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
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to ss.240.14a-12
PHARMION CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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The following was sent to all United States employees of Pharmion Corporation on
January 4, 2008 in connection with the proposed acquisition of Pharmion
Corporation by Celgene Corporation.
CELGENE/PHARMION PROPOSED MERGER
U.S. PHARMION/CELGENE RETENTION
PLAN AND SEVERANCE PROGRAM
SUMMARIES
January 2008
PRIOR TO CONSUMMATION OF THE MERGER (THE "CLOSING")
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I. THE RETENTION PLAN
The following is a summary of certain benefits to be provided to eligible
Pharmion employees under the Retention Plan (the "Plan") adopted by Pharmion
Corporation ("Pharmion") with the consent of Celgene Corporation ("Celgene") in
connection with the proposed acquisition of Pharmion by Celgene (the acquisition
is referred to as the "Merger"). This summary is provided for your convenience
only and is qualified by the exact language in the Plan, a copy of which can be
accessed on the Stock & Equity C&C, or by contacting Pam Herriott or Pat Pheffer
in Pharmion's Human Resources Department.
U.S. INCENTIVE BONUS PROGRAM FOR 2007 PERFORMANCE
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(Applies to all eligible employees who have a start date on or before December
31, 2007)
Subject to the approval of Pharmion's Board of Directors, Pharmion will
award annual bonuses in respect of 2007 achievements toward 2007 individual and
corporate goals to all Pharmion employees currently eligible for incentive
bonuses under Pharmion's incentive bonus compensation program. The 2007
individual goals were established by each employee's manager and the 2007
corporate goals were established with and approved by Pharmion's Board of
Directors. The incentive bonuses may be paid in amounts up to 200% of each
individual's annual bonus target (a set percentage of the employee's base salary
at December 31st of the prior year, determined by position level, under the
incentive bonus compensation program), with the actual amounts to be determined
by Pharmion's Board of Directors. In the case of employees who began employment
in 2007, incentive bonuses will be pro-rated for the partial year of employment.
Each eligible employee's incentive bonus is determined based on an evaluation of
both individual performance and corporate performance in proportions previously
established for each employee. An employee must be employed with Pharmion at the
time the bonus is paid in order to be eligible to receive a 2007 incentive
bonus. The 2007 incentive bonuses will be paid in March 2008.
ADDITIONAL SALES INCENTIVE PROGRAM - FIRST AND SECOND QUARTERS 2008
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Subject to the achievement of applicable Pharmion quarterly sales targets,
U.S. field-based sales employees will be paid their quarterly bonuses as
outlined in the Pharmion Sales Incentive Compensation Plan. An additional
Challenge Bonus for each of the 1st and 2nd quarters of 2008, predicated upon
specific target goal achievement, as previously communicated by Pharmion's Sales
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leadership, may be paid to U.S. field-based sales employees, subject to
continued employment with Pharmion (or its successor) through the end of the
calendar quarter to which such bonus corresponds.
RETENTION "STAY" BONUS
----------------------
All eligible Pharmion employees (those full and part-time employees who
were employed by or who accepted an offer of employment on or before the
announcement of the Merger, November 18, 2007) who remain employed by Pharmion
through the Closing will be entitled to receive a retention bonus payable as
soon as practicable, but not later than thirty (30) days, following the Closing
in an amount determined in accordance with the table below. In the event an
otherwise eligible employee resigns or is terminated by Pharmion for any reason
prior to the Closing, such employee will forfeit the right to receive any
retention bonus.
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Applicable Measurement Date Amount of Retention Bonus
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If the Closing occurs on or before 25% of the eligible employee's annual base salary
as of 12/01/07
June 1, 2008
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If the Closing occurs after June 1, 2008 50% of the eligible employee's annual base salary
as of 12/01/07
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RESTRICTED STOCK UNIT VESTING
Subject to your continued service with Pharmion through the Closing,
immediately prior to the Closing, any unvested restricted stock unit awards
(RSUs) will become fully vested, and if applicable, settle, in net shares
subject to all applicable income and employment tax withholding. For a more
detailed explanation of the treatment of outstanding RSUs, please refer to the
document entitled "To Holders of Options to Purchase Shares of Common Stock and
Restricted Stock Unit Awards under the Pharmion Corporation 2000 Stock Incentive
Plan" sent to such Holders on January 4, 2008 via email from Steve Dupont,
Pharmion's General Counsel.
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FOLLOWING THE CLOSING
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II. THE CELGENE/PHARMION EMPLOYEE SEVERANCE PROGRAM
Celgene has agreed to provide severance benefits under a severance program
for Pharmion employees who will not continue to be employed by Celgene or one of
its subsidiaries, or whose employment with Celgene may be terminated, following
the Closing, subject to the terms and conditions stated herein. Pharmion
executive officers with an employment agreement with Pharmion are not eligible
for payments or benefits under the Celgene severance program.
In general, under the terms of the severance program, in the event of a
termination of a former Pharmion employee's service by Celgene without "Cause"
or by such employee as a result of Celgene's failure to provide such employee
with "Comparable Employment" during the period commencing on the Closing and
ending on the 12-month anniversary thereof, such employee will be entitled to
the payments and benefits described in Items 1 through 4 below.
For purposes of the severance program, the term "Cause" is defined in the
Pharmion 2000 Stock Incentive Plan [located on the Pharmion Stock & Equity C&C,
2(d)].
For purposes of the severance plan, the term "Comparable Employment" is
defined as a former Pharmion employee's position, or an offer of a position,
with Celgene (or its successor) or its subsidiaries on and following the Closing
(i) which does not result in a material reduction in scope, or material change
in content, of such employee's duties and responsibilities with Pharmion, (ii)
which provides such employee with compensation and employee benefits (other than
equity compensation) that are comparable in the aggregate to the greater of
those provided by Celgene to similarly situated employees of Celgene and those
provided by Pharmion to such employee immediately prior to the Closing, and
(iii) which does not require such employee to relocate such employee's principal
business location beyond 50 miles from such employee's principal business
location immediately prior to the Closing. The right to receive payments and
benefits under the severance plan will be conditioned on the terminated employee
executing a general release of claims in favor of Celgene and its affiliates.
1. Cash Payment of a Severance Award.
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Employee's Position Title with Pharmion Amount of Severance Award
(subject to all applicable income and employment
withholding taxes)
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o Six months of base salary.
o Two weeks of base salary for each completed year
Director Level of service.*
o For employees eligible under Pharmion's employee
incentive bonus program, a pro-rated incentive
bonus for the year of termination. The amount of
such incentive bonus will be pro-rated for the
portion of the year that has elapsed prior to the
date of termination and will be contingent upon
substantial achievement of performance goals up
to the date of
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termination.
o Should achievement of applicable Pharmion/Celgene
sales targets warrant a quarterly bonus outlined
in the Pharmion Sales Incentive Compensation Plan
or the quarterly bonus for an established
Challenge Bonus, eligible field-based sales
employees will be eligible for the full quarterly
sales-based bonuses paid through the end of the
quarter of termination.
o Payment of vacation that has accrued but not been
used through the date of termination.
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o Three months of base salary.
o Two weeks of base salary for each completed year
Below Director Level of service.*
o For employees eligible under Pharmion's employee
incentive bonus program, a pro-rated incentive
bonus for the year of termination. The amount of
such incentive bonus will be pro-rated for the
portion of the year that has elapsed prior to the
date of termination and will be contingent upon
substantial achievement of performance goals up
to the date of termination.
o Should achievement of applicable Pharmion/Celgene
sales targets warrant a quarterly bonus outlined
in the Pharmion Sales Incentive Compensation Plan
or the quarterly bonus for an established
Challenge Bonus, eligible field-based sales
employees will be eligible for the full quarterly
sales-based bonuses paid through the end of the
quarter of termination
o Payment of vacation that has accrued but not been
used through the date of termination.
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* "Completed years of service" will be determined by counting the number of service anniversaries achieved
since the employee's original date of hire with Pharmion and including the anniversary which would have been
achieved in the calendar year of termination if employment had continued.
2. Health Plan Coverage
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In addition, employees eligible for a severance award as described in Item
1 above will be eligible for continued health plan coverage through COBRA for
themselves and their qualified beneficiaries at "active employee rates" for the
period utilized to calculate the base salary severance award and based on the
health plan coverage applicable to such employee and their qualified
beneficiaries immediately prior to termination. "Active employee rates" means
the same rates charged to active employees.
At the end of the period utilized to calculate the base salary severance
award, each former employee will be eligible to continue COBRA health plan
coverage, at the former employee's election and upon such former employee's
payment of the full premium under COBRA.
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3. Employee Stock Options
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Employees whose employment with Pharmion is terminated following the Merger
as described above may be entitled to full vesting of such employee's unvested
Pharmion stock options (as converted at Closing to Celgene stock options) and
such employees will have the period of time to exercise such options to purchase
Celgene common stock as stated in their original stock option agreements. Please
refer to the document entitled "To Holders of Options to Purchase Shares of
Common Stock and Restricted Stock Unit Awards under the Pharmion Corporation
2000 Stock Incentive Plan" sent to such Holders on January 4, 2008 via email
from Steve Dupont, Pharmion's General Counsel.
4. Outplacement
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Employees eligible for a severance award as described under Item 1 above
will be eligible to participate in an employment outplacement program. The
details of the program are being defined and will be presented to employees at
the time of termination of employment under the severance program.
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III. EMPLOYEES WHO RECEIVE AND ACCEPT OFFERS TO JOIN CELGENE
NEW-HIRE STOCK OPTION GRANT
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All former Pharmion employees who are offered/and accept U.S. positions of
employment with Celgene will receive a new-hire stock option grant commensurate
with their position in the U.S.
QUARTERLY STOCK OPTION GRANT
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All former Pharmion employees who commence employment with Celgene after
the Closing will be eligible for quarterly stock option grants in July and
October 2008.
CURRENT PHARMION OPTIONS
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All Pharmion options will continue on the same vesting schedule but will be
converted with an agreed-upon ratio to Celgene stock options. Please refer to
the document entitled "To Holders of Options to Purchase Shares of Common Stock
and Restricted Stock Unit Awards under the Pharmion Corporation 2000 Stock
Incentive Plan" sent to you on January 4, 2008 via email from Steve Dupont,
Pharmion's General Counsel.
COMPENSATION
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All former Pharmion employees who are offered and accept positions with
Celgene will remain at their level of base compensation on the date just prior
to the Closing or higher as we align employees within the Celgene compensation
structure.
BONUS LEVELS
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All former Pharmion employees are eligible for Celgene's bonus plans,
commensurate with your position within the Celgene salary structure and on the
applicable provisions of the bonus plan.
Additional Information about the Transaction and Where to Find It
These summaries shall not constitute an offer of any securities for sale. The
Merger will be submitted to Pharmion's stockholders for their consideration. In
connection with the Merger, Celgene and Pharmion intend to file relevant
materials with the SEC, including the registration statement, the proxy
statement/prospectus and other relevant documents concerning the merger.
Investors and stockholders of Celgene and Pharmion are urged to read the
registration statement, proxy statement/prospectus and other relevant documents
filed with the SEC when they become available, as well as any amendments or
supplements to the documents because they will contain important information
about Celgene, Pharmion and the Merger. Stockholders of Celgene and Pharmion can
obtain more information about the proposed transaction by
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reviewing the Form 8-K to be filed by Celgene and Pharmion in connection with
the announcement of the entry into the merger agreement, and any other relevant
documents filed with the SEC when they become available. The proxy
statement/prospectus, the registration statement and any other relevant
materials (when they become available), and any other documents filed by Celgene
and Pharmion with the SEC, may be obtained free of charge at the SEC's web site
at www.sec.gov. In addition, investors and stockholders may obtain free copies
of the documents filed with the SEC by directing a written request to: Celgene
Corporation, 86 Morris Ave., Summit, New Jersey 07901, Attention: Investor
Relations, or Pharmion Corporation, 2525 28th Street, Suite 200, Boulder,
Colorado 80301, Attention: Investor Relations. Investors and stockholders are
urged to read the proxy statement/prospectus, the registration statement and the
other relevant materials when they become available before making any voting or
investment decision with respect to the Merger.
Participants in Solicitations
Pharmion and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation of
proxies from stockholders of Pharmion in connection with the Merger. Information
regarding Pharmion's directors and executive officers is available in Pharmion's
proxy statement on Schedule 14 A for its 2007 annual meeting of stockholders,
which was filed with the SEC on April 30, 2007. Additional information regarding
the interests of such potential participants will be included in the proxy
statement and the other relevant documents filed with the SEC when they become
available.
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