- Current report filing (8-K)
December 10 2010 - 3:41PM
Edgar (US Regulatory)
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): December 7, 2010
eResearchTechnology,
Inc.
(Exact name of registrant as
specified in its charter)
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Delaware
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0-29100
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22-3264604
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(State or other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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1818 Market Street,
Philadelphia, PA
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19103
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number,
including area code:
215-972-0420
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(Former name or former address if changed since last report.)
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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:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
1
ITEM 5.02 DEPARTURE OF DIRECTORS OR
CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
Election of Directors
On December 7, 2010, the Board of
Directors of eResearchTechnology, Inc. (the “Board”), upon the
recommendation of its Governance and Nominating Committee, increased the number
of directors from eight to nine and elected Klaus Besier to fill the vacancy
created by the increase, to serve until the 2012 Annual Meeting of Stockholders.
Mr. Besier has served as the chief
executive officer of various software and information technology companies. He
served as President and CEO of SAP America, Inc. from 1991 to 1996 and of
Firepond Inc., which went public in 2000, from 1997 to 2003. From 2006 to 2007,
Mr. Besier also held the position of President and CEO of Neoware, Inc.,
which was acquired by HP in 2007 with a total transaction value of more than
$300 million. From 2008 to 2010, Mr. Besier served as CEO of Pramata,
Inc. He has served as the CEO of RES Software since 2010 and has also served as
a member of the Board of Directors of ICG Commerce since 2009.
In connection with his election, the
Board, upon the recommendation of its Compensation Committee (the
“Committee”), granted Mr. Besier 5,337 shares of restricted
stock and options to purchase 11,130 shares of our common stock, in each case
pursuant to our Amended and Restated 2003 Equity Incentive Plan, as amended
(the “Plan”). The restricted stock will remain subject to
forfeiture until December 8, 2011. The options have a ten-year term and
were fully exercisable upon grant. The exercise price is $6.09 per share, the
closing price of our common stock on the Nasdaq Global Select Market on the
grant date.
Executive Compensation
At its meeting held on December 7,
2010, our Board, at the recommendation of the Committee, also ratified the
following actions taken by the Committee earlier that same day with respect to
the 2011 compensation for our named executive officers:
2
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Stock
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Restricted
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2011 Bonus
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2011 Car
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Option
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Stock
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Executive Officer
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2011 Salary
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Opportunity
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Allowance
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Value
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Value
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Michael J. McKelvey, Ph.D.
President and Chief Executive Officer
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$
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515,000
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$
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386,250
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$
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12,000
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$
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$
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Joel Morganroth, M.D.
Chairman and Chief Scientific Officer
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$
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495,000
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$
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371,250
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$
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12,000
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$
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247,500
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$
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247,500
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Keith D. Schneck
Executive Vice President and Chief Financial Officer
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$
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320,000
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$
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160,000
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$
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9,240
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$
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120,000
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$
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120,000
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Jeffrey Litwin, M.D.
Executive Vice President and Chief Medical Officer
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$
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365,000
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$
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182,500
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$
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9,240
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$
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109,500
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$
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109,500
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Amy Furlong
Executive Vice President, Chief Operations Officer
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$
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340,000
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$
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170,000
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$
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9,240
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$
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102,000
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$
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102,000
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The Board approved dollar values for
awards of stock options and restricted stock that will be granted on the first
business day following the release of our results of operations for the year
ending December 31, 2010 (the “Grant Date”). Both the stock
options and the shares of restricted stock will be awarded pursuant to the
Plan. The options will be issued with an exercise price equal to the closing
price of our common stock on the Grant Date and will be incentive options to
the maximum extent permitted. The options will vest and the restrictions on the
restricted stock will lapse in four equal consecutive annual installments
commencing one year from the Grant Date. The number of shares of restricted
stock and the number of stock options granted to each executive officer will be
determined based on the respective dollar value approved by the Board for each
executive officer as set forth in the table above, divided by the closing price
of our common stock on the Grant Date for restricted stock and the fair value
of options on the Grant Date using the Black-Scholes option-pricing model for
stock options.
2011 Bonus Plan
At its meeting, the Board, at the
recommendation of the Committee, also ratified the 2011 Bonus Plan (the
“2011 Plan”) that was approved earlier that day by the Committee.
The 2011 Plan will be effective beginning on January 1, 2011 and will
remain effective for fiscal year 2011. The purpose of the 2011 Plan is to
promote the interests of the Company and its stockholders by providing
employees with financial rewards upon achievement of specified business
objectives, as well as help us attract and retain employees by providing
attractive compensation opportunities linked to performance results. All of our
employees are eligible to participate in the 2011 Plan, subject in some cases
to certain waiting periods and with the exception that certain sales personnel
participate in a separate commission incentive plan instead of the 2011 Plan.
Bonuses payable under the 2011 Plan are
recommended by the Committee and presented to the Board. Bonuses payable to
eligible participants are based on a variety of factors, including both
objective and subjective criteria. The objective criteria consist of targets
for revenue, net income and the revenue projected to be generated by new
contracts into which we enter regardless of when we actually recognize the
revenue (the “Contract Revenues”).
3
For Drs. McKelvey and Morganroth,
Mr. Schneck and Ms. Furlong, 15% of the bonus will be based on the
extent to which we achieve specified revenue targets, 55% will be based on the
extent to which we achieve specified net income targets and the remaining 30%
will be based on individual performance objectives. For Dr. Litwin, 15% of
the bonus will be based on the extent to which we achieve specified revenue
targets, 40% will be based on the extent to which we achieve specified net
income targets, 20% will be based on the extent to which we achieve specified
Contract Revenues targets and the remaining 25% will be based on individual
performance objectives.
The revenue and net income targets at
which bonus plan participants would earn 100% of the bonus opportunity
attributable to those targets is subject to completion and approval by the
Board of the Company’s 2011 financial business plan which is expected to
occur in the next several weeks.
Individual goals for the named
executive officers are subject to completion and approval by the Committee in
the next several weeks. The individual goals will center on each
executive’s area of responsibilities to improve productivity and
financial performance, continue with integration of the Company’s recent
acquisition, continue with technological advances, enhance the effectiveness
and efficiency of operations and sales and executing key initiatives supporting
our 2011 business plan.
Our named executive officers will be
eligible to receive 50% to 150% of the 2011 bonus opportunity noted in the
table above that is allocable to each objective target category, based on the
extent to which we achieve the various specified targets. Amounts payable based
on achievement of individual performance objectives can range from 0-100% of
the applicable bonus opportunity.
Bonuses are payable based on the extent
to which annual targets have been achieved, with the bonuses (if any) normally
being paid within ninety (90) days after the end of the calendar year in
which the bonuses were earned. Bonuses normally will be paid in cash in a
single lump sum, subject to payroll taxes and tax withholdings, as applicable.
Notwithstanding the foregoing, the
Committee retains the discretion under the 2011 Plan to adjust the amount of
any bonus to be paid, regardless of whether or the extent to which any of the
objective criteria, including revenue, net income and Contract Revenues
targets, are achieved.
4
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
eResearchTechnology, Inc.
(Registrant)
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Date: December 10, 2011
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By:
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/s/ Keith D. Schneck
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Keith D. Schneck,
Executive Vice President, Chief Financial Officer and Secretary
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