UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 2, 2012
QUIDEL CORPORATION
(Exact name of Registrant as specified in its Charter)
| Delaware |
0-10961 | 94-2573850 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 10165 McKellar Court San Diego, California |
92121 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (858) 552-1100
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective March 2, 2012, the Compensation Committee of the Board of Directors of Quidel Corporation (the “Company”) approved the Company’s 2012 cash incentive plan applicable to the Company’s executive officers and other members of management for the Company’s fiscal year ending December 31, 2012 (the “2012 Cash Incentive Compensation Plan”). Payout under the 2012 Cash Incentive Compensation Plan is predicated upon achievement of (i) revenue targets for core products, (ii) revenue targets for new products, (iii) an earnings-per-share goal, and (iv) defined impact goals, with each of the foregoing as determined by the Board of Directors and/or its Compensation Committee, for the Company’s 2012 fiscal year. A description of the 2012 Cash Incentive Compensation Plan and related target bonuses are set forth on Exhibit 10.1 hereto and are incorporated by reference herein.
In addition, effective December 5, 2011, the Compensation Committee approved the Company’s Employee Deferred Bonus Compensation Program (the “2012 Employee Deferred Bonus Compensation Program”). A description of the 2012 Employee Deferred Bonus Compensation Program is set forth on Exhibit 10.2 hereto and is incorporated by reference herein.
On March 2, 2012, the Compensation Committee also approved the Company’s 2012 Equity Incentive Plan (the “2012 Equity Incentive Plan”). The 2012 Equity Incentive Plan provides for grants of equity awards to eligible employees of the Company, including the Company’s executive officers, subject to the terms described below and as set forth on Exhibit 10.3 hereto.
Under the 2012 Equity Incentive Plan, each participating employee receives equity incentive awards in the form of (i) non-qualified stock options; and (ii) performance-based restricted stock units. The vesting period for the non-qualified stock options is four years with the first 50% of such stock options vesting at the end of the second-year anniversary of the grant date and the remainder vesting 25% annually on each of the following two anniversaries thereafter. Vesting for the performance-based restricted stock units has a three-year cliff and is tied to achievement of a performance metric of compounded annual growth rate in earnings-per-share (EPS) in 2014 compared to a baseline EPS determined by the Compensation Committee for 2011. In addition, in the event that the Company achieves certain elevated performance metrics prior to the end of the three-year vesting period (defined by the Compensation Committee with pre-determined elevated EPS targets in either 2012 or 2013), the performance-base restricted stock units will be deemed to have met the performance requirements and will convert to time-based vesting for the remainder of the three-year term.
On March 2, 2012, the Compensation Committee approved a three percent (3%) increase in the annual base salary for each of the Company’s executive officers, with all such annual base salary increases effective as of the Company’s pay period beginning on March 5, 2012 (collectively and as set forth on Exhibit 10.4 hereto, the “2012 Annual Base Salaries”). The 2012 Annual Base Salaries are set forth on Exhibit 10.4 hereto and are incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
The following exhibits are filed with this current report on Form 8-K:
| Exhibit |
Description of Exhibit | |
| 10.1 | 2012 Cash Incentive Compensation Plan. | |
| 10.2 | 2012 Employee Deferred Bonus Compensation Program. | |
| 10.3 | 2012 Equity Incentive Plan Grants to the Company’s Executive Officers. | |
| 10.4 | 2012 Annual Base Salaries for the Company’s Executive Officers, effective as of March 5, 2012. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 6, 2012
| QUIDEL CORPORATION | ||
| By: | /s/ Randall J. Steward | |
| Name: | Randall J. Steward | |
| Its: | Chief Financial Officer | |
EXHIBIT INDEX
| Exhibit |
Description of Exhibit | |
| 10.1 | 2012 Cash Incentive Compensation Plan. | |
| 10.2 | 2012 Employee Deferred Bonus Compensation Program. | |
| 10.3 | 2012 Equity Incentive Plan Grants to the Company’s Executive Officers. | |
| 10.4 | 2012 Annual Base Salaries for the Company’s Executive Officers, effective as of March 5, 2012. | |
Exhibit 10.1
2012 Cash Incentive Compensation Plan
Eligible Employees: All managers, directors, vice presidents and senior executives of the Company are eligible for participation in the Company’s 2012 Cash Incentive Compensation Plan.
Applicable Period: The 2012 Cash Incentive Program applies to performance during the Company’s fiscal year ending December 31, 2012.
Components of the Plan and Criteria to Fund: The 2012 Cash Incentive Compensation Plan consists of the following four components (1) revenue performance on core products, (2) revenue performance on new products, (3) earnings- per-share, and (4) defined impact goals. Each component of the 2012 Cash Incentive Compensation Plan includes targets at minimum, plan, and maximum payout. The minimum targets serve as the threshold upon which the incentive pool will begin to fund for that component. Achievement of the components at plan/target will earn the target cash incentive opportunity. Payout will be calculated along a linear continuum from minimum to plan/target and from plan/target to maximum with the maximum target serving as the point at which the management team will earn the highest possible cash incentive opportunity.
The minimum performance target must be met in order for a portion of the bonus to be paid relative to any one of the four components. Each component will be measured separately. Bonus payout to corporate officers (Senior Vice Presidents and above) will be based seventy (70%) percent on achievement of revenue and earnings-per-share goals and thirty (30%) percent on corporate impact goals. Bonus payout to Vice Presidents and below will be based seventy (70%) percent on achievement of revenue and earnings-per-share goals and thirty (30%) percent on individual impact goals.
The following table below represents the target bonus and maximum bonus for each of the Company’s Vice Presidents and above and as a percent of such employee’s annual base salary.
| Executive Officer |
Target | Maximum | ||||||
| President and CEO |
80 | % | 120 | % | ||||
| Senior Vice Presidents |
40 | % | 60 | % | ||||
| Vice Presidents |
30 | % | 45 | % | ||||
Exhibit 10.2
2012 Employee Deferred Bonus Compensation Program
Eligible Employees and Time for Election: All members of Quidel Corporation’s (the “Company’s”) management review board may elect to participate in this deferred compensation program (this “Program”). Elections must be made and received by the Company no later than December 23, 2011. After December 23, 2011, all employee elections become irrevocable and may not be withdrawn.
Bonus Amount to Be Deferred: Eligible employees may elect to receive 50% or 100% of the cash value of his or her 2012 cash bonus (the “Covered Bonus”) (payable (if applicable) per the terms and conditions of the Company’s 2012 Leadership Incentive Compensation Plan (Cash)) in the form of fully vested, restricted stock units (the “Converted RSUs”) plus an additional premium on such percentage of the Covered Bonus as additional restricted stock units, which are subject to a one-year vesting requirement (the “Premium RSUs”).
Applicable Premium: The additional premium applicable to the Premium RSUs shall be determined based on the length of time of the deferral period (between the date of grant and the date the shares of common stock underlying the RSUs are selected to be issued) selected by the participating employee as follows: (i) if one (1) year from the date of grant, a premium of 10% on the amount deferred of the Covered Bonus, (ii) if two (2) years from the date of grant, a premium of 20% on the amount deferred of the Covered Bonus, or (iii) if four (4) years from the date of grant, a premium of 30% on the amount deferred of the Covered Bonus.
Vesting Schedule: The Converted RSUs will be fully vested on the grant date. The Premium RSUs will be fully vested on the first anniversary of the grant date.
Issuance of Shares of Common Stock Underlying the RSUs: Subject to the terms and conditions in the grant award agreement, the issuance of the shares of common stock underlying Converted RSUs will be issued as soon as administratively practicable after the earliest of (1) the end of the deferral period selected by the participating employee, (2) the participating employee’s separation from service to the Company (as described in Section 409A(a)(2)(A)(i) of the Internal Revenue Code, as amended (the “Code”) and related guidance thereunder), and (3) a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company (as described in Code Section 409A(a)(2)(A)(v) and related guidance thereunder) (a “Change in Control”). The shares of common stock underlying the Premium RSUs will have the same applicable issuance periods as outlined in the foregoing sentence for Converted RSUs with acceleration of the one-year vesting requirement in connection with a Change in Control, provided, however, that if a participating employee’s service is terminated for any reason (outside of a Change in Control) prior to the one-year vesting requirement, the Premium RSUs shall be forfeited and cancelled as of the date of such termination of service.
Additional Terms and Acknowledgments: Each participating employee acknowledges and agrees that the awards provided under the Program shall be pursuant to the terms of a Grant Notice and an Award Agreement and further governed by the Program and the Company’s 2010 Equity Incentive Plan.
Exhibit 10.3
2012 Equity Incentive Plan
The 2012 Equity Incentive Plan provides for the issuance of equity incentive awards in the form of (i) non-qualified stock options; and (ii) performance-based restricted stock units.
| Executive Officer |
Performance-Based Restricted Stock Units (# shares) |
Non-Qualified Stock Options (# shares) |
||||||
| Douglas Bryant President and Chief Executive Officer |
5,618 | 120,393 | ||||||
| Robert Bujarski Senior Vice President, Business Development and General Counsel |
1,962 | 42,038 | ||||||
| Scot McLeod Senior Vice President, Operations |
1,452 | 31,125 | ||||||
| Mark Smits Senior Vice President, Commercial Operations, North America |
1,635 | 35,031 | ||||||
| Timothy Stenzel Chief Scientific Officer |
1,962 | 42,038 | ||||||
| Randall Steward Chief Financial Officer |
1,452 | 31,125 | ||||||
| John Tamerius Senior Vice President, Clinical and Regulatory Affairs |
1,635 | 35,031 | ||||||
The vesting period for the non-qualified stock options is four years with the first 50% of such stock options vesting at the end of the second-year anniversary of the grant date and the remainder vesting 25% annually on each of the following two anniversaries thereafter. Vesting for the performance-based restricted stock units has a three-year cliff and is tied to achievement of a performance metric of compounded annual growth rate in earnings-per-share (EPS) in 2014 compared to a baseline EPS determined by the Compensation Committee for 2011. In addition, in the event that the Company achieves certain elevated performance metrics prior to the end of the three-year vesting period (defined by the Compensation Committee with pre-determined elevated EPS targets in either 2012 or 2013), the performance-base restricted stock units will be deemed to have met the performance requirements and will convert to time-based vesting for the remainder of the three-year term.
Exhibit 10.4
2012 Annual Base Salaries
| Executive Officer |
Prior Base Salary | 2012 Base Salary | ||||||
| Douglas C. Bryant President and Chief Executive Officer |
$ | 482,040 | $ | 496,501 | ||||
| Robert J. Bujarski Senior Vice President, Business Development and General Counsel |
$ | 311,472 | $ | 320,816 | ||||
| Scot M. McLeod Senior Vice President, Operations |
$ | 276,841 | $ | 285,146 | ||||
| Mark Smits Senior Vice President, Commercial Operations, North America |
$ | 285,000 | $ | 290,700 | * | |||
| Timothy T. Stenzel Chief Scientific Officer |
$ | 299,421 | $ | 308,404 | ||||
| Randall Steward Chief Financial Officer |
$ | 300,000 | $ | 303,000 | * | |||
| John D. Tamerius Senior Vice President, Clinical and Regulatory Affairs |
$ | 281,726 | $ | 290,178 | ||||
| * | Prorated salary increase for those hired by the Company in calendar year 2011. |