketing. Dr. Dixon’s service on other company boards provides experience relevant to good corporate governance practices.

 

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Mr. Paul J. Mitchell

 

Title: Director

 

Director since: September 2011. Lead independent director since August 2012. Director of Alkermes, Inc. from April 2003 to September 2011.

 

Committee Memberships: Audit and Risk Committee (Chairperson), Compensation Committee

 

Experience: Mr. Mitchell served as the Chief Financial Officer and Treasurer of Kenet, Inc. from April 2002 until January 2009. Prior to joining Kenet, Mr. Mitchell was the Chief Financial Officer and Treasurer of Kopin Corporation (“Kopin”) from April 1985 through September 1998. From September 1998 through June 2001, Mr. Mitchell served in a consulting role at Kopin as Director of Strategic Planning. Prior to joining Kopin, Mr. Mitchell worked for the international accounting firm of Touche Ross & Co. from 1975 to 1984. Mr. Mitchell is President of Mitchell Financial Group and a member of the board of directors of several private companies, including Informatics in Context, Inc. and Cedar Marine Propulsion Inc. and nonprofit organizations. Mr. Mitchell was previously a Certified Public Accountant.

 

Qualifications and Skills: Mr. Mitchell’s background as the Chief Financial Officer of several companies, including a publicly traded company, and as a former Certified Public Accountant, provides expertise to our Board in the areas of financial reporting, treasury, financing issues, executive compensation and compliance with securities obligations. His business judgment is relied upon by our Board when contemplating a variety of organizational and strategic issues.

 

Dr. Nancy L. Snyderman

 

Title: Director

 

Director since: May 2016.

 

Committee Memberships: None.

 

Experience: Dr. Snyderman is a board-certified otolaryngologist and is currently a consulting professor at Stanford University Center for Innovation in Global Health. She served as Chief Medical Editor at NBC News from 2006 until 2015 and was a clinical professor of otolaryngology at the University of Pennsylvania from August 2003 to December 2015. From January 2003 to September 2006, Dr. Snyderman was Senior Vice President Corporate Communications at Johnson & Johnson, a publicly traded pharmaceutical company. She practiced as an otolaryngologist at California Pacific Medical Center from July 1994 to June 2003, and acted as Medical Editor for ABC News from 1987 until May 2003. Dr. Snyderman is a fellow in the American College of Surgeons. She currently serves on the board of directors of GE’s Healthymagination, the Institute for Healthcare Improvement, the Albright Institute at Wellesley College, the Eye and Ear Foundation at the University of Pittsburgh Medical Center, and the National Meningitis Foundation. During Dr. Snyderman’s tenure as a medical journalist at NBC and ABC, she has received Emmy Awards, Edward R. Murrow Awards, a Columbia University DuPont Award, and a Gracie Award for her reporting. Dr. Snyderman attended medical school at the University of Nebraska and completed residencies in pediatrics and otolaryngology at the University of Pittsburgh.

 

Qualifications and Skills: Dr. Snyderman’s experiences as a veteran healthcare journalist, a practicing physician, and an executive at a pharmaceutical company, as well as her roles in academia and as advisor to policy organizations, make her uniquely qualified for the Board. The Board benefits from her expert insight into the intersection of healthcare policy, public relations, and journalism from the perspective of both a practitioner and an academic.

 

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Ms. Nancy J. Wysenski

 

Title: Director

 

Director since: May 2013.

 

Committee Memberships: Compensation Committee, Nominating and Corporate Governance Committee

 

Experience: From December 2009 through June 2012, Ms. Wysenski served as the Executive Vice President and Chief Commercial Officer of Vertex Pharmaceuticals Incorporated, a publicly traded pharmaceutical company. Prior to joining Vertex, Ms. Wysenski held the position of Chief Operating Officer of Endo Pharmaceuticals, a specialty pharmaceutical company, where she led sales, marketing, commercial operations, supply chain management, human resources and various business development initiatives. Prior to her role at Endo, Ms. Wysenski participated in the establishment of EMD Pharmaceuticals, Inc., where she held various leadership positions, including the role of President and Chief Executive Officer from 2001 to 2006 and Vice President of Commercial from 1999 to 2001. From 1984 to 1998, Ms. Wysenski held several sales-focused roles at major pharmaceutical companies, including Vice President of Field Sales for Astra Merck, Inc. Ms. Wysenski serves as a member of the board of directors of Inovio Pharma and Tetraphase Pharmaceuticals, both publicly traded pharmaceutical or vaccine companies. Ms. Wysenski formerly served as a director for Reata Pharmaceuticals, Inc. She is a founder of the Research Triangle Park chapter of the Healthcare Business Women’s Association and served on the Nominating Committee and National Advisory Board of the Healthcare Businesswomen’s Association.

 

Qualifications and Skills: Ms. Wysenski is a proven leader who brings to our Board extensive experience building and leading life sciences companies. Ms. Wysenski’s background includes executive management roles with responsibility over key operational and product commercialization functions, including substantial direct experience in sales, marketing, commercial operations, supply chain management, human resources and various business development initiatives. Her experience, leadership skills and knowledge of the life sciences industry will provide valuable insight to our Board with respect to the launch and commercialization of pharmaceutical products.

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

Board Composition

 

Our Board is comprised of eight members. Our Board has determined that each director serving on our Board, with the exception of Richard F. Pops, is an independent director as defined by Nasdaq rules. The composition and functioning of our Board and each of our committees complies with all applicable requirements of Nasdaq and the rules and regulations of the SEC. There are no family relationships among any of our directors or executive officers.

 

In accordance with our Articles of Association,  our Board is divided into three classes with staggered three-year terms. At each annual general meeting of shareholders, the successors to directors whose terms then expire will be elected to serve three-year terms. Our directors are divided among the three classes as follows:

 

the Class I directors are Floyd E. Bloom, M.D., Nancy L. Snyderman, M.D. and Nancy J. Wysenski, and their terms will expire at the Company’s Annual General Meeting of Shareholders to be held in 2018;

 

the Class II directors are David W. Anstice, Robert A. Breyer and Wendy L. Dixon, Ph.D., and their terms will expire at the Company’s Annual General Meeting of Shareholders to be held in 2019; and

 

the Class III directors are Paul J. Mitchell and Richard F. Pops, and their terms will expire at this Annual Meeting.

 

If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible.

 

Independence of Members of the Board of Directors

 

The Company defines an “independent” director in accordance with the applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules promulgated thereunder and the applicable rules of Nasdaq. Because it is not possible to anticipate or explicitly provide for all potential situations that may affect independence, the Board periodically reviews each director’s status as an independent director and whether any independent director has any other relationship with the Company that, in the judgment of the Board, would interfere with the director’s exercise of independent judgment in carrying out such director’s responsibilities as a director. The Board makes a determination as to whether each director is “independent” under the applicable provisions of the Exchange Act, the rules promulgated thereunder and the applicable rules of Nasdaq at two points in time during the year-after the annual general meeting of shareholders and in conjunction with the preparation and filing of the Company’s proxy statement. To assist in making its determination, the Board solicits information from each of the Company’s directors regarding whether such director, or any member of his or her immediate family, had a direct or indirect material interest in any transactions involving the Company, was involved in a debt relationship with the Company or received personal benefits outside the scope of such person’s normal compensation.

 

The Board has determined that each of David W. Anstice, Floyd E. Bloom, M.D., Robert A. Breyer, Wendy L. Dixon, Ph.D., Paul J. Mitchell, Nancy L. Snyderman, M.D. and Nancy J. Wysenski are independent within the meaning of the Company’s director independence standards and the director independence standards of the Exchange Act and Nasdaq. Furthermore, the Board has determined that each member of each committee of the Board is independent within the meaning of the director independence standards of the Company, the Exchange Act and Nasdaq.

 

Executive Sessions of Independent Directors

 

The Board’s policy is to hold meetings of the independent directors following each regularly scheduled in-person Board meeting. Independent director sessions do not include any employee directors of the Company and were held following each regularly scheduled in-person Board meeting during 2016. The Board has adopted a Charter of the Lead Independent Director which requires that members of the Board elect a non-management director to serve in a lead capacity, known as the Lead Independent Director, if the Chairman of the Board and Chief Executive Officer of the

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Company are the same person. The Board annually elects an independent director to serve as the Lead Independent Director, and Mr. Mitchell has served as our Lead Independent Director since August 2012.

 

Board Leadership Structure

 

The Board appointed Mr. Pops as Chairman of our Board and as our Chief Executive Officer. In determining that Mr. Pops serve in this combined role, the Board considered Mr. Pops’ ability to provide effective, consistent and continuous leadership to both our Board and our Company, his ability to align the strategic objectives of both management and the Board, his extensive knowledge of our operations and the industry and markets in which we compete and his ability to promote communication and synchronize activities between our Board and our senior management.

 

To facilitate effective independent oversight, the Board adopted the Lead Independent Director role, as described above. The Board believes that this structure provides an efficient and effective leadership model for the Company, and we believe that this Board leadership structure is the most appropriate structure for the Company as of the date of this proxy statement. The duties of the Lead Independent Director include:

 

presiding at all meetings of the Board at which the Chairman of the Board is not present, including all executive sessions of the independent directors;

 

reviewing and approving matters, such as agenda items and meeting schedules, to assure there is sufficient time for discussion of all agenda items, and, where appropriate, information provided to other Board members;

 

serving as the principal liaison between the Chairman of the Board and the independent directors;

 

facilitating the retention of outside advisors and consultants who report directly to the Board on Board-wide issues;

 

calling meetings of the independent directors of the Board; and

 

ensuring availability, when appropriate and if requested by shareholders, for consultation and direct communication.

 

A current copy of our Charter of the Lead Independent Director is available on the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com.

 

In addition, the Board has three standing committees, each of which is comprised solely of independent directors and led by an independent chair. These committees are discussed in detail below and under the heading “Board Committees.”

 

Policies Governing Director Nominations

 

Director Qualifications and Consideration of Diversity

 

The Nominating and Corporate Governance Committee is responsible for reviewing with the Board, from time to time, the appropriate qualities, skills and characteristics desired of Board members in the context of the current make-up of the Board. This assessment includes consideration of the following minimum qualifications that the Nominating and Corporate Governance Committee believes must be met by all directors:

 

directors must be of high ethical character and share the values of the Company as reflected in the Company’s Code of Business Conduct and Ethics applicable to all directors, officers and employees;

 

directors must have reputations, both personal and professional, consistent with the image and reputation of the Company;

 

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directors must have the ability to exercise sound business judgment; and

 

directors must have substantial business or professional experience and be able to offer advice and guidance to the Company’s management based on that experience.

 

Although the Company does not have a formal diversity policy, the Company and the Nominating and Corporate Governance Committee endeavor to have a Board representing diverse viewpoints with broad experience in areas important to the operation of our Company such as business, science, medicine and finance/accounting. In this context, the Nominating and Corporate Governance Committee, in addition to the minimum qualifications set forth above, also considers a variety of attributes in selecting nominees to the Board, such as:

 

an understanding of, and experience in, the biotechnology and pharmaceutical industries;

 

an understanding of, and experience in, accounting oversight and governance, finance and marketing;

 

leadership experience with public companies or other significant organizations;

 

international experience; and

 

diversity of age, gender, culture and professional background.

 

These factors and others are considered useful by the Board and are reviewed in the context of an assessment of the perceived needs of the Board at a particular point in time.

 

Board members are expected to prepare for, attend and participate in all Board meetings, meetings of Board committees on which they serve and the Company’s annual general meeting of shareholders. In addition, directors should stay abreast of the Company’s business and markets. The Company’s Chief Legal Officer and the Chief Financial Officer will be responsible for assuring the orientation of new directors, and for periodically providing materials or briefing sessions for all directors on subjects that would assist them in discharging their duties. The Nominating and Corporate Governance Committee regularly reviews other potential educational topics for the Board and provides its recommendation to the Board as to whether other educational measures are appropriate. The Company provides opportunities for directors to visit Company facilities in order to provide greater understanding of the Company’s business and operations. The Nominating and Corporate Governance Committee facilitates the annual Board and Board committee evaluations. The Board performs an annual self-evaluation, including individual director self-assessments, and each Board committee performs an annual self-evaluation to regularly assess the committee’s and each of its member’s effectiveness and each of its member’s contribution to the committee. Such assessments consider, in the case of the Board or a Board committee, its charter or governing document(s), and, in the case of an individual director, the applicable position description(s), as well as the competencies and skills each individual director is expected to bring to the Board.

 

Each Board member is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as a director. Board members should not hold more than six directorships (including such member’s seat on the Company’s Board), excluding for this purpose, not-for-profit organizations, trade organizations and related organizations, unless otherwise agreed to by the Nominating and Corporate Governance Committee. These other commitments will be considered by the Nominating and Corporate Governance Committee and the Board when reviewing Board candidates. Directors are expected to report changes in their primary business or professional association, including retirement, to the Chairman of the Board and the chair of the Nominating and Corporate Governance Committee.  The Nominating and Corporate Governance Committee, in consultation with the Chairman of the Board, will consider any effects these changes may have on the effectiveness of the director’s contribution to the work of the Board.

 

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Process for Identifying and Evaluating Director Nominees

 

The Board is responsible for selecting its own members to stand for election. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board and management will be requested to take part in the process as appropriate.

 

Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the Nominating and Corporate Governance Committee. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board’s approval as director nominees for election to the Board.  The Nominating and Corporate Governance Committee also recommends candidates for the Board’s appointment to the committees of the Board.

 

Procedure for Recommendation of Director Nominees by Shareholders

 

The Nominating and Corporate Governance Committee will consider director candidates who are recommended by shareholders of the Company. Shareholders, in submitting recommendations to the Nominating and Corporate Governance Committee for director candidates, shall follow the procedures set forth below.

 

The Nominating and Corporate Governance Committee must receive any such recommendation for nomination not later than the close of business on the 120th day, nor earlier than the close of business on the 180th day, prior to the first anniversary of the date that the proxy statement was released to shareholders in connection with the Company’s preceding year’s annual general meeting of shareholders.

 

Such recommendation for nomination must be in writing and include the following:

 

all information relating to the individual recommended for consideration as a director nominee that would be required to be disclosed in solicitations of proxies for the election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act, or any successor provisions thereto (including the director nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if approved by the Board and elected);

 

name and address of the individual recommended for consideration as a director nominee;

 

the principal occupation of the individual recommended for consideration as a director nominee;

 

as to the shareholder making the recommendation: 

 

oname and address of such shareholder, as such may appear on the Company’s Register of Members;

 

othe class and number of shares that are owned beneficially and/or of record by such shareholder;

 

oa representation that such shareholder is a registered holder of shares entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such nomination;

 

oa statement as to whether such shareholder intends or is part of a group that intends (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding share capital required to approve or elect the nominee and/or (ii) otherwise to solicit proxies from shareholders in support of such nomination;

 

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othe total number of shares that will be voted for the individual recommended for consideration as a director nominee by such shareholder; and

 

oa written statement from such shareholder stating why such director nominee would be able to fulfill the duties of a director.

 

The Nominating and Corporate Governance Committee may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Company, including such evidence satisfactory to the Nominating and Corporate Governance Committee that such nominee has no interests that would limit such nominee’s ability to fulfill his or her duties as a director. If the shareholder making such director nomination does not appear, either directly or through a qualified representative, at the annual general meeting of shareholders, then such nomination shall be disregarded. Nominations must be sent to the attention of the Secretary of the Company by one of the two methods listed below:

 

By mail (including courier or expedited delivery service to):

 

Alkermes plc

Connaught House

1  Burlington Road

Dublin 4, Ireland

Attn: Secretary of Alkermes plc

 

By facsimile to:

 

+ 353 1 772 8001

Attn: Secretary of Alkermes plc

 

The Secretary of the Company will promptly forward any such nominations to the Nominating and Corporate Governance Committee.  Once the Nominating and Corporate Governance Committee receives the nomination of a candidate, the candidate will be evaluated and a recommendation with respect to such candidate will be delivered to the Board. Nominations not made in accordance with the foregoing policy shall be disregarded by the Nominating and Corporate Governance Committee and votes cast for such nominee shall not be counted.

 

Composition and Responsibilities of the Board

 

The Company’s business, property and affairs are managed under the direction of the Board. Members of the Board are kept informed of the Company’s business through discussions with the Chief Executive Officer and other officers of the Company, by reviewing materials provided to them, by visiting the Company’s locations and by participating in meetings of the Board and its committees and the Company’s annual general meeting of shareholders.

 

Size of the Board

 

The Board has been given the authority under our Articles of Association to set the size of the Board. The Board has set the Board size to eight and the Board currently consists of eight members. The Board periodically reviews the appropriate size of the Board and, in accordance with our Articles of Association, this number may be adjusted from time to time by the Board.

 

Board Compensation

 

It is the general policy of the Board that Board compensation should be a mix of cash and equity-based compensation. Full-time employee directors will not be paid for Board membership in addition to their regular employee compensation. Independent directors may not receive consulting, advisory or other compensatory fees from the Company if the receipt of such fees would result in disqualifying the director as an “independent” director in accordance with the applicable provisions of the Exchange Act, the rules promulgated thereunder and the applicable rules of Nasdaq.

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To the extent practicable or required by applicable rule or regulation, independent directors who are affiliated with the Company’s service providers or partners or collaborators will undertake to ensure that their compensation from such providers or partners or collaborators does not include amounts connected to payments by the Company. The Compensation Committee periodically reviews director compensation in consultation with its independent compensation consultant and makes recommendations regarding director compensation to the Board based on comparable market data for director compensation.

 

Board’s Role in Risk Oversight

 

Assessing and managing risk is the responsibility of our management and our Board oversees and reviews various aspects of the Company’s risk management efforts. The Board executes its oversight responsibility for Company risk management directly and through its Board committees, as set forth below.

 

Each year, the Board holds a meeting with the Chairman of the Board and Chief Executive Officer to discuss and review our mid- to long-term operating plans and overall corporate strategy, including a discussion of key risks to the plans and strategy and ways to mitigate such risks. The involvement of the Board in reviewing, and providing feedback on, our business strategy is critical to the determination of the types and appropriate levels of risk undertaken by the Company. In addition, on an informal basis and as part of the regularly scheduled Board meetings, the Board discusses and provides feedback regarding the strategic direction and the issues and opportunities facing our Company in light of trends and developments in the industry and the general business environment. In addition, the Company’s Chief Risk Officer provides an annual overview to the Board of the results of the Company’s annual enterprise risk management assessment, which is discussed in greater detail annually by the Audit and Risk Committee, as described below.

 

The Audit and Risk Committee is responsible for overseeing our financial, accounting and enterprise risk management programs and policies, as set forth in its charter. As part of fulfilling these responsibilities, the Audit and Risk Committee meets regularly with PwC,  our independent auditor and accounting firm, and members of management and others, including our Chief Financial Officer and members of our legal and financial compliance departments, to assess the integrity of our financial reporting processes, internal controls and actions taken to monitor and control risks related to such matters. The Audit and Risk Committee also regularly meets with PwC in executive session, without management present. The Board and Audit and Risk Committee receive regular assessments from management as to our policies and internal procedures designed to promote compliance with laws and regulations affecting our business and the results of our internal auditing and monitoring practices in this regard. In addition, the Audit and Risk Committee engages in a regular review of our enterprise risk management process and discusses, on an as-needed basis, any risks identified by such process or otherwise identified, including an evaluation of any such risks and mitigation activities put in place in reference thereto. On an ongoing basis, members of the Audit and Risk Committee have direct access to our Chief Administrative Officer, who serves as Chief Risk Officer of the Company and who is responsible for our enterprise risk management process.

 

The Compensation Committee is responsible for reviewing and evaluating risks related to our compensation programs, policies and practices. For additional discussion of the Company’s efforts to manage compensation-related risks, see the discussion under the heading “Risk Assessment of Compensation Policies and Practices.”

 

The Nominating and Corporate Governance Committee is responsible for reviewing our governance practices, policies and programs, including director and management succession planning, recruiting and other areas that may impact our risk profile from a governance perspective.

 

The Board has adopted a Compliance Policy Statement, pursuant to Section 225 of the Companies Act, applicable to 2016 and subsequent years. On an annual basis, our directors will review the Company’s arrangements and structures intended to secure material compliance with the Company’s obligations under Irish corporate and tax laws.

 

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In performing their risk oversight functions, each Board committee has full access to management, as well as the ability to engage outside advisors.

 

Succession Plan

 

The Chairman of the Board reviews succession planning and management development with the Board or directors designated by the Board on an annual basis.

 

Scheduling and Selection of Agenda Items for Board Meetings

 

In-person Board meetings are scheduled in advance at least four times a year. Furthermore, additional Board meetings may be called upon appropriate notice at any time to address specific needs of the Company. Each director may propose the inclusion of items on the agenda, request the presence of, or a report by, any member of the Company’s management, or at any Board meeting raise subjects that are not on the agenda for that meeting. The Lead Independent Director approves the Board agenda in advance of the meeting. The Board may also take action from time to time by unanimous written consent.

 

The meetings of the Board are typically held at the Company’s headquarters in Dublin, Ireland, but occasionally meetings may be held at other locations at the discretion of the Board.

 

Board Committees

 

The Company currently has three standing committees: Audit and Risk,  Compensation, and Nominating and Corporate Governance. There will, from time to time, be occasions on which the Board may form a new committee or disband a current committee depending upon the circumstances. The Audit and Risk,  Compensation and Nominating and Corporate Governance Committees are each composed entirely of independent directors.

 

Each standing committee of the Board has a written charter, approved by the Board, which describes the committee’s general authority and responsibilities. A current copy of each charter is available on the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com. Each standing committee of the Board undertakes an annual review of its charter and works with the Board to make such revisions as are considered appropriate.

 

Each committee of the Board has the authority to engage outside experts, advisors and counsel to the extent it considers appropriate to assist the Board committee in its work.

 

Assignment of Committee Members

 

The Board is responsible for the appointment of committee members. The Nominating and Corporate Governance Committee recommends candidates to the Board for appointment to the Board’s standing committees, as well as for the chairs of such committees.

 

Frequency and Length of Committee Meetings and Committee Agenda

 

The chair of each Board committee, in consultation with the Chairman of the Board and appropriate members of management, will determine the frequency and length of the committee meetings and develop the committee’s agenda. The agendas and meeting minutes of the Board committees are available to the full Board, and other Board members are welcome to attend Board committee meetings, except that non-independent directors are not permitted to attend the executive sessions of any Board committee.

 

Each Board committee regularly reports to the Board concerning such committee’s activities.

 

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Policies Governing Security Holder Communications with the Board

 

The Board provides to every security holder the ability to communicate with the Board as a whole, and with individual directors on the Board, through an established process for security holder communication (as that term is defined by the rules of the SEC) as follows:

 

For communications directed to the Board as a whole, security holders may send such communications to the attention of the Chairman of the Board through one of the two methods listed below:

 

By mail (including courier or expedited delivery service) to:

 

Alkermes plc

Connaught House

1  Burlington Road

Dublin 4, Ireland

Attn: Chairman of the Board of Directors

 

By facsimile at:

 

+ 353 1 772 8001

Attn: Chairman of the Board of Directors

 

For security holder communications directed to an individual director in his or her capacity as a member of the Board, security holders may send such communications to the attention of the individual director through one of the two methods listed below:

 

By mail (including courier or expedited delivery service) to:

 

Alkermes plc

Connaught House

1  Burlington Road

Dublin 4, Ireland

Attn: [Name of Individual Director]

 

By facsimile at:

 

+ 353 1 772 8001

Attn: [Name of Individual Director]

 

The Company will forward any such security holder communications to the Chairman of the Board, as a representative of the Board, and/or to the director to whom the communication is addressed. The Company will forward such communication by certified mail to an address specified by each director and the Chairman of the Board for such purposes or by secure electronic transmission.

 

Policy Governing Director Attendance at Annual General Meetings of Shareholders

 

The Board adopted a policy that all directors and all nominees for election as directors attend the Company’s annual general meetings of shareholders in person. All directors attended the Company’s 2016 Annual General Meeting of Shareholders.

 

Code of Ethics

 

The Company has adopted a “code of ethics” (as defined by the regulations promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act) that applies to all of the Company’s directors and

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employees, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Company’s Code of Business Conduct and Ethics also meets the requirements of a “code of conduct” (as defined by the rules of Nasdaq) and is applicable to all of the Company’s officers, directors and employees. A current copy of the Code of Business Conduct and Ethics is available on the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com. We intend to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on our website. A copy of the Code of Business Conduct and Ethics may also be obtained, free of charge, from the Company upon request directed to: Alkermes plc, Attention: Investor Relations, Connaught House, 1 Burlington Road, Dublin 4, Ireland.

 

Members of the Board shall act at all times in accordance with the requirements of the Company’s Code of Business Conduct and Ethics, which shall be applicable to each director in connection with his or her activities relating to the Company. This obligation shall at all times include, without limitation, adherence to the Company’s policies with respect to conflicts of interest, confidentiality, protection of the Company’s assets, interactions with government officials and healthcare professionals, ethical conduct in business dealings and respect for and compliance with applicable law. Any waiver of the requirements of the Code of Business Conduct and Ethics with respect to any individual director or any executive officer shall be reported to, and be subject to the approval of, the Board.

 

For more corporate governance information, you are invited to access the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com.

 

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THE BOARD OF DIRECTORS AND ITS COMMITTEES

 

Our Board held four meetings during 2016. Each of the Company’s directors attended at least 75% of the aggregate of all meetings of the Board and the committee(s) on which such director served during 2016. The standing committees of the Board are the Audit and Risk Committee, the Nominating and Corporate Governance Committee and the Compensation Committee.

 

Audit and Risk Committee

 

The Audit and Risk Committee consists of Paul J. Mitchell, Floyd E. Bloom, M.D. and Robert A. Breyer, each of whom is independent as defined by Rule 5605(a)(2) and as required under Rule 5605(c)(2) of Nasdaq’s  listing standards, as well as under the applicable requirements of the Exchange Act. Mr. Mitchell is the chair of the Audit and Risk Committee. In compliance with the Sarbanes-Oxley Act of 2002, the entire Board determined, based on all available facts and circumstances, that Mr. Mitchell and Mr. Breyer are “audit committee financial experts” as defined by the SEC. The Audit and Risk Committee held five meetings during 2016. 

 

The Audit and Risk Committee operates under a written charter adopted by the Board, a current copy of which can be found on the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com. Under the terms of its current charter, the Audit and Risk Committee’s  responsibilities include: (1) appointing, compensating and retaining our independent accounting firm, (2) overseeing the work performed by any independent accounting firm, (3) assisting the Board in fulfilling its responsibilities by: (i) reviewing the financial reports we provide to the SEC,  our shareholders or to the general public, (ii) reviewing our internal financial and accounting controls and (iii) reviewing all related-party transactions, (4) overseeing the procedures of the Company designed to improve the quality and reliability of the disclosure of our financial condition and results of operations, (5) assessing and providing oversight to management relating to the identification and evaluation of major strategic, operational, regulatory, compliance and external risks inherent to our business and (6) reviewing procedures of the Company designed to facilitate: (i) the receipt, retention and treatment of complaints relating to accounting, internal accounting controls or auditing matters and (ii) the receipt of confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. The Audit and Risk Committee will engage advisers as necessary, distribute relevant funding provided by the Company, and serve as the Qualified Legal Compliance Committee in accordance with Section 307 of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC thereunder. Additionally, the Audit and Risk Committee is responsible for approving, in advance, any and all audit and non-audit services to be performed by PwC.  All services provided by PwC during 2016 were pre-approved by the Audit and Risk Committee.

 

Nominating and Corporate Governance Committee

 

The members of the Nominating and Corporate Governance Committee are Wendy L. Dixon, Ph.D., Robert A. Breyer and Nancy J. Wysenski, each of whom is independent as defined in Rule 5605(a)(2) of the Nasdaq listing standards. Dr. Dixon is the chair of the Nominating and Corporate Governance Committee.  The Nominating and Corporate Governance Committee held five meetings during 2016.

 

The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board, a current copy of which can be found on the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com. Under the terms of its current charter, the Nominating and Corporate Governance Committee’s responsibilities include: (1) identifying individuals qualified to become members of the Board and recommending that the Board select the director nominees for election, (2) periodically reviewing our Code of Business Conduct and Ethics applicable to all directors, officers and employees and the Company’s Share Ownership and Holding Guidelines, (3) monitoring compliance with the Code of Business Conduct and Ethics and the Company’s Share Ownership and Holding Guidelines, (4) periodically reviewing the Company’s  Corporate Governance Guidelines and related matters, and (5) reviewing all shareholder proposals submitted to the Company and recommending appropriate action to the Board.

 

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Compensation Committee

 

The members of the Compensation Committee are David W. Anstice, Paul J. Mitchell and Nancy J. Wysenski, each of whom is independent as defined in Rule 5605(a)(2) of the Nasdaq listing standards. Mr. Anstice is the chair of the Compensation Committee. The Compensation Committee held 13 meetings during 2016. In determining the members of the Compensation Committee, the Board considers whether the members qualify as “non-employee directors” as defined in Rule 16b-3 under the Exchange Act and as “outside directors” as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

The Compensation Committee operates under a written charter adopted by the Board, a current copy of which can be found on the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com. Under the terms of its current charter, the Compensation Committee’s responsibilities include: (1) discharging the Board’s responsibilities relating to the compensation of our executives, (2) administering our incentive compensation and equity plans, (3) producing an annual report on executive compensation for inclusion in our proxy statement in accordance with applicable rules and regulations, (4) reviewing and discussing with our management our executive compensation disclosure (including our disclosure under “Executive Compensation—Compensation Discussion and Analysis”) included in reports and registration statements filed with the SEC, (5) directing the appointment and compensation, and overseeing the work, of any compensation consultant, legal counsel or other adviser retained by the Compensation Committee, with the Company required to provide for appropriate funding, as determined by the Compensation Committee, for payment of reasonable compensation to any such compensation consultant, legal counsel or other adviser, and (6) evaluating and recommending to the Board appropriate compensation for our directors and ensuring proper disclosure of payments to our directors other than in their capacity as directors. The Compensation Committee also administers the Company Clawback Policy. 

 

The Compensation Committee has established procedures for the grant of equity awards to eligible new employees. The Limited Compensation Sub-Committee, consisting of David W. Anstice, acted by unanimous written consent during 2016. In February 2017, the Compensation Committee delegated to the Limited Compensation Sub-Committee the authority to make individual grants of equity awards, up to the limit of its authority, to employees of the Company who are not subject to the reporting requirements of the Exchange Act and who are below the level of Vice President of the Company. The Limited Compensation Sub-Committee has the authority to approve new hire employee equity awards of up to 25,000 shares per individual grant to such eligible employees.

 

The Limited Compensation Sub-Committee will grant equity awards to eligible new hires, within the limits of its authority, on the first Wednesday following the first Monday of each month (or the first business day thereafter if such day is a holiday), also known as the New Hire Grant Date, for all eligible new hires beginning their employment the prior month. New hire grants that exceed the authority of the Limited Compensation Sub-Committee will be granted on the New Hire Grant Date or, if not possible, as soon as practicable thereafter, by the Compensation Committee as a whole.

 

Compensation Committee Interlocks and Insider Participation

 

During 2016,  David W. Anstice (Chair), Paul J. Mitchell and Nancy J. Wysenski served on the Compensation Committee.

 

During 2016, none of our executive officers served as: (i) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Board’s Compensation Committee; (ii) a director of another entity, one of whose executive officers served on our Board’s Compensation Committee; or (iii) a member of the compensation committee (or other committee of the board performing equivalent functions or, in the absence of any such committee, the entire board) of another entity, one of whose executive officers served as our director.

 

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PROPOSAL 2

 

ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

(Ordinary resolution)

 

Our Compensation Discussion and Analysis, which appears later in this proxy statement, describes our executive compensation program and the compensation decisions that the Compensation Committee made with respect to the compensation of our named executive officers for 2016. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. As required pursuant to Section 14A of the Exchange Act,  our Board is asking that shareholders cast a non-binding, advisory vote FOR the following resolution:

 

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, and related compensation tables and narrative discussion.”

 

Our Board is asking that shareholders support this Proposal 2. Although the vote you are being asked to cast is advisory, and therefore non-binding, we value the views of our shareholders, and the Compensation Committee will consider the outcome of the vote when making future compensation decisions for our named executive officers. Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of this Proposal 2 because they are not considered as votes cast.

 

In 2016,  we submitted our executive compensation program to an advisory vote of our shareholders, and it received the support of over 92% of the total votes cast at our 2016 Annual General Meeting of Shareholders.

 

Our Board will hold a non-binding, advisory vote of our shareholders on our executive compensation program and the compensation decisions that the Compensation Committee made with respect to the compensation of our named executive officers every year until the next required shareholder vote on the frequency of such advisory vote. The next shareholder vote on the frequency of such advisory vote currently is expected to be held at our 2018 Annual General Meeting of Shareholders.

 

The Board unanimously recommends that you vote FOR the advisory vote on executive compensation.

 

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PROPOSAL 3

 

NON-BINDING RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

AND ACCOUNTING FIRM AND

BINDING AUTHORIZATION OF AUDIT AND RISK COMMITTEE

TO SET INDEPENDENT AUDITOR AND ACCOUNTING FIRM’S REMUNERATION

 

(Ordinary resolution)

 

PwC served as our independent auditor and accounting firm for 2016. The Audit and Risk Committee reviewed and discussed the performance of PwC as the Company’s independent auditor and accounting firm for 2016. Following such review and discussion, the Audit and Risk Committee of the Board has retained PwC to serve as the Company’s independent auditor and accounting firm for the fiscal year ending December 31, 2017. Although we are not required to submit the appointment of PwC for shareholder approval, as a matter of good corporate governance, the Board, upon the recommendation of the Audit and Risk Committee, has determined to submit its selection for ratification by shareholders and to ask that shareholders authorize the Audit and Risk Committee to set the independent auditor and accounting firm’s remuneration. If the selection of PwC is ratified, the Audit and Risk Committee, in its discretion, may still select a different independent auditor and independent accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders. As required under Irish law, the resolution in respect of this Proposal 3 is an ordinary resolution that requires the affirmative vote of the majority of the votes cast (meaning the number of shares voted “for” this Proposal 3 must exceed the number of shares voted “against” this Proposal 3).  Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of this Proposal 3 because they are not considered as votes cast.

 

A representative of PwC is expected to be present at the Annual Meeting and will be given the opportunity to make a statement, if he or she so desires, and to respond to appropriate questions.

 

The text of the resolution in respect of Proposal 3 is as follows:

 

“RESOLVED, to ratify, on a non-binding, advisory basis, the appointment of PricewaterhouseCoopers LLP as the independent auditor and accounting firm of Alkermes plc and to authorize, in a binding vote, the Audit and Risk Committee to set such independent auditor and accounting firm’s remuneration.”

 

The Board unanimously recommends that you vote FOR the non-binding ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditor and accounting firm for the fiscal year ending December 31, 2017 and the binding authorization of the Audit and Risk Committee of the Board to set the independent auditor and accounting firm’s remuneration.

 

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PROPOSAL 4

 

APPROVAL OF

ALKERMES PLC 2011 STOCK OPTION AND INCENTIVE PLAN, AS AMENDED

(Ordinary resolution)

 

Overview

 

Our Board is requesting shareholder approval of the Alkermes plc 2011 Stock Option and Incentive Plan, as amended and effective as of the date of this proxy statement (the “2011 Plan”), as amended by this Proposal 4 to increase the number of ordinary shares authorized for issuance thereunder by 3,000,000 (subject to adjustment for stock splits, stock dividends and similar events). If approved by shareholders, the maximum number of ordinary shares authorized for issuance pursuant to future awards under the 2011 Plan will be the remaining shares available for issuance under the 2011 Plan at the time of shareholder approval, plus 3,000,000.

 

Shareholder approval of the 2011 Plan, as amended by this Proposal 4, will also serve to approve the performance measures set forth in the 2011 Plan, as further described below under the section entitled “Qualified Performance-Based Compensation under Code Section 162(m).

 

As of March 20, 2017, 6,941,050 ordinary shares remained available for future issuance under the 2011 Plan and the Alkermes plc Amended and Restated 2008 Stock Option and Incentive Plan (the “2008 Plan” and, together with the 2011 Plan, the “Equity Plans”). While additional shares may become available under our Equity Plans, such as through employee terminations, this number is not expected to be material.

 

As of March 20, 2017, an aggregate of 15,248,569 ordinary shares are issuable upon exercise of outstanding options with a weighted average exercise price of $35.30 and a weighted average remaining term of 6.41 years. As of March 20, 2017, 3,178,697 ordinary shares are subject to unvested restricted stock unit awards, of which 2,144,104 are time-based restricted stock unit awards and 1,034,593 are performance-based restricted stock unit awards. As of March 20, 2017, we have a total of 153,058,430 ordinary shares issued and outstanding. We have no restricted stock awards outstanding.

 

The Alkermes plc 2011 Stock Option and Incentive Plan was adopted by our Board on September 16, 2011, with subsequent amendments adopted by our Board on October 5, 2011 and October 31, 2011. The Alkermes plc 2011 Stock Option and Incentive Plan, as so amended, was approved by our shareholders on December 8, 2011. Our shareholders approved an amendment to such plan on August 1, 2012 and subsequently approved the Alkermes plc 2011 Stock Option and Incentive Plan, as so amended, in an amended and restated form, on August 1, 2013, May 28, 2014 and May 25, 2016.

 

The 2011 Plan, as amended in accordance with this Proposal 4, is attached as Appendix A to this proxy statement and is incorporated herein by reference.

 

Why do we believe our shareholders should approve our 2011 Plan, as amended by this Proposal 4, to increase the number of shares authorized for issuance thereunder?

 

1.We believe the size of our share reserve increase request is reasonable.

 

We expect our request will provide us with sufficient ordinary shares to support between one and two years of equity awards at our current market value. Equity awards are key to attracting and retaining employees integral to the successful development of our clinical pipeline, the commercialization of our products and the accomplishment of transformative business transactions. Our compensation philosophy with respect to equity is to target the 50th percentile by value, as determined using the Black-Scholes option pricing model and market prices for restricted stock unit awards, of our comparable peer group, with the opportunity to increase or decrease the value of equity from the 50th percentile based upon performance.

 

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2.Equity awards are integral to our compensation program and to our success.

 

a.We are preparing for the launch of ALKS 5461, our once-daily, oral sublingual investigational medicine in development for the adjunctive treatment of Major Depressive Disorder.  We continue to commercialize VIVITROL, for alcohol and opioid dependence, and ARISTADA, the newest long-acting atypical antipsychotic entrant in a competitive market. We seek to attract, hire and retain qualified and highly skilled personnel with marketed product experience. Competition for such personnel in our industry and the geographic regions in which we operate is intense, with numerous companies also launching or marketing products, including products that compete directly with our products.

 

b.We are expanding our non-clinical, pre-clinical and clinical research and development efforts and are advancing product candidates in our development pipeline through pre-clinical and clinical-stage testing. As we complete clinical activities, establish new development programs, and advance our product candidates to the next phase of development, we are actively expanding our research and development functions with qualified and highly skilled personnel. Competition for research and development personnel in our industry and the geographic regions in which we operate is intense, with competition for individuals skilled in our areas of focus exceptionally so.

 

c.Equity awards have been and, we believe, will continue to be, an integral component of our overall compensation program, enabling us to attract qualified and skilled employees and directors, retain our existing employees, including our experienced management team, and provide incentives for our employees to exert maximum efforts for our success, ultimately contributing to an increase in shareholder value.

 

3.We believe we have responsibly utilized our equity compensation to align employee interests with those of our shareholders to achieve and sustain share price growth.

 

Our three- and five-year shareholder returns were approximately 36.7% and 220.2%, respectively, for the periods ended December 31, 2016.

 

4.We manage our equity award use carefully.

 

a.As of March 20, 2017, our full dilution, which is calculated as (shares available for grant + shares subject to outstanding equity awards) / (shares outstanding + shares available for grant + shares subject to outstanding equity awards), is 14.2%. This is despite the fact that a majority of the ordinary shares underlying our outstanding stock option awards are subject to vested, yet unexercised, options, approximately 90% of which have a weighted average exercise price less than the closing price of our ordinary shares as of March 20, 2017. See the Outstanding Stock Option Awards table on the following page. We believe that this is a bullish indicator as to executive and employee confidence in the future of the Company and provides them with added incentive to increase the ordinary share price and create shareholder value.

 

b.Our historical adjusted average burn rate for the prior three fiscal periods, as calculated by ISS Corporate Solutions, or ISS, is 2.74%, which is well below the 6.53% cap that ISS applies to companies listed on the Russell index in our Global Industry Classification Standard, or GICS, industry group. Our average unadjusted burn rate for the same period is 2.39%.

 

c.Our burn rate for 2016, on an adjusted and unadjusted basis, was 3.64% and 2.83%, respectively.

 

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The following table sets forth our historic use of equity in 2016, 2015 and 2014:

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

    

2016

    

2015

    

2014

 

Stock options granted

    

2,750,800

 

2,697,610

 

2,036,300

 

Time-based restricted stock units granted

 

1,264,425

 

684,915

 

676,475

 

Performance-based restricted stock units earned

 

270,409

 

299,783

 

 —

 

Weighted average ordinary shares outstanding

 

151,483,626

 

149,206,423

 

145,273,728

 

 

Outstanding Stock Option Awards

 

The following table provides supplementary information with respect to stock options outstanding as of March 20, 2017.  Approximately 90% of the exercisable options listed below have a weighted average exercise price less than the closing price of our ordinary shares on Nasdaq on December 30, 2016.

 

 

 

 

 

 

 

 

 

 

 

 

Year Granted

    

Options Outstanding

    

Options Exercisable

    

 

Weighted Average Exercise Price

    

Weighted Average Contractual Term (in Years)

 

 

 

 

 

 

 

 

 

 

 

 

12 Months Ended December 31, 2017 *

 

1,386,675

 

 —

 

$

54.70

 

9.91

 

12 Months Ended December 31, 2016

 

2,681,675

 

696,474

 

$

36.22

 

9.03

 

12 Months Ended December 31, 2015

 

2,263,620

 

990,685

 

$

67.99

 

8.08

 

12 Months Ended December 31, 2014

 

1,680,784

 

1,182,209

 

$

46.86

 

7.09

 

9 Months Ended December 31, 2013

 

1,545,196

 

1,185,071

 

$

33.67

 

6.23

 

12 Months Ended March 31, 2013

 

1,447,040

 

1,447,040

 

$

16.78

 

5.19

 

12 Months Ended March 31, 2012

 

1,391,570

 

1,391,570

 

$

17.30

 

4.26

 

12 Months Ended March 31, 2011

 

895,756

 

895,756

 

$

12.17

 

3.24

 

12 Months Ended March 31, 2010

 

1,108,088

 

1,108,088

 

$

8.95

 

2.47

 

12 Months Ended March 31, 2009

 

534,758

 

534,758

 

$

12.08

 

1.37

 

12 Months Ended March 31, 2008

 

313,407

 

313,407

 

$

15.68

 

0.39

 

 

 

15,248,569

 

9,745,058

 

 

 

 

 

 

 

            

            

 

*  

Reflects option awards granted through March 20, 2017. This includes annual equity awards made to employees on February 17, 2017.

 

Important Aspects of our 2011 Plan Designed to Protect our Shareholders’ Interests

 

The 2011 Plan contains certain provisions designed to protect our shareholders’ interests and reflect corporate governance best practices including those set forth below, which are qualified in their entirety by the “Summary of the 2011 Plan” and the full text of the 2011 Plan, as amended in accordance with this Proposal 4, attached hereto as Appendix A.

 

Shareholder approval is required for additional shares.  The 2011 Plan does not contain an annual “evergreen” provision. Thus, shareholder approval is required each time we need to increase the share reserve, allowing our shareholders the ability to have a say on our equity compensation programs.

 

Share counting provisions.  The share reserve under the 2011 Plan is reduced one share for each ordinary share issued pursuant to an option and 1.8 ordinary shares for each ordinary share issued pursuant to a full value award. This helps to ensure that management and the Compensation Committee are using the share reserve effectively and with regard to the value of each type of equity award. The 2011 Plan also prohibits liberal share recycling, meaning shares tendered or held back upon exercise of an option or settlement of an award to cover the exercise price or tax withholding are not available for future issuance under the 2011 Plan.

 

Submission of 2011 Plan amendments to shareholders.  The 2011 Plan requires shareholder approval for material amendments to the 2011 Plan, including, as noted above, any increase in the number of shares reserved for issuance under the 2011 Plan.

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Flexibility in designing equity compensation scheme.  The 2011 Plan allows us to provide a broad array of equity incentives, including traditional option grants, restricted stock awards,  restricted stock unit awards, performance stock awards and cash awards. By providing this flexibility, we can quickly and effectively react to trends in compensation practices and continue to offer competitive compensation arrangements to attract and retain the talent necessary for the success of our business.

 

No right to vote or receive dividends.  Until shares are delivered in accordance with the 2011 Plan, no right to vote or receive dividends or any other rights of a shareholder will exist with respect to shares to be issued in connection with equity awards.

 

No option or SAR repricing.  The 2011 Plan explicitly prohibits repricing options or stock appreciation rights in any manner without shareholder approval, including cancelling awards in exchange for cash or another award.

 

No automatic equity grants.  The 2011 Plan does not include automatic initial (upon becoming a member of the Board) or annual grants of equity to directors.

 

Minimum 1-year vesting requirement.  Under the 2011 Plan, options are not exercisable, and restricted stock awards and restricted stock unit awards do not vest, until at least one year from the grant date, and restricted stock and restricted stock units with time-based vesting cannot fully vest until at least three years from the grant date.

 

Equity Clawback.  Equity awards granted to our named executive officers under the 2011 Plan are subject to our clawback policy, as in effect from time to time. A current copy of the Clawback Policy can be found on the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com.

 

Change in Control.  Under the terms of our 2011 Plan, the Administrator (as defined below) has the authority to determine the conditions under which any award under the 2011 Plan will become exercisable or vested in the event of a Sale Event (as defined in the 2011 Plan) at the time of grant of such award.

 

Required Vote

 

Approval of the 2011 Plan, as amended by this Proposal 4, requires the affirmative vote of the majority of the votes cast by shareholders (meaning the number of shares voted “for” this Proposal 4 must exceed the number of shares voted “against” this Proposal 4).  Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of this Proposal 4 because they are not considered as votes cast.

 

Recommendation

 

The text of the resolution in respect of Proposal 4 is as follows:

 

“RESOLVED, that the Alkermes plc 2011 Stock Option and Incentive Plan, as amended, be APPROVED.”

 

The Board unanimously recommends that you vote FOR approval of the 2011 Plan, as amended.

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Principal Features of the 2011 Plan

 

The material features of the 2011 Plan are as set forth below:

 

The 2011 Plan will be administered by either the Compensation Committee of the Board or by a similar committee performing the functions of the Compensation Committee and which is comprised of not less than two independent, non-employee directors (in either case, the “Administrator”). The Administrator, in its discretion, may grant a variety of incentive awards based on our ordinary shares. The Administrator may delegate its authority and duties with respect to the granting of awards to a subcommittee of one or more members of the Board.

 

The award of stock options (both incentive and non-qualified options), restricted stock unit awards,  restricted stock awards, cash-based awards and performance share awards is permitted.

 

For purposes of determining the number of our ordinary shares available for issuance under the 2011 Plan, (a) the grant of any full value award (i.e., an award other than a stock option) is deemed as an award of 1.8 ordinary shares for each such ordinary share actually subject to the award and shall be treated similarly if returned to reserve status when forfeited or canceled under the 2011 Plan, and (b) the grant of a stock option is deemed as an award of one ordinary share for each such ordinary share actually subject to the award.

 

Our Board may at any time amend or discontinue the 2011 Plan, and the Administrator may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. Additionally, no option or stock appreciation right may be repriced in any manner without shareholder approval. Any amendments that materially change the terms of the 2011 Plan, including any amendments that increase the number of shares reserved for issuance under the 2011 Plan, expand the types of awards available, materially expand the eligibility to participate in, or materially extend the term of, the 2011 Plan, or materially change the method of determining the fair market value of our ordinary shares, will be subject to approval by our shareholders. Amendments shall also be subject to approval by our shareholders if and to the extent determined by the Administrator to be required by the Code to preserve the qualified status of incentive options or to ensure that compensation earned under the 2011 Plan qualifies as performance-based compensation under Section 162(m) of the Code.

 

Based solely on the closing price of our ordinary shares as reported on Nasdaq on March 20, 2017, the aggregate market value of the 31,649,500 shares, representing the maximum number of ordinary shares to be issued under the 2011 Plan, as amended in accordance this Proposal 4, is $1,889 million. Shares tendered or held back upon exercise of an option or settlement of an award to cover the exercise price or tax withholding are not available for future issuance under the 2011 Plan. The shares available for issuance by us under the 2011 Plan will be authorized, but unissued, shares.

 

Qualified Performance-Based Compensation Under Code Section 162(m)

 

To ensure that certain awards granted under the 2011 Plan to a “Covered Employee” (as defined in the Code) qualify as “performance-based compensation” under Section 162(m) of the Code, the 2011 Plan provides that the Administrator may require that the vesting or grant of such awards be conditioned on the satisfaction of performance criteria that may include any or all of the following: (1) earnings before interest, taxes, depreciation and amortization, (2) net income (loss) (either before or after interest, taxes, depreciation and/or amortization), (3) changes in the market price of our ordinary shares, (4) economic value-added, (5) initiation or completion of clinical trials, (6) results of clinical trials, (7) drug development or commercialization milestones, (8) collaboration milestones, (9) operational measures including production capacity and capability, (10) hiring and retention of key managers, (11) expense management, (12) capital-raising transactions, (13) sales or revenue, (14) acquisitions or strategic transactions, (15) operating income (loss), (16) cash flow (including, but not limited to, operating cash flow and free cash flow), (17) return on capital, assets, equity, or investment, (18) shareholder returns, (19) gross or net profit levels, (20) operating margins, (21) earnings (loss) per ordinary share and (22) sales or market shares, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.

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The Administrator will select, within 90 days following the commencement of a performance cycle, the particular performance criteria for such award and the performance goals with respect to each performance criterion. Each such award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. Subject to adjustments for stock splits and similar events, the maximum award granted to any one individual that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code will not exceed 4,000,000 ordinary shares for any performance cycle. If a performance-based award is payable in cash to any executive, it cannot exceed $25 million for any performance cycle.

 

Summary of the 2011 Plan

 

The following description of certain features of the 2011 Plan, as amended in accordance with this Proposal 4, is intended to be a summary only. The summary is qualified in its entirety by the full text of the 2011 Plan, as amended in accordance with this Proposal 4, attached hereto as Appendix A.

 

Plan Administration.    The Administrator has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2011 Plan. The Administrator may delegate to a subcommittee comprised of one or more members of the Board all or part of the Administrator’s authority and duties with respect to the granting of awards to employees who are not subject to the reporting and other provisions of Section 16 of the Exchange Act. Any such delegation by the Administrator shall include a limitation as to the amount of awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price, if applicable, and the vesting criteria.

 

Eligibility and Limitations on Grants.    Persons eligible to participate in the 2011 Plan will be those officers, employees, non-employee directors and other key persons (including consultants and prospective employees) of the Company and its subsidiaries as selected from time to time by the Administrator. The intention in making awards to eligible persons under the 2011 Plan will be to align the compensation of these individuals over a multi-year period directly with the interests of our shareholders and serve as a tool in the recruiting and retention of these individuals.

 

The maximum award of stock options granted to any one individual will not exceed 4,000,000 ordinary shares (subject to adjustment for stock splits and similar events) for any calendar-year period. The maximum number of ordinary shares that can be awarded in the form of incentive stock options under the 2011 Plan, as amended, will not exceed 31,649,500 (subject to adjustment for stock splits and similar events).

 

Stock Options Granted to Employees and Key Persons and Non-Employee Directors.    The 2011 Plan permits the granting of (1) stock options intended to qualify as incentive stock options under Section 422 of the Code and (2) stock options that do not so qualify. Options granted under the 2011 Plan will be non-qualified options if they fail to qualify as incentive options or exceed the annual limit on incentive stock options. Non-qualified options may be granted to any persons eligible to receive incentive options and to non-employee directors and key persons. The option exercise price of each option will be determined by the Administrator but may not be less than 100% of the fair market value of our ordinary shares on the date of grant.

 

The term of each option will be fixed by the Administrator and may not exceed ten years from the date of grant. Options may be subject to such conditions and restrictions as the Administrator may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified vesting period. The Administrator will determine at what time or times each option may be exercised. Options may be made exercisable in installments, provided they shall not be exercisable for a period of at least one year from the date of grant, and the exercisability of options may be accelerated by the Administrator. Options may be exercised in whole or in part with written or electronic notice to the Company’s delegate. Upon exercise of non-qualified stock options, unless otherwise determined by the Administrator, the purchase price must be paid through a net reduction in the number of ordinary shares issuable upon such exercise, based on the fair market value of our ordinary shares on the date of exercise. Upon exercise of incentive stock options and those non-qualified options for which the Administrator elects not to utilize the above payment method, the option exercise price may be paid in full either in cash, by certified or bank check or other instrument acceptable to the Administrator or by delivery (or attestation to the

34


 

ownership) of ordinary shares that are beneficially owned by the optionee based on the fair market value of our ordinary shares on the date of exercise or, subject to applicable law, by delivery to the Company of an exercise notice together with irrevocable instructions to a broker to promptly deliver cash or a check payable to the Company for the purchase price.

 

To qualify as incentive options, options must meet additional federal tax requirements, including a $100,000 limit on the value of our ordinary shares subject to incentive options that first become exercisable by a participant in any one calendar year.

 

Grants of stock options to our non-employee directors will initially consist of options in respect of ordinary shares reserved and available for issuance under our 2008 Plan. If and when no ordinary shares remain available for issuance under our 2008 Plan, then such non-employee director grants will consist of options in respect of ordinary shares reserved and available for issuance under our 2011 Plan.

 

Restricted Stock Unit Awards.    The Administrator may award stock units as restricted stock unit awards to participants. Restricted stock unit awards are ultimately payable in the form of ordinary shares and may be subject to such conditions and restrictions as the Administrator may determine, subject to a mandatory minimum period of one year from the date of grant before any such award vests, and, for such awards with time-based restrictions, a mandatory minimum period of three years from the date of grant before such award vests in its entirety, provided that vesting of such award can occur incrementally over the three-year period. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified vesting period. The Administrator may waive the foregoing restriction in the case of a grantee’s death, disability or retirement or upon a Sale Event (as defined in the 2011 Plan). To the extent a restricted stock unit award is subject to Section 409A of the Code, it may contain such additional terms and conditions as the Administrator shall determine in order for such award to comply with the requirements of Section 409A.

 

The Administrator, in its sole discretion, may permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of a restricted stock unit award. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of phantom stock units (which may be fully vested) based on the fair market value of our ordinary shares on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred.

 

Restricted Stock.    The Administrator may award ordinary shares to participants subject to such conditions and restrictions as the Administrator may determine, subject to a mandatory minimum period of one year from the date of grant before any such award vests, and, for such awards with time-based restrictions, a mandatory minimum period of three years from the date of grant before such award vests in its entirety, provided that vesting of such award can occur incrementally over the three-year period. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified restricted period.

 

The Administrator may waive the foregoing restriction in the case of a grantee’s death, disability or retirement or upon a Sale Event (as defined in the 2011 Plan).

 

Cash-Based Awards.    Each cash-based award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a cash-based award may be made in cash or in ordinary shares, as the Administrator determines. Except as may otherwise be provided by the Administrator, a grantee’s right in all cash-based awards that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its subsidiaries for any reason (including if a subsidiary ceases to be a subsidiary of the Company).

 

Performance Share Awards.    The Administrator may grant performance share awards independent of, or in connection with, the granting of other awards under the 2011 Plan. The Administrator, in its sole discretion, determines whether and to whom performance share awards will be granted, the performance goals subject to the award, the period

35


 

during which performance is to be measured, which may not be less than one year, and such other conditions as the Administrator shall determine. Upon the attainment of the performance goal, the grantee is entitled to receive ordinary shares.

 

Tax Withholding.    Participants in the 2011 Plan are responsible for the payment of any federal, national, state or local taxes that the Company is required by law to withhold upon any option exercise or vesting of other awards. The Company has the right to deduct any such taxes from any payment otherwise due to grantee, including the right to reduce the number of ordinary shares otherwise required to be issued to a grantee in an amount that, on the date of issuance, would have a fair market value equal to all such taxes required to be withheld by the Company.

 

Change in Control Provisions.    Under the terms of our 2011 Plan, the Administrator has the authority to determine the conditions under which any award under the 2011 Plan will become exercisable in the event of a Sale Event (as defined in the 2011 Plan) at the time of grant of such award. Except to the extent the Administrator determines otherwise at the time of grant, the 2011 Plan provides that all stock options that are not exercisable immediately prior to the effective time of the Sale Event shall become fully exercisable as of the effective time of the Sale Event; all other awards with time-based vesting, conditions or restrictions shall become fully vested and nonforfeitable as of the effective time of the Sale Event; and all awards with conditions and restrictions relating to the attainment of performance goals may become vested and nonforfeitable in connection with a Sale Event in the Administrator’s discretion. In addition, in the event of a Sale Event in which the Company’s shareholders will receive cash consideration, the Company may make or provide for a cash payment to participants holding vested stock options equal to the difference between the per share cash consideration and the exercise price of any vested stock option.

 

Shareholder Rights.    Until shares are delivered in accordance with the 2011 Plan, no right to vote or receive dividends or any other rights of a shareholder will exist with respect to shares to be issued in connection with equity awards, notwithstanding the exercise of a stock option or any other action by the grantee with respect to an equity award.

 

Amendments and Termination.    Our Board may at any time amend or discontinue the 2011 Plan, and the Administrator may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. Any amendments that materially change the terms of the 2011 Plan, including any amendments that increase the number of ordinary shares reserved for issuance under the 2011 Plan, expand the types of awards available, materially expand the eligibility to participate in, or materially extend the term of the 2011 Plan, or materially change the method of determining the fair market value of our ordinary shares, will be subject to approval by our shareholders. Amendments shall also be subject to approval by our shareholders if and to the extent determined by the Administrator to be required by the Code to preserve the qualified status of incentive options or to ensure that compensation earned under the 2011 Plan qualifies as performance-based compensation under Section 162(m) of the Code. In addition, except in connection with a reorganization or other similar change in the capital stock of the Company or a merger or other transaction, without prior shareholder approval, the Administrator may not reduce the exercise price of an outstanding stock option or effect re-pricing of an outstanding stock option through cancellation or re-grants or through cancellation in exchange for cash or another award. 

 

Effective Date of 2011 Plan

 

The Alkermes plc 2011 Stock Option and Incentive Plan was approved by our shareholders on December 8, 2011. Our shareholders approved an amendment to such plan on August 1, 2012 and subsequently approved the Alkermes plc 2011 Stock Option and Incentive Plan, as so amended, in an amended and restated form, on August 1, 2013, May 28, 2014 and May 25, 2016. Awards of incentive options may be granted under the 2011 Plan until ten years after Board approval. No awards may be granted under such plan after the date that is ten years from the date of shareholder approval.

 

New Plan Benefits

 

The benefits or amounts that may be received by, or allocated to, the Company’s Chief Executive Officer, Chief Financial Officer, and the Company’s three other named executive officers, all executives as a group, non-executive

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directors as a group and non-executive officer employees as a group, are granted on a discretionary basis and, as such, are not determinable as awards under the 2011 Plan.

 

Grants of stock options to our non-employee directors will initially consist of options in respect of ordinary shares reserved and available for issuance pursuant to our 2008 Plan. If and when no ordinary shares remain available for issuance under our 2008 Plan, then such non-employee director grants will consist of options in respect of ordinary shares reserved and available for issuance under our 2011 Plan.

 

U.S. Federal Income Tax Consequences

 

The following is a summary of the principal U.S. federal income tax consequences of certain transactions under the 2011 Plan. It does not describe all U.S. federal tax consequences under the 2011 Plan, nor does it describe foreign, state or local tax consequences.

 

Incentive Options.    No taxable income is generally realized by the optionee upon the grant or exercise of an incentive option. If ordinary shares issued to an optionee pursuant to the exercise of an incentive option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (1) upon sale of such shares, any amount realized in excess of the option price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (2) we will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.

 

An incentive option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply. If ordinary shares acquired upon the exercise of an incentive option are disposed of prior to the expiration of the two-year and one-year holding periods described above, generally (1) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the ordinary shares at exercise (or, if less, the amount realized on a sale of such shares) over the option price thereof, and (2) we will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive option is paid by tendering shares.

 

Non-Qualified Options.    No taxable income is generally realized by the optionee upon the grant of a non-qualified option. Generally (1) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the option price and the fair market value of the shares on the date of exercise, and we receive a tax deduction for the same amount, and (2) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares have been held. Special rules will apply where all or a portion of the exercise price of the non-qualified option is paid by tendering shares. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.

 

Other Awards.    We will generally be entitled to a tax deduction in connection with an award under the 2011 Plan in an amount equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize that tax at the time that an award is exercised, vests or becomes non-forfeitable, unless the award provides for a further deferral.

 

Parachute Payments

 

The vesting of any portion of an option or other award that is accelerated due to the occurrence of a change in control may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be non-deductible to us, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).

 

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Limitation on the Company’s Deductions

 

As a result of Section 162(m) of the Code,  our deduction for certain awards under the 2011 Plan may be limited to the extent that the Chief Executive Officer or other executive officer (other than our Chief Financial Officer) whose compensation is required to be reported in the summary compensation table receives compensation in excess of $1 million a year (other than performance-based compensation that otherwise meets the requirements of Section 162(m) of the Code). The 2011 Plan is structured to allow certain grants to qualify as performance-based compensation.

 

A copy of the 2011 Plan, as amended in accordance with this Proposal 4, is attached as Appendix A.

 

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BACKGROUND TO PROPOSALS 5 AND 7

 

Overview

Proposals 5 and 7, which we refer to as our Share Issuance Proposals, ask shareholders to approve, for a five-year term, our directors’ authority to allot and issue shares up to our authorized but unissued share capital, which we call the share allotment and issuance authority, and to allot and issue those shares for cash without first being required to offer such shares to all of our shareholders on a pro-rata basis, which we call the pre-emption opt-out authority. In this proxy statement, we refer to the share allotment and issuance authority and the pre-emption opt-out authority collectively as the share issuance authorities. Our Board recommends voting for the Share Issuance Proposals for many reasons, including the following, which are discussed in greater detail below:

 

Approval of the Share Issuance Proposals will place us on an equal footing with our peers listed on Nasdaq in competing for, and completing, acquisitions and similar strategic transactions designed to advance our business and increase shareholder value.

 

Share issuance limitations derived from Irish market practice for companies listed on the Irish Stock Exchange (“ISE”) are not required or mandated by Irish or U.S. laws or regulations and we do not believe that limitations derived from such Irish market practice should apply to us as a company listed exclusively on Nasdaq.

 

The governance and share issuance requirements and restrictions to which U.S.-incorporated, Nasdaq-listed companies are subject will continue to apply to us in all respects.

 

We believe we responsibly exercised our rights under our original share issuance authorities, which are the same authorities that we are requesting you to approve under the Share Issuance Proposals. 

 

Why We are Submitting the Share Issuance Proposals for Shareholder Approval

We are listed in the U.S. and Incorporated in Ireland. We are a public limited company incorporated in Ireland and therefore we follow the corporate legal requirements of Ireland.  Our Board is subject to, and has and will continue to exercise its authority in compliance with, its fiduciary duties to the Company and our shareholders under Irish law. Our ordinary shares are listed exclusively on Nasdaq.  Because our ordinary shares are listed exclusively in the U.S. and the U.S. capital markets are the sole capital markets for our ordinary shares, we follow the rules and regulations of the SEC and the Nasdaq rules and listing standards. We are and will continue to be subject to the same governance and share issuance requirements and restrictions as all U.S.-incorporated companies listed on Nasdaq.

Irish law requires us to obtain shareholder approval of share issuance authorities. As a matter of Irish law, directors of an Irish public limited company must have specific authority from shareholders to allot and issue any of the company’s ordinary shares (other than pursuant to employee equity plans). In addition, as a matter of Irish law, when the directors of an Irish public limited company determine that it is in the best interests of the company to issue shares for cash, the company must first offer those shares on the same or more favorable terms to existing shareholders of the company on a pro-rata basis, unless this statutory obligation is dis-applied, or opted-out of, by approval of the shareholders. As a matter of Irish law, these approvals are required only once every five years and there is no limit under Irish law on the amount of shares that these approvals may cover (apart from the Irish-incorporated company’s then authorized but unissued share capital). Companies incorporated in the U.S. are not subject to similar share issuance restrictions.

In 2016 we sought and received approval for limited share issuance authorities. Our original share issuance authorities expired on September 15, 2016 and accordingly, we sought approval of the renewal of our share issuance authorities at our 2016 Annual General Meeting of Shareholders. When we formulated the share issuance authorities proposals that were presented at, and approved by, our shareholders at our 2016 Annual General Meeting of Shareholders, we followed the market practice for companies whose share capital is listed on the ISE, which market practice is described in more detail below, in part because we believed that our shareholders might apply the same policies they apply to companies listed on the ISE when analyzing our share issuance authorities.  However, those limitations are not required or mandated by Irish or U.S. laws or regulations; rather, those limitations are derived from

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the standards and market practices for companies whose share capital is listed on the ISE, where our shares are not listed.

Obtaining the authorities requested by the Share Issuance Proposals is important to our business strategy. We regularly review potential transactions related to technologies, products or product rights and businesses complementary to our business, and, if appropriate, we may seek to enter into one or more of these transactions at any time in order to advance our business and increase shareholder value. Many of these opportunities are highly competitive, with multiple parties often offering comparable or even the same economics. If the Share Issuance Proposals are not approved, we may be required to obtain shareholder approval prior to issuing any shares in connection with new strategic opportunities, even if we would not otherwise be required to obtain shareholder approval under the Nasdaq rules. This could put us at a distinct disadvantage compared to many of our peers in competing for, and completing, acquisitions and similar transactions, thus potentially limiting our ability to undertake transactions that are in the best interests of the Company and our shareholders. 

Upon further analysis and engagement with our shareholders following our 2016 Annual General Meeting of Shareholders, we believe that it is in the best interests of the Company and our shareholders to seek full share issuance authorities. This year, we have solicited the views of institutional investors representing greater than 71% of our outstanding shares on a variety of topics, including our business, strategy and corporate governance practices. These discussions have been productive and informative, and have helped ensure that our Board’s decisions are aligned with shareholder objectives. In discussions we have had with shareholders about the share issuance authorities, shareholders have generally understood that renewing our share issuance authorities to the maximum extent permitted by Irish law would be both consistent with Irish and U.S. laws and regulations and would allow us to compete on an equal footing with our U.S.-incorporated and exchange-listed peers.

We therefore believe that applying the standards and market practices for companies whose share capital is listed on the ISE, where our ordinary shares are not listed, is no longer appropriate for our company, particularly in light of our belief that the current limitations on our share issuance authorities place us at a competitive disadvantage compared to our U.S.-incorporated peers whose share capital, like ours, is listed exclusively on U.S. exchanges but who, unlike us, are not subject to these share issuance limitations, and the fact that we are committed to complying with the governance rules and practices of the actual capital market for our ordinary shares—Nasdaq—which provides its own separate restrictions on share issuances for the protection of shareholders. Therefore, we have formulated Proposals 5 and 7 to seek the same share issuance authorities we had from September 2011 until September 2016, during which time we possessed the right under Irish law to allot and issue shares, and sell such shares for cash, up to our total authorized but unissued share capital, because we believe such authority would allow us to compete on an equal footing with our U.S.-incorporated, Nasdaq-listed peer companies for acquisitions and similar transactions.

What the Share Issuance Proposals are Asking Shareholders to Approve

The Share Issuance Proposals ask shareholders to approve, for a five-year period commencing on the date of approval of the Share Issuance Proposals, our directors’ authority to allot and issue shares up to a maximum of our authorized but unissued share capital as of the date of such Proposals, and to issue those shares for cash without first being required to offer such shares to all of our shareholders on a pro-rata basis. Such Proposals do not alter our existing legal obligations; we are and will continue to be subject to all of the shareholder approval and other requirements that arise from our ordinary shares being listed on Nasdaq and our being considered a U.S. domestic reporting company under SEC rules, and our Board will continue to be subject to, and satisfy, its fiduciary duties to the Company and our shareholders under Irish law with respect to share issuances.

Why Our Shareholders Should Support Our Share Issuance Proposals

The Share Issuance Proposals establish equal footing and remove competitive disadvantages compared to our U.S. exchange-listed peers. We believe that the current limitations on our share issuance authorities place us at a competitive disadvantage as compared to our U.S.-incorporated and exchange-listed peers. Companies that are incorporated and listed in the U.S. are not generally required to—and do not—seek shareholder approval to renew their authority to allot and issue shares, or to dis-apply the obligation, when issuing such shares for cash, to offer the shares on a pre-emptive, pro-rata basis to existing shareholders. Approval of the Share Issuance Proposals would allow us to compete on an equal footing with our U.S.-incorporated and U.S. exchange-listed peers.

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As described above, we regularly review potential transactions related to technologies, products or product rights and businesses complementary to our business, and we may seek to enter into one or more of these transactions at any time in order to advance our business and increase shareholder value. Accordingly, to enable our directors to comply with their primary duty to act in the best interests of the Company, our Board, along with our management, must have the flexibility to quickly take advantage of strategic opportunities, including potentially transformative acquisitions and other capital-intensive opportunities if and when such acquisitions or opportunities arise. Many of these opportunities are highly competitive, with multiple parties often offering comparable or even the same economics. If the Share Issuance Proposals are not approved, we may be required to obtain shareholder approval prior to issuing any shares in connection with new strategic opportunities, even if we would not otherwise be required to obtain shareholder approval under the Nasdaq rules. This could put us at a distinct disadvantage compared to many of our peers in competing for acquisitions and similar transactions and might make it difficult for us to complete such transactions, thus potentially limiting our ability to deploy capital in the best interests of the Company and our shareholders.

Should our shareholders not approve the Share Issuance Proposals and our current share issuance authorities expire, we will generally not be able to allot and issue any shares, including shares for cash, (other than to employees pursuant to our employee equity plans or pursuant to pre-existing contractual obligations) without first seeking and obtaining shareholder approval for each such issuance. In either case, we would still have the ability to seek shareholder approval in connection with a specific issuance of shares; however, we do not believe that our ability to convene an extraordinary general meeting of shareholders to approve each specific share issuance that we may seek to undertake in furtherance of future strategic transactions is a workable alternative to obtaining approval of the Share Issuance Proposals. Obtaining shareholder approval is a costly process that can take a significant amount of time, without any assurance of success. The uncertainty of whether we could obtain shareholder approval for a specific issuance in the context of any transaction, as well as the delays we would experience in seeking and obtaining such approval, could make any transaction bid that we submit less attractive, even if our bid was on economically better terms than competitive bids submitted by U.S.-listed companies not subject to similar share issuance restrictions. In addition, the case-by-case approval approach ignores market window and other deal timing and competitive realities. Likewise, even if Proposal 5 is approved, if Proposal 7 is not also approved, then in any capital-raising transaction where we propose to issue shares for cash consideration in excess of our current limitation (or, upon expiry of our current limitation, at all), we would be required to first offer those shares that we propose to issue for cash to all of our existing shareholders in a time-consuming pro-rata rights offering, which would considerably reduce the speed at which we could complete capital-raising activities undertaken in furtherance of acquisition opportunities or otherwise, would increase our costs and otherwise might make it difficult for us to complete acquisitions, licensing and similar transactions, and could put us at a distinct disadvantage compared to many of our peers in competing for such transactions.

In addition, we believe that renewing our share issuance authorities for a five-year period instead of seeking general re-approval of our share issuance authorities on a more frequent basis is in the best interests of the Company and our shareholders because seeking general re-approval of our share issuance authorities on a more frequent basis would still subject us to the competitive disadvantage risk, particularly given the 75% vote threshold required to approve the pre-emption opt-out authority. Our concern in this regard is that a single shareholder or small number of shareholders, including those with a short-term focus, could defeat a proposal to approve the pre-emption opt-out authority given the high vote threshold to approve that dis-application, even if a substantial majority of our shareholders who are supportive of our business and strategy vote to approve the pre-emption opt-out authority.

Share issuance limitations derived from Irish market practice are not required or mandated by Irish or U.S. laws or regulations and we do not believe that limitations derived from Irish market practice should apply to us as a company listed exclusively on Nasdaq. We do not believe that limitations derived from Irish market practice should apply to us. While not required or mandated by Irish or U.S. laws or regulations, we believe it has become market practice for companies whose share capital is listed on the ISE to generally limit their share allotment and issuance authority to an amount equal to 33% (or 66% pursuant to a fully pre-emptive rights issue) of their issued share capital for a period of 12 to 18 months and to generally limit the dis-application of the statutory pre-emption right to a maximum of 10% of their issued share capital (provided that any amount above 5% is to be used only for the purposes of an acquisition or a specified capital investment). While these limitations in size and duration on the share issuance authorities are part of the corporate governance framework applicable to companies whose share capital is listed on the ISE (regardless of whether such companies are incorporated in Ireland or elsewhere), our ordinary shares are not, and never have been, listed on the ISE, and we are not subject to ISE share listing rules or governed by the corporate

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governance standards applicable to companies whose share capital is listed on the ISE. Our current share issuance authorities conform to these limitations. However, because the U.S. capital markets are the sole capital markets for our ordinary shares and our ordinary shares are listed exclusively on Nasdaq, we believe that our shareholders expect us to, and we are committed to, follow customary U.S. capital markets practices, the rules and regulations of the SEC and the Nasdaq rules and listing standards—and, based on engagement with our shareholders following our 2016 Annual General Meeting of Shareholders, we believe that the shareholders with whom we have had discussions about the share issuance authorities understood that renewing our share issuance authorities to the maximum extent permitted under Irish law and without the limitations on amount or duration derived from Irish market practice would be both consistent with Irish and U.S. laws and regulations and would allow us to compete on an equal footing with our U.S.-incorporated and exchange-listed peers.

Risks if the Share Issuance Proposals are not approved. For all of the reasons described above, we believe that the additional restrictions on our ability to deploy capital if our share issuance authorities are not renewed on the terms set forth in the Share Issuance Proposals would negatively impact our ability to quickly take advantage of strategic opportunities, including potentially transformative acquisitions and other capital-intensive opportunities if and when such acquisitions or opportunities arise. In addition, we operate in a highly competitive industry, and believe that the failure to approve the share issuance authorities on the basis proposed would put us at a competitive disadvantage; conversely, we believe that the renewal of our share issuance authorities on the terms set forth in the Share Issuance Proposals would keep us on an equal footing with our peer companies who are incorporated and listed in the U.S.

We will remain subject to all Nasdaq requirements and SEC rules, and fiduciary duties under Irish law. Shareholder approval of our Share Issuance Proposals does not impact our existing obligations under SEC rules and regulations and the Nasdaq rules and listing standards. In addition, our Board is subject to, and has and will continue to exercise its authority in compliance with, its fiduciary duties to the Company and our shareholders under Irish law, including in respect of share issuances.

To be clear, shareholder approval of our Share Issuance Proposals would not mean that we would have no limits on future share issuances. To the contrary, we are considered a U.S. domestic reporting company under SEC rules and are subject to the same governance and share issuance requirements as all U.S.-incorporated companies listed on Nasdaq. For example, other than in public offerings for cash, Nasdaq Listing Rule 5635 requires, among other things, that shareholder approval be obtained prior to the sale, issuance or potential issuance of 20% or more of our ordinary shares outstanding, at a price less than the greater of book or market value, whether in connection with private placements or the acquisition of the stock or assets of another company. This same rule also requires shareholder approval for acquisitions of the stock or assets of another company where a director, officer or shareholder of our company has certain interests in the target company or assets to be acquired. These restrictions would continue to apply to us.

In addition, our shareholders will also continue to benefit from our directors’ obligations under Irish law, including their principal fiduciary duties to act in good faith and in the best interests of the Company, and the protections afforded to them under the Irish Takeover Rules, which are designed to ensure that, in an offer context, there is equality of information between shareholders and bidders and that shareholders’ rights are protected.

During our first five years as an Irish company we possessed full share issuance authorities and we believe we demonstrated responsible use of our equity. From the date of our incorporation as an Irish public limited company through September 2016, we possessed the right under Irish law to allot and issue shares, and sell such shares for cash, up to our total authorized but unissued share capital—the same authorities we are requesting you to approve under Proposals 5 and 7. During this period, we believe that we demonstrated responsible use of such authorities, engaging in one sale of less than five percent of our ordinary share capital in one capital-raising transaction with Invesco Perpetual Funds. In addition, during this period, our average burn rate, on an adjusted and unadjusted basis, was consistently less than the average for our GICS industry group.

 

Effect on Authorized Share Capital

Of the 450,000,000 ordinary shares we currently have authorized for issuance, there were 153,098,864 ordinary shares issued and outstanding and another 25,316,811 ordinary shares reserved for issuance under the Equity Plans, in each case as of the close of business on the Record Date. Approval of the Share Issuance Proposals will not increase our authorized share capital or otherwise provide greater authority than is provided for under our Articles of Association. In

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addition, we have no immediate plans, arrangements or understandings with respect to any share issuances for which renewal of the share issuance authorities is necessary, other than issuances of shares under the Equity Plans.

 

Summary

The Share Issuance Proposals, if approved, would provide our Board with the flexibility to issue shares that are already within our authorized share capital in order to advance our business and drive shareholder value on an equal footing with our peers, subject to the shareholder approval and other requirements and restrictions of Nasdaq and the SEC. The renewal of the share issuance authorities, as proposed:

will not increase our authorized share capital;

will not exempt us from any Nasdaq corporate governance or other requirements, including those limiting the issuance of shares;

will keep us on an equal footing with our peer companies who are incorporated and listed in the U.S., while also fully complying with Irish law; and

is fully consistent with U.S. capital markets practice and governance standards.

 

For the above reasons, our Board strongly recommends that you vote “FOR” both of the Share Issuance Proposals.

 

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PROPOSAL 5

 

DIRECTORS’  AUTHORITY TO ALLOT AND ISSUE SHARES

 

(Ordinary resolution)

 

Under Irish law, directors of an Irish public limited company must have authority from its shareholders to allot and issue any shares, including shares which are part of the company’s authorized but unissued share capital. Under Irish law, this authority can be granted for a maximum period of five years, at which point it lapses unless renewed by the company’s shareholders. Our current authorization, approved by our shareholders at the Company’s 2016 Annual General Meeting of Shareholders, allows our directors to allot and issue up to a maximum of 33%, or 66% pursuant to a fully pre-emptive rights issue, of our issued ordinary share capital until March 15, 2018, unless otherwise varied, revoked or renewed, which we refer to as our Existing General Allotment and Issuance Authority.  

 

Under this Proposal 5, we are seeking approval to provide our directors with the authority to allot and issue shares up to a maximum of our authorized but unissued ordinary share capital as of the date of the resolution, effective for a five-year period from the date this Proposal 5 is approved. We are not asking shareholders to approve an increase to our authorized share capital. Approval of this Proposal 5 will simply provide our Board with the flexibility to allot and issue ordinary shares up to the maximum of our existing authorized but unissued ordinary share capital as of the date of the resolution, subject to the shareholder approval and other requirements of Nasdaq and the SEC. The authority would apply to the allotment and issuance of shares, other securities convertible into or exercisable or exchangeable for our shares and director equity awards. This authority would provide our Board with the flexibility to allot and issue shares that are already within our authorized share capital in order to advance our business and drive shareholder value, including, if applicable, in connection with funding acquisitions and raising capital.

 

Because we are a Nasdaq-listed company,  our shareholders continue to benefit from the protections afforded to them under the rules and regulations of Nasdaq and the SEC, including those rules that limit our ability to allot and issue shares in specified circumstances, and our Board will continue to focus on, and satisfy, its fiduciary duties to the Company and our shareholders under Irish law with respect to share issuances. In addition, our shareholders will also continue to benefit from our directors’ obligations under Irish law, including their principal fiduciary duties to act in good faith and in the best interests of the Company, and the protections afforded to them under the Irish Takeover Rules, which are designed to ensure that, in an offer context, there is equality of information between shareholders and bidders and that shareholders’ rights are protected. Furthermore, we note that this authorization is required as a matter of Irish law and is not otherwise required for U.S.-incorporated companies listed on Nasdaq with whom we compete. Accordingly, approval of this resolution would merely place us on equal footing with U.S.-incorporated, Nasdaq-listed companies.

 

If shareholders approve this Proposal 5, the Existing General Allotment and Issuance Authority will be revoked with effect from the passing of the resolution set forth below. If shareholders do not approve this Proposal 5, the Existing General Allotment and Issuance Authority will continue until March 15, 2018. However, before March 15, 2018 we will remain at a disadvantage compared to other Nasdaq-listed companies because, absent shareholder approval, our Board will not be able to allot and issue ordinary shares up to the maximum of our existing authorized but unissued ordinary share capital, and after March 15, 2018, we will generally not be able to allot and issue any shares (other than to employees pursuant to our employee equity plans or pursuant to pre-existing contractual obligations) without first seeking and obtaining shareholder approval for each such issuance.

 

Please refer to the Background to Proposals 5 and 7 beginning on page 39 of this proxy statement for additional information regarding this Proposal 5.

 

As required under Irish law, the resolution in respect of this Proposal 5 is an ordinary resolution that requires the affirmative vote of the majority of the votes cast (meaning the number of shares voted “for” this Proposal 5 must exceed the number of shares voted “against” this Proposal 5). Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of this Proposal 5 because they are not considered as votes cast.

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The text of the resolution in respect of Proposal 5 is as follows:

 

“RESOLVED, that the directors of the Company be and they are hereby generally and unconditionally authorized pursuant to section 1021(1) of the Irish Companies Act 2014 to exercise all powers of the Company to allot relevant securities (within the meaning of section 1021(12) of the Irish Companies Act 2014) up to an aggregate nominal amount equal to the authorized but unissued share capital of the Company as at the date of this resolution, and the authority conferred by this resolution shall expire five years from the date of passing of this resolution; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired and, in that case, the directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired, and that the Existing General Allotment and Issuance Authority (as defined in this proxy statement) is revoked effective upon the passing of this resolution.”

 

The Board unanimously recommends that you vote FOR granting the directors the authority to allot and issue shares under this Proposal 5.

 

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PROPOSAL  6

 

ADJOURNMENT PROPOSAL

 

(Ordinary resolution)

 

You are being asked to consider and vote upon an adjournment proposal.

This resolution proposes to approve any motion to adjourn the Annual Meeting, or any adjournments thereof, to another time and place to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve Proposal 7.

Proposal 7 is subject to the Irish law super majority voting regime of voting by special resolution, which requires no less than 75% of the votes of shareholders cast (in person or by proxy) at a general meeting to be voted “FOR” the proposal in order to be passed. Given the high vote threshold associated with Proposal  7,  we are seeking your authority to adjourn the Annual Meeting to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve Proposal 7.

 

As required under Irish law, the resolution in respect of this Proposal 6 is an ordinary resolution that requires the affirmative vote of the majority of the votes cast (meaning the number of shares voted “for” this Proposal 6 must exceed the number of shares voted “against” this Proposal 6).  Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of this Proposal 6 because they are not considered as votes cast.

 

The text of the resolution in respect of Proposal 6 is as follows:

“RESOLVED,  that any motion to adjourn this annual general meeting, or any adjournments thereof, to another time and place to solicit additional proxies if there are insufficient votes at the time of this annual general meeting to approve Proposal 7 set forth in this proxy statement, be approved.”

The Board unanimously recommends that you vote FOR the adjournment of the Annual Meeting to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve Proposal 7.

 

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PROPOSAL 7

 

DIRECTORS’  AUTHORITY TO ALLOT AND ISSUE SHARES FOR CASH WITHOUT

FIRST OFFERING SHARES TO EXISTING SHAREHOLDERS

 

(Special resolution)

 

Under Irish law, unless otherwise authorized, when an Irish public limited company issues shares for cash to new shareholders, it is required to first offer those shares on the same or more favorable terms to existing shareholders of the company on a pro-rata basis (commonly referred to as the statutory pre-emption right). The statutory pre-emption right, if not dis-applied, affords existing shareholders the right to purchase any new shares that we propose to issue for cash in order to maintain their proportionate ownership interests in Alkermes following the issuance of those shares.

 

Our current authority, approved by our shareholders at the Company’s 2016 Annual General Meeting of Shareholders, allows our directors to allot and issue shares of the Company for cash on a non-pre-emptive basis until March 15, 2018, unless otherwise varied, revoked or renewed, provided that (a) the issuance is limited to a maximum of 10% of the issued ordinary share capital of the Company as of April 7, 2016, provided that any amount above 5% is to be used only for the purposes of an acquisition or a specified capital investment or (b) the issuance is in connection with any rights issue proportionally in favor of the holders of ordinary shares, and we refer to (a) and (b) as our Existing Pre-Emption Opt-Out Authority.

 

Under this Proposal 7, we are seeking shareholder authority to opt-out of the statutory pre-emption rights provision, effective for a five-year period from the date this resolution is approved. Your approval of this Proposal 7 will simply provide our Board with the flexibility to allot and issue shares for cash on a non-pre-emptive basis up to a maximum of our existing authorized but unissued ordinary share capital as of the date of the resolution. This authority would not exempt Alkermes from applicable Nasdaq requirements to obtain shareholder approval prior to certain share issuances or to comply with applicable SEC disclosure and other regulations, and our Board will continue to focus on, and satisfy, its fiduciary duties to the Company and our shareholders under Irish law, including with respect to share issuances. In addition, our shareholders will also continue to benefit from our directors’ obligations under Irish law, including their principal fiduciary duties to act in good faith and in the best interests of the Company, and the protections afforded to them under the Irish Takeover Rules, which are designed to ensure that, in an offer context, there is equality of information between shareholders and bidders and that shareholders’ rights are protected. Furthermore, we note that this authorization is required as a matter of Irish law and is not otherwise required for U.S.-incorporated companies listed on Nasdaq with whom we compete. Accordingly, approval of this resolution would merely place us on an equal footing with U.S.-incorporated, Nasdaq-listed companies.

 

If shareholders do not approve this Proposal 7, the Existing Pre-Emption Opt-Out Authority will continue until March 15, 2018. However, before March 15, 2018, our Board will not be able to issue shares for cash in excess of the limitations under the Existing Pre-Emption Opt-Out Authority without first offering such shares to existing shareholders of Alkermes on a pro-rata basis before such shares could be issued to any new shareholders, and any ordinary shares issued for cash after March 15, 2018 would have to first be offered to existing shareholders of Alkermes on a pro-rata basis before those shares could be issued to any new shareholders. As a result of these limitations, in any capital-raising transaction where we propose to issue shares for cash consideration, we may be required to first offer some or all of those shares that we propose to issue for cash to all of our existing shareholders in a time-consuming pro-rata rights offering, which would considerably reduce the speed at which we could complete capital-raising activities undertaken in furtherance of acquisition opportunities or otherwise, would increase our costs and otherwise might make it difficult for us to complete acquisitions, licensing and similar transactions, and could put us at a distinct disadvantage compared to many of our peers in competing for such transactions.

 

Please note that the requirement to offer shares to pre-existing shareholders applies only to share issuances for cash consideration; accordingly, it does not apply where we issue shares for non-cash consideration (such as in a share exchange transaction or in any transaction in which property other than cash is received by us in payment for shares) or where we issue shares pursuant to employee equity plans.

 

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Please refer to the Background to Proposals 5 and 7 beginning on page 39 of this proxy statement for additional information regarding this Proposal 7.

 

Please note that if Proposal 5 is not approved, Proposal 7, if approved, will (a) be limited by the terms of the Existing General Allotment and Issuance Authority and (b) have no effect upon expiry of the Existing General Allotment and Issuance Authority on March 15, 2018. If Proposal 5 and this Proposal 7 are approved, the Existing Pre-Emption Opt-Out Authority will be revoked effective upon the passing of the resolution set out below.

 

The resolution in respect of Proposal 7 is a special resolution that requires the affirmative vote of at least 75% of the votes cast. Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of this Proposal 7 because they are not considered as votes cast.

 

The text of the resolution in respect of Proposal 7 is as follows:

 

“RESOLVED, as a special resolution, that, subject to the passing of the resolution in respect of Proposal 5 (Directors’ authority to allot and issue shares) as set out above, the directors of the Company be and they are hereby empowered pursuant to section 1023(3) of the Irish Companies Act 2014 to allot equity securities (as defined in section 1023(1) of that Act) for cash, pursuant to the authority conferred by Proposal 5 as if sub-section (1) of section 1022 did not apply to any such allotment, up to an aggregate nominal amount equal to the authorized but unissued share capital of the Company as at the date of this resolution, and the authority conferred by this resolution shall expire five years from the date of passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired and, in that case, the directors may allot equity securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired, and that the Existing Pre-Emption Opt-Out Authority (as defined in this proxy statement) is revoked effective upon the passing of this resolution.”

 

The Board unanimously recommends that you vote FOR granting the Board authority to opt-out of statutory pre-emption rights under this Proposal 7.

 

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REPORT OF THE AUDIT AND RISK COMMITTEE

 

No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.

 

As more fully described in its charter, the Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. Management has day-to-day responsibility for the Company’s financial reporting process, including assuring that the Company develops and maintains adequate financial controls and procedures and monitoring and assessing compliance with those controls and procedures, including internal control over financial reporting. The Company’s independent auditor and accounting firm is responsible for auditing the annual financial statements prepared by management, expressing an opinion as to whether those financial statements fairly present the financial position, results of operations and cash flows of the Company in conformity with generally accepted accounting principles and discussing with the Audit and Risk Committee any issues they believe should be raised. The independent auditor and accounting firm is also responsible to the Audit and Risk Committee and the Board for testing the integrity of the financial accounting and reporting control systems, for issuing a report on the Company’s internal control over financial reporting and for such other matters as the Audit and Risk Committee and Board determine. In addition, the independent auditor and accounting firm performs audit-related and permissible non-audit services for the Company.

 

In the performance of its oversight function, the Audit and Risk Committee reviewed and discussed with management and the independent auditor and accounting firm the audited consolidated financial statements of the Company for 2016, contained in the Company’s  Annual Report on Form 10-K. The Audit and Risk Committee discussed with PwC,  the Company’s independent auditor and accounting firm, the overall scope and plans for their audit. The Audit and Risk Committee met with PwC, with and without management present, to discuss the results of its examination, judgments as to the quality, not just the acceptability, of the Company’s accounting principles, the reasonableness of significant estimates and judgments, critical accounting policies and accounting estimates resulting from the application of these policies, the substance and clarity of disclosures in the financial statements, and the Company’s disclosure control process and internal control over financial reporting.

 

The Audit and Risk Committee also discussed with PwC the matters required to be discussed by Auditing Standard No. 1301,  Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit and Risk Committee discussed with PwC the independence of PwC from management and Alkermes, and received the written disclosures and the letter from PwC to confirm its independence as required by applicable requirements of the PCAOB.

 

The Audit and Risk Committee also reviewed and discussed with management its assessment and report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, which it made in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act and related regulations. The Audit and Risk Committee also reviewed and discussed with PwC the Report of Independent Registered Public Accounting Firm included in the Company’s  Annual Report on Form 10-K related to its audit of the consolidated financial statements and the effectiveness of internal control over financial reporting.

 

The Audit and Risk Committee monitors the activity and performance of PwC. All services to be provided by PwC are pre-approved by the Audit and Risk Committee. The Audit and Risk Committee’s evaluation of PwC included, among other things, consideration as to whether PwC’s provision of permissible non-audit services to the Company is compatible with maintaining its independence.

 

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In reliance on these reviews and discussions, the Audit and Risk Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s  Annual Report on Form 10-K for the year ended December 31, 2016 for filing with the SEC, and the Board approved such inclusion.

 

Respectfully submitted by the Audit and Risk Committee,

 

Paul J. Mitchell (Chair)

Floyd E. Bloom, M.D.

Robert A. Breyer

 

For more information about the Audit and Risk Committee and its charter, you are invited to access the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com.

 

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AUDIT FEES

 

Aggregate fees for 2016 and 2015 

 

During 2016 and 2015,  PwC provided various audit, audit-related and tax services to us.  The Audit and Risk Committee understands the need for PwC to maintain objectivity and independence in its audit of our financial statements and our internal control over financial reporting. To minimize relationships that could appear to impair the objectivity of PwC,  the Audit and Risk Committee has adopted policies and procedures which require it to pre-approve all audit and non-audit services performed by PwC. All of the services of PwC for 2016 and 2015 described below were pre-approved by the Audit and Risk Committee.

 

The aggregate fees of PwC for 2016 and 2015 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

 

2015

 

Audit and review of financial statements(1)    

    

$

1,658,850

    

$

1,695,968

 

Audit-related fees(2)

 

 

23,615

 

 

682,771

 

Tax fees(3)

 

 

399,617

 

 

573,437

 

All other fees(4)

 

 

1,800

 

 

1,800

 

Total

 

$

2,083,882

 

$

2,953,976

 

 

            

            

 

(1)  

Consists of fees for services related to the audit of our annual consolidated financial statements, statutory audits and the review of our quarterly consolidated financial statements, including the review of our internal controls over financial reporting and other engagements related to the applicable fiscal year. Includes fees paid to PwC Dublin in respect of the audit of the group accounts of $0.5 million and $0.6 million during 2016 and 2015, respectively. Included in these amounts for 2016 and 2015 are expenses of $48,850 and $69,486, respectively.

(2)

For 2016, consists of fees for a royalty audit of one of our collaboration agreements. For 2015, consists of fees for the stand-alone audit of our manufacturing facility in Gainesville, Georgia, a royalty audit of one of our collaboration agreements and general advisory fees.

(3)

Consists of fees for tax advisory services, other than those related to the audit of our annual consolidated financial statements and review of our quarterly consolidated financial statements. Includes fees paid to PwC Dublin in respect of tax advisory services of $0.1 million during each of 2016 and 2015.

(4)

Consists of fees for access to the PwC on-line accounting research database.

 

 

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OWNERSHIP OF THE COMPANY’S ORDINARY SHARES

 

The following table and notes provide information about the beneficial ownership of our ordinary shares as of the Record Date by:

 

each of the Company’s current directors and director nominees;

 

the Company’s Chief Executive Officer;

 

the Company’s Chief Financial Officer;

 

each of the Company’s three other named executive officers as set forth in the Summary Compensation Table herein; and

 

all of the Company’s current directors and executive officers as a group.

 

According to SEC rules, the Company has included in the column “Number of Issued Ordinary Shares” all shares over which the person has sole or shared voting or investment power, and the Company has included in the column “Number of Ordinary Shares Issuable” all shares that the person has the right to acquire within 60 days after the Record Date through the exercise of any stock option, vesting of any stock award or other right. All shares that a person has a right to acquire within 60 days of the Record Date are deemed outstanding for the purpose of computing the percentage beneficially owned by the person, but are not deemed outstanding for the purpose of computing the percentage beneficially owned by any other person.

 

Unless otherwise indicated, each person has the sole power (except to the extent authority is shared by spouses) to invest and vote the shares listed opposite the person’s name. The Company’s inclusion of shares in this table as beneficially owned is not an admission of beneficial ownership of those shares by the person listed in the table. The business address of each director and that of Mr. Cooke, Mr. Frates and Ms. Biberstein, as officers of the Company, is Connaught House, 1 Burlington Road, Dublin 4, Ireland. The business address of the other executive officers is 852 Winter Street, Waltham, MA 02451.

 

Ownership by Directors and Executive Officers

 

 

 

 

 

 

 

 

 

 

 

 

Number of Issued Ordinary Shares

 

Number of Ordinary Shares Issuable(1)

 

Total

 

Percent(2)

 

Mr. David Anstice

    

15,000

    

217,600

    

232,600

    

*

 

Dr. Floyd E. Bloom

 

128,881

 

197,600

 

326,481

 

*

 

Mr. Robert A. Breyer

 

7,156

 

133,000

 

140,156

 

*

 

Dr. Wendy L. Dixon

 

1,600

 

172,600

 

174,200

 

*

 

Mr. Paul J. Mitchell

 

8,000

 

193,100

 

201,100

 

*

 

Mr. Richard F. Pops

 

630,406

 

2,876,250

 

3,506,656

 

2.29%

 

Dr. Nancy L. Snyderman

 

 —

 

 —

 

 —

 

*

 

Ms. Nancy J. Wysenski

 

 —

 

128,850

 

128,850

 

*

 

Ms. Kathryn L. Biberstein

 

148,904

 

641,358

 

790,262

 

*

 

Mr. Shane Cooke

 

71,948

 

409,000

 

480,948

 

*

 

Dr. Elliot W. Ehrich

 

55,071

 

215,051

 

270,122

 

*

 

Mr. James M. Frates

 

192,077

 

398,282

 

590,359

 

*

 

All Directors and Executive officers as a group (16 persons)

 

1,517,402

 

6,660,126

 

8,177,528

 

5.34%

 

 

            

            

 

*

Represents less than one percent (1%) of outstanding ordinary shares.

(1)  

Shares that can be acquired through stock options exercisable and restricted stock unit awards vesting by May 30, 2017, which is 60 days from the Record Date.

(2)

Applicable percentage of ownership as of the Record Date is based upon 153,098,864 ordinary shares issued and outstanding.

 

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Ownership By Principal Shareholders

 

The following table and notes provide information about the beneficial ownership of our ordinary shares as of the Record Date, or as of the date otherwise set forth below, by each shareholder known to us to be the beneficial owner of more than 5% of our ordinary shares.

 

Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, it is believed that each shareholder identified in the table possesses sole voting and investment power over all of our ordinary shares shown as beneficially owned by that shareholder. The percentages of beneficial ownership listed below are based on Schedule 13D and Schedule 13G filings made with the SEC as of the Record Date and based on 153,098,864 of our ordinary shares issued and outstanding as of the Record Date.

 

 

 

 

 

 

 

 

 

Number of Ordinary Shares Beneficially Owned

 

Percent

 

FMR LLC (1)

    

22,795,572

    

14.89%

 

245 Summer Street

 

 

 

 

 

Boston, MA 02210

 

 

 

 

 

 

 

 

 

 

 

Wellington Management Company, LLP (2)

 

21,264,875

 

13.89%

 

280 Congress Street

 

 

 

 

 

Boston, MA 02210

 

 

 

 

 

 

 

 

 

 

 

T. Rowe Price Associates, Inc. (3)

 

18,440,121

 

12.04%

 

100 E. Pratt Street

 

 

 

 

 

Baltimore, MD 21202

 

 

 

 

 

 

 

 

 

 

 

The Vanguard Group (4)

 

11,599,214

 

7.58%

 

100 Vanguard Blvd.

 

 

 

 

 

Malvern, PA 19355

 

 

 

 

 

 

 

 

 

 

 

Blackrock, Inc.(5)

 

9,816,823

 

6.41%

 

55 East 52nd Street

 

 

 

 

 

New York, NY 10055

 

 

 

 

 

 

 

 

 

 

 

Vanguard Specialized Funds - Vanguard Health Care Fund (6)

 

8,660,076

 

5.66%

 

100 Vanguard Blvd.

 

 

 

 

 

Malvern, PA 19355

 

 

 

 

 

 

            

            

 

(1)  

Based solely on a Schedule 13G/A dated February 14, 2017, FMR LLC, a parent holding company, has sole voting power over 4,403,370 ordinary shares of Alkermes and sole dispositive power over 22,795,572 ordinary shares of Alkermes. Of the shares reported as beneficially owned by FMR LLC:

 

Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees.

53


 

(2)

Based solely on a Schedule 13G/A filed February 9, 2017 by Wellington Management Group LLP (“Wellington Management”), Wellington Group Holdings LLP (“Wellington Holdings”), Wellington Investment Advisors Holdings LLP (“Wellington Advisors”) and Wellington Management Company LLP (“Wellington Company”). These shares are owned of record by clients of Wellington Company, Wellington Management Canada LLC, Wellington Management Singapore Pte Ltd, Wellington Management Hong Kong Ltd, Wellington Management International Ltd, Wellington Management Japan Pte Ltd, Wellington Management Australia Pty Ltd (collectively, the “Wellington Investment Advisors”). Wellington Advisors controls directly or indirectly through Wellington Management Global Holdings Ltd., the Wellington Investment Advisors. Wellington Advisors is owned by Wellington Holdings and Wellington Holdings is owned by Wellington Management. The clients of the Wellington Investment Advisors have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such shares. No such client is known to have such right or power with respect to more than five percent of this class of securities, except for Vanguard Health Care Fund. Each of Wellington Management, Wellington Holdings and Wellington Advisors has shared voting power over 9,856,380 ordinary shares and shared dispositive power over 21,264,875 ordinary shares. Wellington Company has shared voting power over 9,033,368 ordinary shares and shared dispositive power over 19,988,869 ordinary shares.

(3)

Based solely on a Schedule 13G/A filed February 6, 2017. T. Rowe Price Associates, Inc. (“Price Associates”) has sole voting power over 4,451,440 ordinary shares and sole dispositive power over 18,440,121 ordinary shares. Price Associates does not serve as custodian of the assets of any of its clients; accordingly, in each instance only the client or the client’s custodian or trustee bank has the right to receive dividends paid with respect to, and proceeds from the sale of, such securities. The ultimate power to direct the receipt of dividends paid with respect to, and the proceeds from the sale of, such securities, is vested in the individual and institutional clients which Price Associates serves as investment adviser. Any and all discretionary authority which has been delegated to Price Associates may be revoked in whole or in part at any time.

(4)

Based solely on a Schedule 13G/A, filed February 8, 2017, The Vanguard Group, in its capacity as investment adviser, may be deemed to beneficially own 11,599,214 ordinary shares of Alkermes. The Vanguard Group has sole voting power over 122,942 ordinary shares of Alkermes, sole dispositive power over 11,452,731 ordinary shares of Alkermes and shared dispositive power over 146,483 ordinary shares of Alkermes. The number of ordinary shares as to which The Vanguard Group has shared power to vote is 27,041.

(5)

Based solely on a Schedule 13G/A filed January  19, 2017, Blackrock, Inc., as a parent holding company or control person, beneficially owns 9,816,823 ordinary shares of Alkermes. Blackrock, Inc. has sole voting power over 8,834,873 ordinary shares of Alkermes and has sole dispositive power over 9,816,823 ordinary shares of Alkermes. Various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the ordinary shares of Alkermes. No one person’s interest in the ordinary shares of Alkermes is more than five percent of the total outstanding ordinary shares.

(6)

Based solely on a Schedule 13G, filed February 13, 2017, The Vanguard Specialized Funds may be deemed to beneficially own 8,660,076 ordinary shares of Alkermes. The Vanguard Specialized Funds has sole voting power over 8,660,067 ordinary shares of Alkermes. The number of ordinary shares as to which the Vanguard Specialized Funds has shared power to vote or dispose is zero.

 

 

54


 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who beneficially own more than ten percent of our ordinary shares, to file with the SEC initial reports of ownership and reports of changes in ownership of our ordinary shares.

 

Executive officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely on review of the copies of such reports furnished to the Company during 2016, all reports were timely filed.

 

COMPANIES ACT

 

Under the Companies Act,  our shareholders must notify us if, as a result of a transaction, the shareholder will become interested in 3% or more of our shares; or if as a result of a transaction a shareholder who was interested in more than 3% of our shares ceases to be so interested. Where a shareholder is interested in more than 3% of our shares, the shareholder must notify us of any alteration of his or her interest that brings his or her total holding through the nearest whole percentage number, whether an increase or a reduction. The relevant percentage figure is calculated by reference to the aggregate nominal value of the shares in which the shareholder is interested as a proportion of the entire nominal value of our issued share capital (or any such class of share capital in issue). Where the percentage level of the shareholder’s interest does not amount to a whole percentage this figure may be rounded down to the next whole number. We must be notified within five business days of the transaction or alteration of the shareholder’s interests that gave rise to the notification requirement. If a shareholder fails to comply with these notification requirements, the shareholder’s rights in respect of any our ordinary shares it holds will not be enforceable, either directly or indirectly. However, such person may apply to the court to have the rights attaching to such shares reinstated.

 

55


 

REPORT OF THE COMPENSATION COMMITTEE

 

No portion of this compensation committee report shall be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.

 

The Compensation Committee of the Board, which is comprised solely of (i) independent directors within the meaning of applicable rules of Nasdaq, (ii) outside directors within the meaning of Section 162 of the Code, and (iii) non-employee directors within the meaning of Rule 16b-3 under the Exchange Act, has reviewed and discussed with management the Compensation Discussion and Analysis section of this proxy statement for 2016. In reliance on the reviews and discussions referred to above, the Compensation Committee has approved the Compensation Discussion and Analysis, and the Board has approved the Compensation Discussion and Analysis for inclusion in this proxy statement.

 

Respectfully submitted by the Compensation Committee,

 

David W. Anstice (Chair)

Paul J. Mitchell

Nancy J. Wysenski

 

For more information about the Compensation Committee and its charter, you are invited to access the Corporate Governance page of the Investors section of our website, available at http://investor.alkermes.com.

 

56


 

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

 

This section discusses our executive compensation policies and arrangements as they relate to the following individuals to whom we refer as our named executive officers for 2016:

 

Chairman of the Board and Chief Executive Officer, Richard F. Pops;

 

Senior Vice President, Chief Financial Officer and Treasurer, James M. Frates;

 

President, Shane M. Cooke;

 

Executive Vice President, Research and Development and Chief Medical Officer, Elliot W. Ehrich, M.D.; and

 

Executive Vice President, Chief Compliance Officer and Chief Administrative Officer, Kathryn L. Biberstein. Ms. Biberstein was also appointed the Chief Risk Officer of the Company in February 2017.

 

Introduction

 

The Compensation Committee, or the Committee, reviews, oversees and administers our executive compensation programs. The Committee’s complete roles and responsibilities are set forth in the Committee’s written charter adopted by the Board, which is available on the Corporate Governance page of the Investors section of our website, available at: http://investor.alkermes.com. David W. Anstice (chair), Paul J. Mitchell and Nancy J. Wysenski served on the Committee during 2016, and these directors continue to serve on the Committee.

 

Executive Compensation Philosophy and Objectives

 

Our executive compensation program is designed to attract, retain and motivate experienced and well-qualified executive officers who will meaningfully contribute to our research and product development, manufacturing, commercialization, and operational efforts. We structure our executive officer compensation packages based on level of job responsibility, external peer comparisons, individual performance, and our overall Company performance. We target the 50th percentile for all elements of pay, with the opportunity to increase or decrease the variable elements of pay from the 50th percentile based on performance. The Committee established our executive compensation programs around the same set of objectives that guide us in establishing all of our compensation programs, which are:

 

to provide an overall compensation package that rewards individual performance and corporate performance in achieving our objectives, as a means to promote the creation and retention of value for us and our shareholders;

 

to attract and retain a highly skilled work force by providing a compensation package that is competitive with other employers who compete with us for talent;

 

to structure an increasing proportion of an individual’s compensation as performance-based as such person progresses to higher levels within our Company;

 

to foster the long-term focus required for success in the biopharmaceutical industry;

 

to mitigate the likelihood of inducing excessive risk-taking behavior; and

 

to structure our compensation and benefits programs similarly across our Company.

 

Highlights

 

We believe our executive compensation programs are effectively designed and have worked well to achieve our compensation objectives, which are aligned with the interests of our shareholders.

 

At our 2012 Annual General Meeting of Shareholders, a majority of our shareholders supported an annual non-binding, advisory vote on our executive compensation and, in response, our Board determined to hold an annual vote on the matter. In accordance with the SEC’s rules, in our proxy statement for our 2018 Annual General Meeting of

57


 

Shareholders, we intend to include a non-binding, advisory shareholder proposal to ask our shareholders how frequently they recommend voting on our executive compensation program, which is sometimes referred to as Say on Pay Frequency. In 2016, we submitted our executive compensation program to an advisory vote of our shareholders, and it received the support of over 92% of the total votes cast at our 2016 Annual General Meeting of Shareholders. The Committee believes that our shareholders, through this advisory vote, endorsed our compensation philosophies.

 

The Committee maintained the basic structure and design of our executive compensation programs for 2016.

 

Compensation Program Elements

 

The compensation program for executive officers consists of the following elements:

 

base salary;

 

annual cash performance pay (bonus); and

 

long-term equity incentive awards, including:

 

ostock options;

 

otime-vesting restricted stock unit awards; and

 

operformance-vesting restricted stock unit awards.

 

The Committee utilizes these elements of compensation to structure compensation packages for executive officers that can reward both short- and long-term performance of the individual and our Company and foster executive retention.

 

Base Salary

 

Base salaries are used to provide a fixed amount of compensation for the executive’s regular work. The Committee establishes base salaries for executive officers that are competitive with comparable companies for each position and level of responsibility to the extent such comparable companies and positions exist. Any base salary increase for an executive officer must be approved by the Committee. In determining increases, if any, to the base salary of our executive officers, the Committee considers factors such as the individual’s performance, level of pay compared to comparable companies for each position and level of responsibility, experience of the individual in the position, cost-of-living indices, the magnitude of other annual salary increases at our Company and the achievement of the corporate objectives for the fiscal year. Base salary reviews for our executive officers occur once a year after the conclusion of the fiscal year.

 

Cash Performance Pay

 

Cash performance pay motivates executive officers to achieve both short-term operational and longer-term strategic goals that are aligned with, and supportive of, our long-term Company value. Any cash performance pay for an executive officer must be approved by the Committee. Cash performance pay is awarded by the Committee to executive officers after the fiscal year-end based on an evaluation of our Company performance and each individual’s contribution to this performance during the prior fiscal year. The Committee also considers data provided by its independent compensation consultant regarding total cash compensation of each executive officer in light of comparable market data. Performance objectives are established prior to the start of the performance period and evaluated by the Committee as outlined below.

 

In December 2015, the Committee approved the Alkermes plc Affiliated Company Fiscal Year 2016 Reporting Officer Performance Pay Plan (“2016 Performance Plan”) and established performance pay ranges and target performance pay that may be earned by our reporting officers, including all of our named executive officers, for the performance period coinciding with 2016 (January 1, 2016 to December 31, 2016). The 2016 Performance Plan contained the following corporate objectives for our executives: (i) secure and improve coverage and access for

58


 

VIVITROL and ARISTADA; (ii) expand advocacy efforts for improved treatment of schizophrenia and for use of evidence-based medication-assisted treatment for addiction; (iii) complete FORWARD pivotal program for ALKS 5461, and, if results are positive, prepare the New Drug Application, or the NDA, for submission with the U.S. Food and Drug Administration (“FDA”); (iv) execute pivotal development programs for ALKS 3831 and ALKS 8700; (v) advance two early development compounds into the clinic and expand capabilities for further pipeline candidates; (vi) manufacture commercial products and clinical trial material to meet our goals of quality, reliability and efficiency; (vii) achieve financial guidance for revenue and non-GAAP earnings; and (viii) respond to changing business conditions.

 

In December 2015, the Committee set the performance pay range and the target performance pay for the 2016 cash performance pay award under the 2016 Performance Plan, for: (i) Mr. Pops at between 0% and 200% of his base salary, with a target of 100% of his base salary; (ii) Mr. Cooke at between 0% and 150% of his base salary, with a target of 75% of his base salary; (iii) Dr. Ehrich and Ms. Biberstein at between 0% to 130% of their base salaries, with a target of 65%; and (iv) Mr. Frates at between 0% and 100% of his base salary, with a target of 50% of his base salary. The Committee, after consulting its independent compensation consultant, established such performance pay targets and performance pay ranges based generally on comparable market data.

 

Equity Incentives—Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards

 

We currently grant equity awards under the Amended and Restated 2008 Stock Option and Incentive Plan, as amended (the “2008 Plan”) and the 2011 Stock Option and Incentive Plan, as amended (the “2011 Plan” and, together with the 2008 Plan, the “Equity Plans”). Each full value award issued under our 2008 Plan and our 2011 Plan, such as the grant of a restricted stock unit or performance share unit, counts as two share units for each ordinary share subject to the award and 1.8 share units for each ordinary share subject to the award, respectively, and each grant of a stock option issued under our Equity Plans counts as an award of one share unit for each ordinary share actually subject to the stock option.

 

The award of stock options (both incentive and non-qualified options), restricted stock awards, restricted stock unit awards, cash-based awards and performance share awards is permitted under the Equity Plans. All of our equity grants are made pursuant to the Equity Plans. As used herein, the term “stock award,” unless otherwise specified, will include restricted stock unit awards, restricted stock awards and performance share awards.

 

Grants of stock options and stock awards under our Equity Plans are designed to promote long-term retention and stock ownership, and align the interests of executives with those of shareholders, providing our executives with the opportunity to share in the future value they are responsible for creating. Generally, stock options and non-performance-based stock awards vest in equal annual installments over a four-year period. The Committee may, in its discretion, award equity with a different vesting schedule, provided that restricted stock awards and restricted stock unit awards may not vest, and stock options may not become exercisable, until one year from the date of grant at the earliest, and restricted stock awards and restricted stock unit awards with a time-based restriction are required to have at least a three-year restriction period, although vesting can occur incrementally over such three-year period.

 

Any equity granted to an executive officer must be approved and granted by the Committee. The number of shares underlying options and stock awards granted to each executive officer is determined by the Committee based on the performance of the executive; his or her contributions to overall performance of our Company; stock option grants and stock awards at comparable companies, and generally within the biopharmaceutical industry, based upon data provided by the independent compensation consultant (as discussed below) and the personal knowledge of Committee members; the dollar value of stock awards and stock option awards, as determined using the Black-Scholes option pricing model; consideration of previous equity awards made to each such executive officer; the total cash compensation of each such executive officer; the retention value of aggregate equity held by each such executive officer; and equity overhang and utilization calculations. Consideration is also given to the accounting impact of stock options and stock awards on our financial statements.

 

The Committee selectively utilizes a combination of stock options, time-vesting restricted stock unit awards and performance-vesting restricted stock unit awards in designing its equity compensation for Company employees. The Committee believes that utilizing restricted stock unit awards that vest on the achievement of key milestones for the

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Company in addition to time-vesting restricted stock unit awards and stock options, serves to align executive compensation with events that drive value for our shareholders. The Committee also believes that using a combination of restricted stock unit awards and stock option awards is more effective than either type of award alone in rewarding and retaining key employees and motivating executives to increase shareholder value. In this context, the Committee balances the mix of stock options and restricted stock unit awards such that executives receive a greater proportion of stock options than restricted stock unit awards, senior directors receive a more balanced mixture of stock options compared to restricted stock unit awards, and other of our key employees receive a greater proportion of restricted stock unit awards.

 

The Company no longer provides any employee with additional time to exercise or early vesting of stock options on retirement as part of its grant of stock option awards. Such retirement benefits were phased out by the Committee for stock option grants beginning in May 2010 in order to maximize the retentive value of our stock option grants. There are no special retirement provisions associated with stock awards, nor have there been in the past.

 

In the event of termination due to death or permanent disability, stock options granted become fully vested and the period to exercise the stock option is extended to three years from the date of termination of employment due to death or permanent disability, not to exceed the full term of the grant. Restricted stock awards and restricted stock unit awards with a time-based restriction vest in full in the event of termination of employment due to death or permanent disability. Currently outstanding restricted stock awards and restricted stock unit awards with a performance-based restriction vest at the target grant amount in the event of termination of employment due to death or permanent disability, with the remainder of such performance-based award, if any, forfeited.

 

Except for a sale event or certain other events resulting in a change to our ordinary shares, as further described in the Equity Plans, without prior shareholder approval, the exercise price of outstanding stock options or stock appreciation rights cannot be reduced or repriced through cancellation and re-grant and outstanding stock options or stock appreciation rights cannot be cancelled in exchange for cash or another award.

 

Compensation Determinations

 

Factors Considered in Determining Compensation

 

The Committee may consider a number of factors to assist it in determining compensation for our executive officers.

 

Company Performance

 

The Committee adopted eight corporate objectives to measure the performance of our Company and its senior executives for 2016.

 

 

 

 

Corporate Objective

 

Accomplishments

Secure and improve coverage and access for VIVITROL® and ARISTADA®