Exhibit 10.4

 

AMAG PHARMACEUTICALS, INC.

 

Non-Employee Director Compensation Policy

 

The Board of Directors (the “Board”) of AMAG Pharmaceuticals, Inc. (the “Company” or “AMAG”) has approved the following policy which establishes compensation to be paid to non-employee directors of the Company, effective as of January 1, 2012, which policy supersedes in its entirety the policy previously amended and restated on May 25, 2010, to provide an inducement to obtain and retain the services of qualified persons to serve as members of the Company’s Board.  Each such director will receive as compensation for his or her services equity grants and cash compensation, all as further set forth herein.

 

Applicable Persons

 

This Policy shall apply to each director of the Company who is not an employee of the Company or any Affiliate (each, an “Outside Director”).  Affiliate shall mean a corporation which is a direct or indirect parent or subsidiary of the Company, as determined pursuant to Section 424 of the Internal Revenue Code of 1986, as amended.

 

Equity Grants

 

Equity Grant Upon Initial Appointment or Election as a Director

 

Each new Outside Director, on the date of his or her initial appointment or election to the Board, will receive an equity grant comprised of two components: (i) an inducement grant and (ii) an annual grant.

 

As an inducement to joining the Board, each new Outside Director will be granted a non-qualified stock option to purchase 6,000 shares of the Company’s common stock pursuant to the Company’s Second Amended and Restated 2007 Equity Incentive Plan (the “Stock Plan”), subject to automatic adjustment in the event of any stock split or other recapitalization affecting the Company’s common stock.  Such option shall vest in equal monthly installments over a period of two years from the date of his or her election to the Board, provided such Outside Director continues to serve as a member of the Board.

 

Upon joining the Board, each new Outside Director who joins the Board subsequent to the date of the Annual Meeting of Stockholders will also receive an annual equity grant of non-qualified stock options and restricted stock units (“RSUs”) on the date of his or her appointment or election as described below under the heading “Annual Equity Grant;” provided, that the amount of options and RSUs granted to such new Outside Director will be pro-rated based on the number of expected months of service before the next Annual Meeting of Stockholders; provided further, that such options and RSUs will vest in equal monthly installments beginning on the first day of the first full month following appointment or election and continuing on the first day of each month thereafter through the first day of the month in which the next Annual Meeting of

 











 

Stockholders is to be held, so long as the newly-appointed Outside Director continues to serve as a member of the Board.

 

Annual Equity Grant

 

At the first meeting of the Board following the Annual Meeting of Stockholders, each Outside Director, other than the Chair, will be provided an equity grant comprised of (i) a non-qualified stock option to purchase 3,800 shares of the Company’s common stock and (ii) RSUs covering a total of 2,300 shares of the Company’s common stock, in each case pursuant to the Stock Plan and subject to automatic adjustment in the event of any stock split or other recapitalization affecting the Company’s common stock. The foregoing equity grants are intended to provide each Outside Director with an equity grant comparable in value to annual grants provided to non-employee directors of companies in AMAG’s then current peer group as established by the Compensation Committee of the Board (the “Compensation Committee”). The foregoing options and RSUs will vest in twelve equal monthly installments beginning on the first day of the first full month following the Annual Meeting of Stockholders and continuing on the first day of each of the following eleven months thereafter, so long as the Outside Director continues to serve as a member of the Board; provided, that delivery of any vested shares of common stock underlying the foregoing RSUs shall be deferred until the earlier of (i) the third anniversary of the date of grant or (ii) the date the Outside Director’s service to the Company terminates; provided, that such termination constitutes a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1(h).

 

At the first meeting of the Board following the Annual Meeting of Stockholders, the Chair of the Board, provided that he or she is also an Outside Director, will be provided an equity grant comprised of (i) a non-qualified stock option to purchase 7,600 shares of the Company’s common stock and (ii) RSUs covering a total of 3,800 shares of the Company’s common stock, in each case pursuant to the Stock Plan and subject to automatic adjustment in the event of any stock split or other recapitalization affecting the Company’s common stock.  The foregoing options and RSUs will vest in twelve equal monthly installments beginning on the first day of the first full month following the Annual Meeting of Stockholders and continuing on the first day of each of the following eleven months thereafter, so long as the Chair continues to serve as a member of the Board; provided, that delivery of any vested shares of common stock underlying the foregoing RSUs shall be deferred until the earlier of (i) the third anniversary of the date of grant or (ii) the date the Chair’s service to the Company terminates; provided, that such termination constitutes a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1(h).

 

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Exercise Price and Term of Options

 

Each option granted to an Outside Director shall have an exercise price per share equal to the fair market value of the common stock of the Company on the date of grant of the option (as determined by the Board in accordance with the Stock Plan), have a term of ten years and shall be subject to the terms and conditions of the Stock Plan.  Each such option grant shall be evidenced by the issuance of the Company’s form non-qualified stock option agreement for Outside Director grants.

 

Early Termination of Options or RSUs Upon Termination of Service

 

If an Outside Director ceases to be a member of the Board for any reason, any then vested and unexercised options granted to such Outside Director may be exercised by the Outside Director (or, in the case of the director’s death or disability, by the director’s personal representative, or the director’s survivors) within three years after the date the director ceases to be a member of the Board and in no event later than the expiration date of the option.

 

If an Outside Director’s service to the Company is terminated (provided, that such termination constitutes a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1(h)), all then vested and undelivered shares underlying any RSUs held by such Outside Director shall be delivered to the Outside Director (or, in the case of the director’s death or disability, by the director’s personal representative, or the director’s survivors) as of the date he or she ceases to be a member of the Board.

 

Retainer Fees

 

Each Outside Director, other than the Chair, will receive an aggregate annual retainer fee of $30,000, payable in four equal quarterly installments. The Chair, provided that he or she is also an Outside Director, will receive an aggregate annual retainer fee of $60,000, payable in four equal quarterly installments.

 

Each member of each of the Company’s standing committees, other than the Chair, will also be paid an additional aggregate annual retainer fee in four equal quarterly installments as follows:

 

Audit Committee: $10,000

Compensation Committee: $7,500

Nominating and Corporate Governance Committee: $5,000

 

The Chair of each of the standing committees will be paid an additional aggregate annual retainer fee in four equal quarterly installments as follows:

 

Audit Committee: $20,000

Compensation Committee: $15,000

Nominating and Corporate Governance Committee: $10,000

 

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Per Meeting Fees

 

In addition to the foregoing retainer fees, each Outside Director will receive (i) a per meeting fee of $1,000 for each meeting of the full Board attended by such Outside Director, (ii) a per meeting fee of $500 for each meeting of each standing Committee of the Board (Audit, Compensation, and Nominating and Corporate Governance) attended by such Outside Director, (iii) a per meeting fee of $1,000 for each meeting of any ad hoc Committee of the full Board attended by such Outside Director (other than the Chair of such Committee), and (iv) a per meeting fee of $2,000 for each meeting of any ad hoc Committee of the Board attended by the Chair of such ad hoc Committee; provided, that he or she is an Outside Director.

 

The foregoing per meeting fees will be paid by the Company quarterly in arrears.

 

Expenses

 

Upon presentation of documentation of such expenses reasonably satisfactory to the Company, each Outside Director shall be reimbursed for his or her reasonable out-of-pocket business expenses incurred in connection with attending meetings of the Board, Committees thereof or in connection with other Board related business.

 

Amendments

 

The Board shall review this Policy from time to time to assess whether any amendments in the type and amount of compensation provided herein should be adjusted in order to fulfill the objectives of this Policy.

 

Interpretation of Policy

 

Any interpretation of or decisions regarding the application of this Policy shall be made by the Compensation Committee of the Board.

 

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