SVNT » Topics » DIRECTOR COMPENSATION

This excerpt taken from the SVNT DEF 14A filed Mar 30, 2009.

DIRECTOR COMPENSATION

We refer to our directors who are neither executive officers nor employees of Savient or our subsidiaries as our outside directors. Only outside directors receive remuneration for their service on the Board of Directors or any committee.

The Compensation and Human Resources Committee periodically reviews director compensation and targets such compensation at between the median and 75th percentile of compensation received by directors of companies in our Peer Group. Moreover, we base compensation for our outside directors upon the recommendations of our external compensation consultants, which the Compensation Committee engaged to assist in reviewing, evaluating, updating and refining compensation for our senior management and our outside directors. This review was performed by Frederic W. Cook & Co., or Cook, the Compensation Committee’s former compensation consultants, and comprised an analysis of two main variables: director compensation at companies in our Peer Group and the methods practiced in delivering such compensation to directors. On the recommendation of Cook, we determined that, while the total compensation provided to our outside directors did not require adjustment as it met the intended target and remained competitive, the manner in which we provide equity compensation to our outside directors was not consistent with the practices used by companies in our Peer Group. As a result, in December 2006 the Compensation and Human Resources Committee recommended, and the Board of Directors approved, revisions to the method of providing equity compensation to our outside directors, and established a new director compensation program, which we refer to as the Director Compensation Program, as described below, which went into effect as of the date of our 2008 Annual Meeting of Stockholders.

Equity-Based Compensation

Each of our outside directors, with the exception of our Chairman, is granted annually on the day of our annual meeting of stockholders the number of shares of restricted stock or restricted stock units, at the director’s election, having an aggregate fair market value of $40,000 based on the closing price of our common stock as quoted by The Nasdaq Global Market on the date of grant. The restricted stock grants vest quarterly on each of the three-month anniversaries of the annual meeting, with the final portion vesting on the earlier of the end of the final three-month period or the date of that year’s annual meeting. Restricted stock units vest one year from the date of grant and are deferred at the director’s election. Additionally, each outside director is granted annually on the day of our annual meeting of stockholders the number of options to purchase shares of our common stock having an aggregate fair market value of $40,000 based on the closing price as quoted by The Nasdaq Global Market on the date of grant. The options vest quarterly on each of the three-month anniversaries of the annual meeting, with the final portion vesting on the earlier of the end of the final three-month period or the date of that year’s annual meeting. Directors may exercise vested options during the six-month period following termination of Board service, except following death, in which case the exercise period is one year.

Cash Compensation

Each of our outside directors, with the exception of our Chairman, receives $20,000 annually in cash, and a fee of $1,500 for each Board meeting attended in person and $1,000 for each meeting attended by telephone. Members of our Compensation and Human Resources Committee and our Nominating and Corporate Governance Committee, other than the chairpersons, are paid $5,000 annually, and each chairperson of these committees is paid $10,000 annually. Members of the Audit and Finance Committee, other than the chairperson, are paid $7,500 annually, and the chairperson is paid $15,000 annually. Each committee member and committee chairperson receives a fee of $1,500 for each committee meeting attended in person and $1,000 for telephonic attendance, even if held on the same day as a meeting of the Board of Directors. Each member of the BLA Oversight Committee, other than the chairperson, is paid $15,000 annually, and the chairperson is paid $30,000 annually. The committee member and the committee chairperson each receive a fee of $3,000 for each committee meeting attended whether in person or telephonic, even if held on the same day as

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a meeting of the Board of Directors. The committee member, the committee chairperson and the Chairman of the Board each receive a fee $3,000 for any day spent in furtherance of service on the BLA Oversight Committee. All annual cash compensation amounts paid to outside directors are paid in quarterly installments, and all directors are reimbursed for their expenses in connection with attendance at Board and committee meetings.

Additionally, we have committed to pay Dr. Simon a total of $500,000 during 2009 in connection with his retention as a consultant to more closely supervise the KRYSTEXXA biologic license application process and the preparation for the FDA Arthritis Advisory Committee panel. Dr. Simon remains the chairperson of the BLA Oversight Committee but is no longer eligible for the committee’s annual retainer, meeting or service fees.

Chairman Compensation

Our Chairman is granted annually on the day of our annual meeting of stockholders the number of shares of restricted stock or restricted stock units having an aggregate fair market value of $80,000 based on the closing price of our restricted stock as quoted by The Nasdaq Global Market on the date of grant. The restricted stock award vests quarterly on each of the three-month anniversaries of the annual meeting, with the final portion vesting on the earlier of the end of the final three-month period or the date of that year’s annual meeting. Restricted stock units vest one year from the date of grant and are deferred at the director’s election. Additionally, our Chairman is granted annually on the day of our annual meeting of stockholders the number of options to purchase shares of our common stock having an aggregate fair market value of $80,000 based on the closing price as quoted by The Nasdaq Global Market on the date of grant. The options vest quarterly on each of the three-month anniversaries of the annual meeting, with the final portion vesting on the earlier of the end of the final three-month period or the date of that year’s annual meeting. Our Chairman also receives $43,000 annually in cash, paid quarterly in arrears, and a fee of $2,000 for each Board of Directors meeting attended in person and $1,500 for telephonic attendance. Our Chairman is also a member of the Audit and Finance Committee and the chairperson of the Compensation and Human Resources Committee, and is an ex-officio member of the Nominating and Corporate Governance Committee and the BLA Oversight Committee. He is entitled to compensation for his attendance at committee meetings on which he serves, but not for his attendance at any other committee meetings. He also receives $3,000 for any day spent in support of the BLA Oversight Committee.

The table below summarizes the compensation paid by us to directors for the fiscal year ended December 31, 2008, and includes payments made under the prior director compensation program from January 1, 2008 to May 15, 2008, and the current director compensation program from May 15, 2008 through December 31, 2008.

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