Momenta Pharmaceuticals, Inc.
MOMENTA PHARMACEUTICALS INC (Form: DEF 14A, Received: 04/23/2012 14:02:14)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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MOMENTA PHARMACEUTICALS, INC.
675 West Kendall Street
Cambridge, Massachusetts 02142

To Our Stockholders:

        You are cordially invited to attend the 2012 Annual Meeting of Stockholders of Momenta Pharmaceuticals, Inc. to be held at 10:30 a.m., local time, on Wednesday, June 13, 2012, at the Cambridge Marriott, 50 Broadway, Cambridge, Massachusetts 02142.

        The Notice of Meeting and Proxy Statement on the following pages describe the matters to be presented at the meeting.

        It is important that your shares be represented at this meeting to assure the presence of a quorum. Whether or not you plan to attend the meeting, we hope that you will have your stock represented by voting your shares over the Internet or by telephone as provided in the instructions set forth on the enclosed proxy card, or by completing, signing, dating and returning your proxy in the enclosed envelope, as soon as possible . Your stock will be voted in accordance with the instructions you have given in your proxy.

        Thank you for your continued support.

    Sincerely,

 

 


SIGNATURE
    Craig A. Wheeler
President and Chief Executive Officer

MOMENTA PHARMACEUTICALS, INC.
675 West Kendall Street
Cambridge, Massachusetts 02142



NOTICE OF 2012 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on June 13, 2012



To Our Stockholders:

        NOTICE IS HEREBY GIVEN that the 2012 Annual Meeting of Stockholders of Momenta Pharmaceuticals, Inc., or the Annual Meeting, will be held on Wednesday, June 13, 2012 at 10:30 a.m., local time, at the Cambridge Marriott, 50 Broadway, Cambridge, Massachusetts 02142. At the Annual Meeting, stockholders will consider and vote on the following matters:

        The stockholders will also act on any other business that may properly come before the Annual Meeting or any adjournment thereof.

        Stockholders of record at the close of business on Monday, April 16, 2012 are entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof. Your vote is important regardless of the number of shares you own. A complete list of such stockholders will be open to the examination of any stockholder at our principal executive offices at 675 West Kendall Street, Cambridge, Massachusetts 02142, during ordinary business hours, for a period of ten days prior to the Annual Meeting as well as on the day of the Annual Meeting. The Annual Meeting may be adjourned from time to time without notice other than by announcement at the Annual Meeting.

        We hope that all stockholders will be able to attend the Annual Meeting in person. However, to ensure that a quorum is present at the Annual Meeting, please vote your shares over the Internet or by telephone as provided in the instructions set forth on the enclosed proxy card, or complete, date, sign and promptly return the enclosed proxy card whether or not you expect to attend the Annual Meeting. A postage-prepaid envelope, addressed to Broadridge Financial Solutions, which is serving as proxy tabulator, has been enclosed for your convenience. If you attend the Annual Meeting in person, your proxy will, upon your written request, be returned to you and you may vote your shares in person.

        All stockholders are cordially invited to attend the Annual Meeting.

    By Order of the Board of Directors,

 

 


SIGNATURE

 

 

Bruce A. Leicher
Secretary

Cambridge, Massachusetts
May 1, 2012

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE VOTE YOUR SHARES OVER THE INTERNET OR BY TELEPHONE AS PROVIDED IN THE INSTRUCTIONS SET FORTH ON THE ENCLOSED PROXY CARD, OR COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY MAIL IT IN THE ENCLOSED ENVELOPE TO ASSURE REPRESENTATION OF YOUR SHARES AT THE ANNUAL MEETING. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED WITHIN THE UNITED STATES.


MOMENTA PHARMACEUTICALS, INC.
675 WEST KENDALL STREET
CAMBRIDGE, MASSACHUSETTS 02142



PROXY STATEMENT



For the 2012 Annual Meeting of Stockholders
to be held on Wednesday, June 13, 2012

        This proxy statement and the enclosed proxy card are being furnished in connection with the solicitation of proxies by the board of directors of Momenta Pharmaceuticals, Inc., also referred to in this proxy statement as the "Company", "Momenta", "we" or "us", for use at the 2012 Annual Meeting of Stockholders, or the Annual Meeting, to be held on Wednesday, June 13, 2012 at 10:30 a.m., local time, at the Cambridge Marriott, 50 Broadway, Cambridge, Massachusetts 02142, and at any adjournment thereof. You may obtain directions to the location of the Annual Meeting by contacting Bruce A. Leicher, Secretary, Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, Massachusetts 02142, telephone: (617) 491-9700.

        All proxies will be voted in accordance with the instructions contained in those proxies. If no choice is specified, the proxies will be voted in accordance with the board of directors' recommendations. This means that the proxies will be voted in favor of Proposals 1, 2 and 3 as set forth in the accompanying Notice of Meeting. Any proxy may be revoked by a stockholder at any time before it is exercised by delivery of written revocation to our Secretary, by executing and delivering a later-dated proxy or by appearing at the Annual Meeting and voting in person.

        Our 2011 Annual Report to Stockholders for the fiscal year ended December 31, 2011 is being mailed to stockholders with the mailing of these proxy materials on or about May 1, 2012.

Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to be Held on June 13, 2012:

         This proxy statement and the 2011 Annual Report to Stockholders are available for viewing, printing and downloading at http://ir.momentapharma.com/annuals.cfm.

         A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 as filed with the Securities and Exchange Commission, except for exhibits, will be furnished without charge to any stockholder upon request to Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, Massachusetts 02142, Attention: Bruce A. Leicher, facsimile: (617) 621-0431, by calling (617) 491-9700 or on the web at http://ir.momentapharma.com/annuals.cfm.

Voting Securities and Votes Required

        Stockholders of record at the close of business on Monday, April 16, 2012 will be entitled to notice of, and to vote at, the Annual Meeting. On that date, 51,502,404 shares of our common stock were issued and outstanding. Each share of common stock entitles the holder thereof to one vote with respect to all matters submitted to stockholders at the Annual Meeting. We have no other securities entitled to vote at the Annual Meeting.

        The presence in person or representation by proxy of the holders of a majority of the shares of common stock issued and outstanding and entitled to vote at the Annual Meeting is necessary to establish a quorum for the transaction of business. If a quorum is not present, the Annual Meeting will be adjourned until a quorum is obtained.

        Directors are elected by a plurality of the votes cast by the stockholders (Proposal 1). The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting


firm (Proposal 2) and the approval of the non-binding "say on pay" advisory vote on executive compensation (Proposal 3) require a majority of the votes cast by holders of stock present or represented and voting on such matter. The votes will be counted, tabulated and certified by a representative of Broadridge Financial Solutions, which will serve as the inspector of elections at the Annual Meeting.

        Abstentions and broker non-votes (when shares are represented at the Annual Meeting by a proxy specifically conferring only limited authority to vote on certain matters and no authority to vote on other matters) are included in the shares present or represented at the Annual Meeting for purposes of determining whether a quorum is present. Abstentions and broker non-votes will not be considered votes properly cast at the Annual Meeting. Because the approval of each proposal is based on the votes properly cast at the Annual Meeting, abstentions and broker non-votes will not be included in the calculation of the stockholder vote on proposals.

Voting Your Shares

        If you are the record holder of your shares, you may vote in one of four ways. You may vote by submitting your proxy over the Internet, by telephone, or by mail or you may vote in person at the Annual Meeting.

        You may vote over the Internet.     If you have Internet access, you may vote your shares from any location in the world by following the "Vote by Internet" instructions set forth on the enclosed proxy card.

        You may vote by telephone.     You may vote your shares by following the "Vote by Phone" instructions set forth on the enclosed proxy card.

        You may vote by mail.     You may vote by completing, dating and signing the proxy card that accompanies this proxy statement and promptly mailing it in the enclosed postage-prepaid envelope. You do not need to put a stamp on the enclosed envelope if you mail it in the United States. The shares you own will be voted according to the instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter described in this proxy statement, the shares you own will be voted in accordance with the recommendations of our board of directors. Our board of directors recommends that you vote FOR each nominee for director, FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm and FOR the approval of executive compensation.

        You may vote in person.     If you attend the Annual Meeting, you may vote by delivering your completed proxy card in person or you may vote by completing a ballot. Ballots will be available at the meeting.

Changing Your Vote; Revocation of Proxy; Broker Non-Votes

        Voting over the Internet or by telephone or execution of a proxy will not in any way affect a stockholder's right to attend the Annual Meeting and vote in person. A proxy may be revoked before it is used to cast a vote. To revoke a proxy, a stockholder must:

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        Any written notice of revocation or subsequent proxy should be sent to us at the following address: Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, MA 02142, Attention: Bruce A. Leicher, Secretary. The shares represented by all properly executed proxies received in time for the Annual Meeting will be voted as specified in those proxies. If the shares you own are held in your name and you do not specify in the proxy card how your shares are to be voted, they will be voted in favor of the election of the directors named in this proxy statement, in favor of the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm, in favor of the approval of our executive compensation and, in the discretion of the persons appointed as proxies, on any other items that may properly come before the Annual Meeting. If the shares you own are held in "street name," the bank or brokerage firm, as the record holder of your shares, is required to vote your shares in accordance with your instructions. To vote your shares held in "street name," you will need to follow the directions provided to you by your bank or brokerage firm.

        Under applicable stock exchange rules, if you do not give instruction to your bank, broker or other nominee, the nominee will still be able to vote your shares with respect to certain "discretionary" items, but will not be allowed to vote your shares with respect to certain "non-discretionary" items. In the case of non-discretionary items, the shares that do not receive voting instructions will be treated as broker non-votes. The election of directors and the approval of a non-binding advisory vote on executive compensation are non-discretionary items and the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm is a discretionary item.

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PROPOSAL ONE

ELECTION OF DIRECTORS

Board Recommendation

         The board of directors recommends a vote "FOR" the election of each of Mr. John K. Clarke, Mr. James R. Sulat and Mr. Craig A. Wheeler as Class II directors.

        We have three classes of directors, currently consisting of three Class I directors, three Class II directors and three Class III directors. At each annual meeting, directors are elected for a full term of three years to succeed those whose terms are expiring. The terms of the three classes are staggered in a manner so that only one class is elected by stockholders annually. Mr. John K. Clarke, Mr. James R. Sulat and Mr. Craig A. Wheeler are currently serving as Class II directors. The Class II directors elected this year will serve as members of our board of directors until the 2015 annual meeting of stockholders, or until their respective successors are elected and qualified.

        The persons named in the enclosed proxy card will vote to elect Messrs. Clarke, Sulat and Wheeler as Class II directors unless you withhold authority to vote for the election of any or all nominees by marking the proxy card (whether executed by you or through the Internet or telephonic voting). Stockholders may vote by proxy to elect no more than three persons to our board of directors at the Annual Meeting. Messrs. Clarke, Sulat and Wheeler currently serve on our board of directors. The nominees have indicated their willingness to continue to serve if elected. However, if any director nominee should be unable to serve, the shares of common stock represented by proxies may be voted for a substitute nominee designated by our board of directors. Our board of directors has no reason to believe that the nominees will be unable to serve if elected.

        No director or executive officer is related by blood, marriage or adoption to any other director or executive officer. No arrangements or understandings exist between any director or person nominated for election as a director and any other person pursuant to whom such person is to be selected as a director or nominee for election as a director.

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Our Board of Directors

        Set forth below for each of our directors, including the Class II director nominees, is information as of April 15, 2012 with respect to each director's (a) name and age, (b) positions and offices with us, (c) principal occupation and business experience during at least the past five years, (d) directorships, if any, of other publicly-held companies during the past five years, (e) the year such person became a member of our board of directors, and (f) specific experience, qualifications, attributes and skills that led our board to the conclusion that such person should serve as a director. In addition to the information presented below regarding each nominee's specific experience, qualifications, attributes and skills that led our board of directors to the conclusion that he should serve as a director, we also believe that all of our director nominees have a reputation for integrity, honesty and adherence to high ethical standards and have each demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our company and our board.

Name
  Age   Director
Since
  Principal Occupation, Other Business Experience
During the Past Five Years and Other Directorships

Class II directors, nominees to be elected at the 2012 Annual Meeting (if elected, terms to expire in 2015)

John K. Clarke(1)(2)

   
58
   
2002
 

John K. Clarke has been a director since April 2002. Mr. Clarke founded Cardinal Partners, a venture capital firm, in 1997, and has served as its Managing General Partner since its founding. He has founded and served as interim Chief Executive Officer of a number of portfolio companies, including Alkermes, Inc., Arris Pharmaceuticals, Inc., Cubist Pharmaceuticals, Inc. and the DNX Corporation. Mr. Clarke is chairman of the board of directors of Alnylam Pharmaceuticals, Inc. and serves as a member of the board of directors of Verastem, Inc. as well as a number of privately-held healthcare companies. During the last five years, Mr. Clarke also served as a member of the board of directors of Cubist Pharmaceuticals, Inc., Sirtris Pharmaceuticals and Visicu, Inc. He received his B.A. in Biology and Economics from Harvard College and his M.B.A. from the Wharton School of the University of Pennsylvania. Mr. Clarke's qualifications to sit on the board include his financial expertise, his years of experience providing advisory services to organizations in the biotechnology industry and his experience serving on other boards of directors in the biopharmaceutical industry.

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Name
  Age   Director
Since
  Principal Occupation, Other Business Experience
During the Past Five Years and Other Directorships

James R. Sulat(1)(3)

    61     2008  

James R. Sulat has been a director since June 2008 and has served as chairman of the board since December 2008. Since September 2009, Mr. Sulat has served as the Chief Executive Officer and Chief Financial Officer of Maxygen, Inc., a biopharmaceutical company. Prior to that, he served as the Chief Financial Officer of Memory Pharmaceuticals Corp., a biopharmaceutical company, from February 2008 through September 2008, and previously served as Memory Pharmaceuticals' President and Chief Executive Officer from May 2005 through February 2008 and as a member of the board of directors of Memory Pharmaceuticals from May 2005 through January 2009. Mr. Sulat serves as a director of Maxygen, Inc. and Intercell AG. Mr. Sulat received a B.S. in Administrative Sciences from Yale University, and an M.B.A. and an M.S. in Health Services Administration from Stanford University. Mr. Sulat's qualifications to sit on the board include his experience with public and financial accounting matters, his experience as chief executive officer and chief financial officer at companies within the biopharmaceutical industry and his experience serving on other boards of directors in the biopharmaceutical industry.

Craig A. Wheeler

   
51
   
2006
 

Craig A. Wheeler has served as our President and a director since August 2006 and was appointed our Chief Executive Officer effective September 2006. Prior to joining Momenta, Mr. Wheeler served as President of Chiron Biopharmaceuticals, a division of Chiron Corporation, a biotechnology company, from August 2001 until June 2006. Mr. Wheeler has been a member of the board of directors of Avanir Pharmaceuticals, Inc. since September 2005 and has served as chairman of the board since May 2007. Mr. Wheeler received B.S. and M.S. degrees in chemical engineering from Cornell University and an M.B.A. degree from the Wharton School of the University of Pennsylvania. Mr. Wheeler's qualifications to sit on the board include his years of senior management experience in the biotechnology industry, including over five years as our President and Chief Executive Officer, and his experience as a principal in a major management consulting firm with a focus on healthcare.

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Name
  Age   Director
Since
  Principal Occupation, Other Business Experience
During the Past Five Years and Other Directorships

Class I directors (terms to expire in 2014)

Bruce L. Downey(1)(2)

   
64
   
2009
 

Bruce Downey has been a director since June 2009. Mr. Downey has served as a Partner at NewSpring Capital, a venture capital firm, since April 2009. Previously, Mr. Downey was Chairman and Chief Executive Officer of Barr Pharmaceuticals, Inc., a global specialty pharmaceutical company that operated in more than 30 countries worldwide and was acquired by Teva Pharmaceuticals in 2008. Mr. Downey joined Barr Pharmaceuticals, Inc. in 1993 and was appointed Chairman of the Board and Chief Executive Officer in 1994. Mr. Downey is a member of the board of directors of Cardinal Health, Inc. as well as privately held companies. Mr. Downey graduated with honors from Miami University in 1969 and received his law degree cum laude from Ohio State. Mr. Downey's qualifications to sit on the board include his significant experience serving as a chief executive officer of a global generic pharmaceutical company that also had a substantial brand business and an active biologics research and development program, his years serving as a lawyer in private practice and his experience serving on other boards of directors in the biopharmaceutical industry.

Marsha H. Fanucci(1)(3)

   
59
   
2005
 

Marsha H. Fanucci has been a director since March 2005. Ms. Fanucci served as Senior Vice President and Chief Financial Officer of Millennium Pharmaceuticals, Inc., a biopharmaceutical company, from July 2004 through January 2009, where she was responsible for corporate strategy, treasury, financial planning and reporting and operations. While at Millennium since 2000, she also served as Vice President, Finance and Corporate Strategy and Vice President, Corporate Development. (Millennium was acquired by Takeda Pharmaceutical Company Limited in May 2008 and is now Millennium: The Takeda Oncology Company). Ms. Fanucci is a member of the board of directors of Alnylam Pharmaceuticals, Inc. and Ironwood Pharmaceuticals, Inc. She received her B.S. in Pharmacy from West Virginia University and her M.B.A. from Northeastern University. Ms. Fanucci's qualifications to sit on the board include her expertise with public and financial accounting matters, including her experience leading financial organizations in biotechnology companies.

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Name
  Age   Director
Since
  Principal Occupation, Other Business Experience
During the Past Five Years and Other Directorships

Peter Barton Hutt(3)

    77     2001  

Peter Barton Hutt, LL.B., L.L.M., has been a director since June 2001. Mr. Hutt is a senior counsel at the law firm of Covington & Burling LLP and has been an attorney with that firm beginning in 1960. He served as Chief Counsel for the Food and Drug Administration from 1971 through 1975. Mr. Hutt is a member of the Institute of Medicine of the National Academy of Sciences and teaches a course on Food and Drug Law each Winter Term at Harvard Law School. He co-authored the casebook used to teach Food and Drug Law and has published numerous papers on the subject. Mr. Hutt is a member of the board of directors of Ista Pharmaceuticals, Inc., Xoma Ltd., and several privately-held life sciences companies. During the last five years, Mr. Hutt also served as a member of the board of directors of Celera Genomics, CV Therapeutics,  Inc., Favrille, Inc. and Introgen Therapeutics, Inc. Mr. Hutt received his B.A., magna cum laude, from Yale University, his L.L.B. from Harvard University and his L.L.M. from New York University. Mr. Hutt's qualifications to sit on the board include his 50 years of experience and expertise in food and drug regulation, including his service at the U.S. Food and Drug Administration and at Covington & Burling, and his experience serving on other boards of directors in the biopharmaceutical industry.

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Name
  Age   Director
Since
  Principal Occupation, Other Business Experience
During the Past Five Years and Other Directorships

Class III directors (terms to expire in 2013)

Thomas P. Koestler(2)(4)

   
60
   
2011
 

Thomas P. Koestler has been a director since January 2011. Since February 2010, Dr. Koestler has served as Executive Director-Healthcare at Vatera Healthcare Partners, a venture capital company. Prior to joining Vatera Healthcare Partners, Dr. Koestler was Executive Vice President of Schering-Plough Corporation, a pharmaceutical company, and President of Schering-Plough Research Institute, the pharmaceutical research and development arm of Schering-Plough Corporation, which he joined in 2003. Dr. Koestler has also held senior positions at Pharmacia Corporation, Novartis AG, Ortho-McNeil and Bristol-Myers Squibb. Dr. Koestler is also a member of the board of directors of Novo Nordisk A/S and a number of privately-held companies. Dr. Koestler holds a BS degree in biology and genetics from Daemen College and a Ph.D. from the State University of New York, where he studied medicine and pathology. Dr. Koestler's qualifications to sit on the board include his years of senior executive experience in the pharmaceutical industry, including his involvement with over 80 product approvals during his career, including 30 related to new molecular entities.

Bennett M. Shapiro(2)(4)

   
72
   
2003
 

Bennett M. Shapiro, M.D., has been a director since May 2003. Since June 2006, he has served as a Senior Partner at PureTech Ventures, a venture capital firm, and since August 2003 he has served as a private consultant providing advice to executives. From September 1990 to July 2003, Dr. Shapiro served as an Executive Vice President of Merck & Co.,  Inc., a research-based pharmaceutical company. Dr. Shapiro is the former head of Worldwide Licensing and External Research at Merck; prior to that he served as the head of Basic and Preclinical Research at Merck and as Chairman of the Biochemistry department at the University of Washington. Dr. Shapiro serves on the board of a number of privately-held biopharmaceutical companies. During the last five years, Dr. Shapiro also served as a member of the board of directors of Celera Genomics. Dr. Shapiro received his B.S. in Chemistry from Dickinson College and his M.D. from Jefferson Medical College. Dr. Shapiro's qualifications to sit on the board include his years of senior executive experience in the pharmaceutical industry, including his expertise in leading research-based organizations, and his experience serving on other boards of directors in the biopharmaceutical industry.

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Name
  Age   Director
Since
  Principal Occupation, Other Business Experience
During the Past Five Years and Other Directorships

Elizabeth Stoner(3)(4)

    61     2007  

Elizabeth Stoner, M.D., has been a director since October 2007. Since March 2010, Dr. Stoner has been the Chief Development Officer at Rhythm Pharmaceuticals, a biotechnology company. Since October 2007, Dr. Stoner has served as a Managing Director at MPM Capital, a healthcare venture capital firm. Prior to joining MPM Capital, Dr. Stoner had a 22-year career at Merck Research Laboratories. At the time of her retirement from Merck, Dr. Stoner was Senior Vice President of Global Clinical Development Operations with responsibility for the company's clinical development activities in more than 40 countries. Prior to her position at Merck, she was an Assistant Professor of Pediatrics at Cornell University Medical College. Dr. Stoner serves on the board of a privately-held biopharmaceutical company. During the last five years, Dr. Stoner served on the board of Metabasis Therapeutics, Inc., a biopharmaceutical company. Dr. Stoner received her B.S. in Chemistry from Ottawa University, KS, her M.S. in Chemistry from the State University of New York at Stony Brook, and her M.D. from Albert Einstein College of Medicine. Dr. Stoner's qualifications to sit on the board include her more than 20 years of senior executive experience in the pharmaceutical industry, including her expertise in leading clinical development organizations.


(1)
Member of audit committee.

(2)
Member of compensation committee.

(3)
Member of nominating and corporate governance committee.

(4)
Member of science committee.

        For information relating to compensation of our directors, including shares of our common stock owned by and options granted to each of our directors, see the disclosure set forth under the headings "Executive Compensation—Compensation of Directors" and "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."

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CORPORATE GOVERNANCE

General

        We believe that good corporate governance is important to ensure that Momenta is managed for the long-term benefit of our stockholders. We continuously review our corporate governance policies and practices and to compare them to those suggested by various authorities in corporate governance and the practices of other public companies.

        This section describes key corporate governance practices that we have adopted. Complete copies of our corporate governance guidelines, committee charters and code of conduct described below are available on the "Investors—Corporate Governance" section of our website at www.momentapharma.com . Alternatively, you may request a copy of any of these documents by writing to Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, Massachusetts 02142, attention: Bruce A. Leicher, Secretary, fax: (617) 621-0431.

Corporate Governance Guidelines

        Our board of directors has adopted corporate governance guidelines to assist our board of directors in the exercise of its duties and responsibilities and to serve the best interests of Momenta and its stockholders. These guidelines, which provide a framework for the conduct of the board of directors' business, provide that:

Board Determination of Independence

        Under applicable NASDAQ rules, a director will only qualify as an "independent director" if, in the opinion of our board of directors, that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that none of John K. Clarke, Bruce L. Downey, Marsha H. Fanucci, Peter Barton Hutt, Thomas P. Koestler, Bennett M. Shapiro, Elizabeth Stoner and James R. Sulat, from which group directors are currently selected to comprise our audit, compensation and nominating and corporate governance committees, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is an "independent" director as that term is defined under applicable NASDAQ rules.

Board Leadership Structure

        Our board separated the positions of chairman of the board and chief executive officer in 2005. Separating these positions allows our chief executive officer to focus on our day-to-day business, while allowing the chairman of the board to lead the board in its fundamental role of providing advice to and independent oversight of management. The board recognizes the time, effort, and energy that the chief executive officer is required to devote to his position, and further recognizes the commitment required

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to serve as chairman of the board, particularly as the board's oversight responsibilities continue to grow. While our bylaws and corporate governance guidelines do not require that our chairman and chief executive officer positions be separate, the board believes that our practice of having separate positions and having an independent outside director serve as chairman is the appropriate leadership structure for the company at this time. However, in the event that in the future the chairman of the board is not an independent director, our corporate governance guidelines provide that the nominating and corporate governance committee will nominate an independent director to serve as "Lead Director" who will be approved by a majority of the independent directors.

Board Meetings and Attendance

        Our board of directors met five times during the fiscal year ended December 31, 2011, either in person or by teleconference. During 2011, each director attended at least 75% of the aggregate of the total number of board meetings and committee meetings on which she or he then served, with the exception of Peter Barton Hutt, who attended 73% of such meetings. Mr. Hutt attended all regularly scheduled board and committee meetings during 2011. Quarterly board meetings are scheduled over a year in advance of the meeting, while special meetings of the board are scheduled for unanticipated matters close to the time of the meeting, often at a time when not every director can be available.

Director Attendance at Annual Meetings of Stockholders

        Our corporate governance guidelines provide that directors are expected to attend the annual meeting of stockholders. All of our then-current directors attended the 2011 annual meeting of stockholders.

Board Committees

        Our board of directors has established four standing committees—audit, compensation, nominating and corporate governance and science—each of which operates under a charter that has been approved by our board of directors. Current copies of the audit, compensation, nominating and corporate governance and science committee charters are posted on the "Investors—Corporate Governance" section of our website located at www.momentapharma.com .

        Our board of directors has determined that all of the members of each of the audit, compensation and nominating and corporate governance committees are independent as defined under applicable NASDAQ rules, including, in the case of all members of the audit committee, the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

        The audit committee currently consists of Marsha H. Fanucci, John K. Clarke, Bruce L. Downey and James R. Sulat. Ms. Fanucci chairs the audit committee. The audit committee held nine meetings in 2011. Our audit committee's responsibilities include:

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        Our board of directors has determined that each of Marsha H. Fanucci, Bruce L. Downey, John K. Clarke and James R. Sulat is an "audit committee financial expert" as defined by applicable Securities and Exchange Commission rules.

        The compensation committee currently consists of John K. Clarke, Bruce L. Downey, Thomas P. Koestler and Bennett M. Shapiro. Mr. Clarke chairs the compensation committee. The compensation committee held ten meetings in 2011. Our compensation committee's responsibilities include:

        The processes and procedures followed by our compensation committee in considering and determining executive compensation are described below under the heading "Executive Compensation Processes."

        Our nominating and corporate governance committee currently consists of Peter Barton Hutt, Marsha H. Fanucci, Elizabeth Stoner and James R. Sulat. Mr. Hutt chairs the nominating and corporate governance committee. The nominating and corporate governance committee held four meetings in 2011. Our nominating and corporate governance committee's responsibilities include:

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        The processes and procedures followed by our nominating and corporate governance committee in identifying and evaluating director candidates are described below under the heading "Director Nomination Process."

        Our science committee currently consists of Thomas P. Koestler, Bennett M. Shapiro and Elizabeth Stoner. Dr. Shapiro chairs the science committee. The science committee held four meetings in 2011. Our science committee's responsibilities include:

The Board's Role in Risk Oversight

        Our board of directors administers its risk oversight function directly and through our board committees. The audit committee's role in the risk oversight process includes receiving regular reports from our compliance officer, who oversees our compliance program, members of senior management on our compliance committee who have functional compliance responsibility, and other members of senior management on areas of material risk to us, including operational, financial, legal, regulatory, strategic and reputational risks. The audit committee receives these reports from the appropriate "risk owner" within the company to enable the audit committee to understand our risk identification, risk management and risk mitigation strategies. The chairwoman of the audit committee reports on these discussions to the full board during each regularly-scheduled board meeting. The compensation committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The nominating and governance committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance, and by reviewing the code of business conduct and ethics which creates a foundation for our compliance program.

Executive Compensation Processes

        We have implemented an annual performance review program for our employees, including our executives, with annual corporate goals that are proposed by management, reviewed by the compensation committee and approved by the board of directors. These corporate goals target the

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achievement of specified operational and financial goals; specific research, clinical, regulatory, commercial and/or compliance milestones; and business development and financing initiatives. Individual performance is evaluated in part by reviewing the extent to which an employee's performance facilitates the achievement of our annual corporate and business goals. Annual salary changes, individual components of annual incentive cash bonus awards and equity awards for each of our Chief Executive Officer, Chief Financial Officer, and each of our three other most highly compensated executive officers are tied to a combination of achievement of corporate goals and individual performance.

        The compensation committee has the authority to retain compensation consultants and other outside advisors to assist in the evaluation of executive officer compensation. To assist the compensation committee in discharging its responsibilities, since mid- 2010, the compensation committee retained Radford Survey and Consulting, a business unit of AON, an independent compensation consultant that we refer to as Radford, to evaluate certain aspects of our compensation practices and assist the compensation committee with setting executive compensation.

        For further information about our executive compensation, please see the "Executive Compensation—Compensation Discussion and Analysis" section below.

Director Nomination Process

        The process followed by our nominating and corporate governance committee to identify and evaluate director candidates includes requests to board members for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the nominating and corporate governance committee and other members of the board of directors.

        In considering whether to recommend any particular candidate for inclusion in the board's slate of director nominees, the nominating and corporate governance committee applies the criteria attached to its charter. These criteria include the candidate's integrity, business acumen, knowledge of our business and industry, experience, diligence, conflicts of interest and the ability to act in the interests of all stockholders. The criteria further specify that the value of diversity on the board should be considered by the nominating and corporate governance committee in the director identification and nomination process. While we do not have a formal policy on diversity, the nominating and corporate governance committee seeks nominees with a broad diversity of experience, professions, skills, gender, race, national origin and backgrounds and considers such factors in evaluating prospective nominees. The nominating and corporate governance committee does not assign specific weights to particular criteria and no particular trait is a prerequisite for each prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the board of directors to fulfill its responsibilities. Nominees are not discriminated against on the basis of race, religion, national origin, gender, sexual orientation, disability or any other basis proscribed by law.

        Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least a year as of the date such recommendation is made, to the nominating and corporate governance committee, c/o Bruce A. Leicher, Secretary, Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, Massachusetts 02142. Assuming that appropriate biographical and background material has been provided on a timely basis, the nominating and corporate governance committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.

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        Stockholders also have the right under our bylaws to directly nominate director candidates, without any action or recommendation on the part of the nominating and corporate governance committee or the board of directors, by following the procedures set forth in our amended and restated bylaws that are described below under the heading "Stockholder Proposals."

Communicating with the Independent Directors

        Our board of directors will give appropriate attention to written communications that are submitted by stockholders and will respond if and as appropriate. The chairman of the board of directors (if an independent director) or the lead director (if one is appointed), or otherwise the chairperson of the nominating and corporate governance committee, subject to advice and assistance from the general counsel and, if requested, outside legal counsel, is primarily responsible for monitoring communications from stockholders and for providing copies of summaries of such communications to the other directors as he or she considers appropriate.

        Under procedures approved by a majority of the independent directors, communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the chairman of the board considers to be important for the directors to know. In general, communications relating to corporate governance and corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications.

        Stockholders who wish to send communications on any topic to the board of directors should address such communications to board of directors c/o Bruce A. Leicher, Secretary, Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, Massachusetts 02142, fax: (617) 621-0431.

Code of Business Conduct and Ethics

        We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the code on our website, which is located at www.momentapharma.com under the Corporate Governance tab in the Investors section of our website. In addition, we intend to post on our website all disclosures that are required by law or NASDAQ Global Market listing standards concerning any amendments to, or waivers from, any provision of the code.

Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Exchange Act requires our directors, executive officers and the holders of more than 10% of our common stock to file with the Securities and Exchange Commission initial reports of ownership of our common stock and other equity securities on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5. Officers, directors and 10% stockholders are required by Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of copies of Section 16(a) reports furnished to us and representations made to us, we believe that during 2011 our officers, directors and holders of more than 10% of our common stock complied with all Section 16(a) filing requirements, except that Mr. Clarke did not file a Form 5 relating to gifts of 8,000 shares.

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Our Executive Officers

        The following table sets forth the names, ages and positions of our current executive officers as of April 16, 2012:

Name
  Age   Position

Craig A. Wheeler*

    51   President and Chief Executive Officer

Richard P. Shea

    60   Senior Vice President and Chief Financial Officer

Ganesh Venkataraman Kaundinya, Ph.D. 

    45   Chief Scientific Officer and Senior Vice President, Research

John E. Bishop, Ph.D. 

    50   Senior Vice President, Pharmaceutical Sciences

Bruce A. Leicher

    56   Senior Vice President, General Counsel and Secretary

James M. Roach, M.D. 

    52   Chief Medical Officer and Senior Vice President, Development

*
Mr. Wheeler is a member of our board of directors. See Proposal One—Election of Directors for more information about Mr. Wheeler.

         Richard P. Shea has been our Senior Vice President and Chief Financial Officer since July 2007. From October 2003 through July 2007, he served as our Vice President and Chief Financial Officer. From April 2002 to April 2003, Mr. Shea served as Chief Operating Officer for Variagenics, Inc., a pharmacogenomics company. From March 2000 to April 2002, Mr. Shea served as Variagenics, Inc.'s Chief Financial Officer and from February 1999 to March 2000, he served as its Vice President, Finance and Administration. Mr. Shea is a CPA and received his A.B. from Princeton University and his M.B.A. from Boston University.

         Ganesh Venkataraman Kaundinya, Ph.D. , is a co-founder of our company and has been our Chief Scientific Officer since September 2007 and our Senior Vice President, Research since April 2005. From January 2002 through April 2005, he served as our Vice President, Technology. Dr. Kaundinya received his M.S. and Ph.D. in Chemical Engineering from the Massachusetts Institute of Technology.

         John E. Bishop, Ph.D. , has been our Senior Vice President, Pharmaceutical Sciences since December 2006. He served as our Vice President, Pharmaceutical Sciences and Manufacturing from November 2004 to December 2006. From August 2000 to October 2004, Dr. Bishop served as Director and Head of Process Development (Chemical and Biologics) at Millennium Pharmaceuticals, Inc. During that period, he also led the Chemistry, Manufacturing and Controls (CMC) team for Velcade®, a type of cancer medicine. Dr. Bishop received his B.S. magna cum laude in Chemistry and German from Tufts University, his Ph.D. in Organic Chemistry from UC Berkeley and his M.B.A. from Northeastern University.

         Bruce A. Leicher has been our Senior Vice President and General Counsel since July 2008 and Secretary since September 2008. From December 2006 to July 2008, Mr. Leicher served as Senior Vice President, General Counsel and Secretary at Altus Pharmaceuticals Inc., a biopharmaceutical company. From December 2005 to December 2006, he served as Vice President, General Counsel and Secretary at Antigenics Inc., a biotechnology company. Mr. Leicher received his B.A. from the University of Rochester and his J.D. from Georgetown University Law Center. After earning his law degree, Mr. Leicher served as a law clerk to the Honorable Thomas F. Hogan, U.S. District Court Judge for the District of Columbia.

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         James M. Roach, M.D. , has been our Chief Medical Officer and Senior Vice President, Development since February 2008. From January 2006 to February 2008, Dr. Roach served as Senior Vice President, Medical Affairs at Sepracor Inc., a pharmaceutical company, where he also served as Vice President, Medical Affairs from July 2002 to December 2005 and as Executive Medical Director, Medical Affairs from January 2002 to June 2002. Dr. Roach is board certified in Internal Medicine, Pulmonary Disease, and Critical Care Medicine and is an Assistant Clinical Professor of Medicine at Harvard Medical School and an Associate Physician at Brigham and Women's Hospital. Dr. Roach received his B.A. in biology and philosophy from the College of the Holy Cross and his M.D. from Georgetown University School of Medicine. He completed his residency in Internal Medicine and fellowship in Pulmonary and Critical Care Medicine at the Walter Reed Army Medical Center in Washington, D.C.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

        The following discussion provides information regarding compensation earned by our Chief Executive Officer, our Chief Financial Officer and each of our three other most highly compensated executive officers. We refer to these executive officers as our "Named Executives."

Executive Summary

        The objective of our executive compensation program is to align the interests of management with the interests of stockholders through a system that correlates compensation to company-wide objectives and, to a lesser extent, individual performance. Our program is geared for short- and long-term performance, with the goal of increasing stockholder value over the long term. We also emphasize employee retention in our program. We also considered the results of the most recent advisory, non-binding vote of stockholders on the compensation of the Named Executives, which was approved by more than 98% of the votes cast at the 2011 annual meeting of stockholders. Upon review, we determined it was not necessary to make any changes to our program or philosophy. Our stockholders also overwhelmingly indicated their preference for an annual say-on-pay vote. Immediately following last year's annual meeting, the board determined that future say-on-pay votes would be held every year until the next vote on the frequency of such advisory votes.

        Our "pay-for-performance" philosophy forms the foundation for the compensation committee's decisions regarding executive compensation. Like most companies, we use a combination of fixed and variable compensation programs to reward and incentivize strong performance, and to align the interests of our executives with our stockholders. This compensation philosophy, and the program structure approved by the compensation committee, is central to our ability to attract, retain and motivate individuals who can achieve the results that our stockholders expect.

        Our compensation committee has determined that our compensation program should be designed to:

        Our executive compensation philosophy is based on the following principles:

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        Compensation and benefits for employees at all levels, including for our Named Executives includes base salary, annual incentive cash bonuses, annual equity awards and other benefits. Compensation for our Named Executives also includes severance and change-of-control payments. Other aspects of our compensation program are intended to further align the interest of our executives with our stockholders, including stock ownership guidelines that more closely align executives' interests with those of stockholders.

        The following pages of this Compensation Discussion and Analysis include the following:

        The compensation tables appear immediately following this Compensation Discussion and Analysis.

Background for 2011 Compensation

        In the fall of 2010, in light of the approval by the U.S. Food and Drug Administration of enoxaparin sodium injection, our first commercial product, Radford examined our historical peer group companies and determine the appropriateness of retaining those companies as our peer group and/or identifying other suitable companies to be included in the peer group. Radford focused on creating a peer group that represented companies within our industry and captured companies at a similar stage of development with a similar financial profile as us.

        In reviewing and selecting potential peer group companies, Radford first identified all publicly traded, U.S.-headquartered companies in the biotechnology/pharmaceutical industry at or near the commercial stage. Radford next refined the pool to reflect companies with 50 to 600 employees, annual revenue between $30 million and $300 million and a market capitalization between $250 million to $2.5 billion. Radford next qualitatively evaluated and refined the pool to identify each company's business focus and corporate strategy, where publicly disclosed. Radford then selected companies that were similar to us, taking into consideration the financial profile and product stage of development for each company.

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        In October 2010, the compensation committee reviewed and approved the peer group companies presented by Radford based on the above methodology and analysis, which were:

Acorda Therapeutics, Inc.   InterMune, Inc.
Alkermes, Inc.   Isis Pharmaceuticals, Inc.
Auxilium Pharmaceuticals, Inc.   Jazz Pharmaceuticals, Inc.
Dyax Corp.   Onyx Pharmaceuticals, Inc.
Enzon Pharmaceuticals, Inc.   Salix Pharmaceuticals, Inc.
Idenix Pharmaceuticals, Inc.   Seattle Genetics, Inc.
Impax Laboratories, Inc.   Spectrum Pharmaceuticals, Inc.
Incyte Corporation   Theravance, Inc.
Inspire Pharmaceuticals, Inc.   ViroPharma Incorporated

        In the fall of 2010, Radford provided analysis of and advice on our executive compensation program, including base salaries, short-term incentives and long-term incentives, as compared to the new peer group companies. In conducting its review, Radford considered the company's ability to continue to recruit, retain and motivate the executive team.

        In addition, in order to determine the appropriate target level for company-wide salary increases for 2011, in the fall of 2010 we obtained survey data from the following survey sources: WorldatWork; Mercer; Hay Group; The Society for Human Resources Management; Conference Board and Radford. These surveys were utilized to assure that our proposed merit salary increases were competitive in the market. The projected merit salary increases for 2011 contained in the surveys were between 2.9% and 3.4% of current base salaries, with the Radford survey, an industry-specific survey, projecting a 3.4% increase. Using these data, we set a target level of merit salary increase for 2011 at 3.5%, with the goals of retaining a competitive compensation package and aligning internal compensation with external candidates coming into the company.

Background for 2012 Compensation

        In September 2011, in light of the changes in our revenue and number of employees, among other factors, Radford examined our historical peer group companies and determine the appropriateness of retaining those companies as our peer group and/or identifying other suitable companies to be included in the peer group. Radford focused on creating a peer group that represented companies within our industry and captured companies at a similar stage of development with a similar financial profile as us.

        In reviewing and selecting potential peer group companies, Radford first identified all publicly traded, U.S.-headquartered companies in the biotechnology/pharmaceutical industry at the commercial stage. Radford next refined the pool to reflect companies with 75 to 750 employees, annual revenue between $20 million and $175 million and a market capitalization between $275 million to $2.5 billion. Radford next qualitatively evaluated and refined the pool to identify each company's business focus and corporate strategy, where publicly disclosed. Radford then selected companies that were similar to us, taking into consideration the business focus, financial profile and stage of development for each company. As a result, Akorn, Incorporated, Halozyme Therapeutics, Inc., Nektar Therapeutics and Questor Pharmaceuticals were added to the peer group list and Dyax Corp., Enzon Pharmaceuticals, Inc. and Inspire Pharmaceuticals, Inc. were removed from the peer group list.

        In the fall of 2011, Radford provided analysis and advice of our executive compensation program, including base salaries, short-term incentives and long-term incentives, as compared with the new peer group companies. In conducting its review, Radford considered the company's ability to continue to recruit, retain and motivate the executive team.

        In addition, in order to determine the appropriate target level for company-wide salary increases for 2012, in the fall of 2011 we obtained survey data from the following survey sources: Culpepper,

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Mercer and Radford. These surveys were utilized to assure that our proposed merit salary increases were competitive in the market. The projected merit salary increases for 2012 contained in the surveys were between 3.0% and 3.5% of current base salaries. Using these data, we set a target level of merit salary increase for 2012 at 3.5%, with the goals of retaining a competitive compensation package and aligning internal compensation with external candidates coming into the company.

Stock Ownership Guidelines

        In September 2007, our board of directors, upon recommendation of the compensation committee, approved a stock ownership and retention program for our executive officers and directors. The purpose of the program is to ensure that each of our executive officers and directors has a long-term equity stake in Momenta, to more closely align the interests of the executive officers and directors with those of our stockholders and to further promote our commitment to sound corporate governance.

        Under the program's guidelines:

        Our executive officers and directors are expected to comply with these guidelines by the later of March 31, 2013 and the fifth anniversary that each such person becomes subject to the guidelines. Until the applicable minimum share requirement is achieved, each executive officer and director is required to retain all shares of restricted stock upon the lapse of vesting restrictions, net of shares surrendered or sold to pay applicable withholding taxes. Once an executive officer or director has met these guidelines, he or she must continue to satisfy the guidelines so long as he or she remains subject to the guidelines. Each executive officer and director's satisfaction of the minimum share requirement will be measured on an annual basis. Shares that count toward satisfaction of the guidelines include:

        The minimum share requirement may be waived, at the discretion of the compensation committee, if compliance would create severe hardship, would prevent an executive officer or director from complying with a court order, as in the case of a divorce settlement, or when he or she attains the age of 62.

Determining Executive Compensation—Roles and Process

        Utilizing the philosophy and background outlined above, our compensation committee determines the parameters of the executive compensation program, including appropriate target levels and performance measures, and administers our executive compensation program. This section discusses in greater detail the roles and process underlying the application of our executive compensation philosophy.

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        The CEO's role in the compensation process begins with the establishment of our corporate and business performance objectives against which the payment of annual incentive bonus awards will be measured. Our CEO, together with our executive team, discusses and formulates annual corporate and business goals. These goals are presented to our compensation committee, which reviews and finalizes the goals and recommends them for approval by our board of directors. The CEO's role in the compensation process continues with his review of our Named Executives. Our CEO elicits 360-performance reviews with respect to each of our Named Executives. These 360-performance reviews are evaluations of each Named Executive that are submitted to our CEO by our employees who interact with these Named Executives. Each executive also completes a written self-assessment which is submitted to the CEO. The CEO then assimilates the feedback from the 360-performance reviews and the self-assessment into formal written evaluations of each Named Executive, including the CEO's own evaluation of the Named Executive. The CEO's evaluation also includes documenting each Named Executive's performance during the year, detailing accomplishments, areas of strength and areas for development. The CEO bases this evaluation on his knowledge of each Named Executive's performance and feedback provided by the 360-performance reviews. Each Named Executive is then rated based on his or her performance during the year. The CEO then works directly with our Senior Vice President, Human Resources to provide comprehensive recommendations for salary changes, individual components of annual incentive cash bonus awards and equity awards for each of our Named Executives. These recommendations are presented to, reviewed by, modified or accepted, and approved by our compensation committee. The CEO then meets with each Named Executive and reviews his or her respective performance evaluation and compensation changes, if any.

        At the request of the compensation committee, our CEO attends all or portions of periodic meetings of the compensation committee, but does not attend portions of any meeting in which the compensation committee discusses his compensation or performance. In addition, our compensation committee reviews the information with respect to executive compensation trends among our peer-group companies, including the overall blend of salary, bonus and equity compensation within such group, presented by our Senior Vice President, Human Resources and her recommendations pertaining to our executive compensation program. As discussed below, the compensation committee also reviews data and recommendations from compensation consultants.

        The compensation committee has delegated to our CEO the authority to make stock option grants under our 2004 Stock Incentive Plan, as amended, to newly-hired employees below the senior director level based on a number of options within a range as set forth in a matrix previously approved by the board of directors.

        Our compensation committee recognizes the importance of maintaining sound principles for the development and administration of our compensation program, which is intended to strengthen the link between executive pay and performance. The compensation committee, in accordance with its written charter, oversees all aspects of our director, officer and other executive compensation policies. Based on the process described under the caption " Role of CEO in Compensation Decisions," above, the CEO, together with our Senior Vice President, Human Resources, makes a recommendation to the compensation committee on each Named Executive's compensation, except his own. Named Executives do not propose or seek approval for their own compensation. The compensation committee then determines the compensation of each of these Named Executives. The chairman of the board and the chairman of the compensation committee evaluate the CEO's performance, utilizing input from the board of directors and from selected executive officers in connection with an annual 360-performance review, and make recommendations to the compensation committee, which then determines the CEO's compensation.

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        To assist it in discharging its responsibilities, our compensation committee utilized one independent compensation consultant, Radford, to evaluate certain aspects of our compensation practices and to assist in making recommendations for our board of directors and executive compensation programs. As part of this process, members of the compensation committee reviewed materials provided by our compensation consultants, and had the opportunity to meet independently with Radford periodically throughout the year to discuss our executive and director compensation and to receive input and advice. The compensation committee has access to all written reports and studies provided by Radford to management. Radford did not provide any other services to us other than those described in this Executive Compensation section.

        We do not use "internal pay equity" as a constraint on compensation paid to our CEO or other Named Executives. Such systems typically put a ceiling on part or all of an executive's compensation based on a specified multiple of compensation awarded to another executive or a class of employees of the company. Our management and our compensation committee do not believe that such arbitrary limitations are an appropriate way to make compensation decisions for our executives. Instead, we rely on the judgment of the compensation committee, after considering recommendations from management and external advisors, available market data and evaluations of executive performance, in the context of a program that is weighted heavily in favor of performance-based compensation for our Named Executives.

Elements of Compensation

        Our compensation program is designed to reward each Named Executive based upon a combination of corporate and individual performance. Corporate performance is evaluated by reviewing the extent to which pre-set goals are met, which generally include the achievement of specified operational and financial goals; specific research, clinical, regulatory, commercial or compliance milestones; and business development and financing initiatives. We evaluate individual performance in part by reviewing the extent to which individual performance facilitated the achievement of the corporate and business goals discussed above.

        The compensation package offered to each Named Executive is comprised of a combination of:

        We maintain broad-based benefits that are provided to eligible employees, including health, dental, life and disability insurance and a 401(k) plan. Our Named Executives are eligible to participate in all of our employee benefit plans, in each case on the same basis as other employees.

        Base Salary.     Base salaries are established for our Named Executives at levels that are intended to reflect the scope of each Named Executive's industry experience, knowledge and qualifications, salary levels in effect for comparable positions within our peer group companies and internal comparability considerations. We believe that base salaries are a fundamental element of our executive compensation program. Base salaries are reviewed at least annually by our compensation committee and are adjusted from time to time to ensure that our executive compensation structure remains aligned with our compensation objectives and are based upon various subjective criteria and the compensation paid by peer group companies. Subjective performance criteria include an executive's ability to lead through

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motivating and inspiring others, demonstrate the skills necessary to perform effectively in his or her area of responsibility, recognize and pursue new business opportunities and initiate programs that enhance our growth and success.

        The compensation committee reviewed the salaries of the Named Executives at its January 2011 meeting. The compensation committee had previously approved a 3.5% merit increase for all employees in connection with its review of survey data of industry trends. The compensation committee used that target as well as performance review input for each of the Named Executives to approve salary increases to be effective as of January 1, 2011. In addition, the compensation committee noted that peer group data showed that the salary for Mr. Shea was below the 25 th  percentile of others in his role within our peer group and that Mr. Wheeler's cash compensation was below the 50 th  percentile of others in his role within our peer group. The committee agreed to move both executives' salary closer to the 50 th  percentile of our peer group. Based on the foregoing information, the compensation committee approved a salary increase for the Named Executives to be effective as of January 1, 2011 as set forth below:

Name
  2010
Base Salary
  2011
Base Salary
  Increase  

Craig A. Wheeler

  $ 549,016   $ 576,467     5.0 %

Richard P. Shea

  $ 302,253   $ 340,035     12.5 %

James M. Roach

  $ 355,212   $ 367,644     3.5 %

Ganesh Venkataraman Kaundinya

  $ 346,135   $ 359,980     4.0 %

Bruce A. Leicher

  $ 336,996   $ 348,791     3.5 %

        The compensation committee reviewed the salaries of the Named Executives at its January 2012 meeting. The compensation committee had previously approved a 3.5% merit increase for all employees in connection with its review of survey data of industry trends. The compensation committee used that target as well as performance review input for each of the Named Executives to approve salary increases to be effective as of January 1, 2012. Based on the foregoing information, the compensation committee approved salary increases for the Named Executives to be effective as of January 1, 2012 as set forth below:

Name
  2011
Base Salary
  2012
Base Salary
  Increase  

Craig A. Wheeler

  $ 576,467   $ 600,000     4.1 %

Richard P. Shea

  $ 340,035   $ 350,236     3.0 %

James M. Roach

  $ 367,644   $ 380,511     3.5 %

Ganesh Venkataraman Kaundinya

  $ 359,980   $ 374,379     4.0 %

Bruce A. Leicher

  $ 348,791   $ 360,999     3.5 %

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        Annual Incentive Cash Bonus.     We use annual incentive cash bonuses to motivate our Named Executives to achieve and exceed specified goals in a time frame that is one year in duration. Annual incentive cash bonuses are determined on the basis of our achievement of corporate performance targets and individual contribution toward those corporate goals. Our corporate goals are typically focused upon the achievement of specific research, clinical, regulatory, commercial, financial, compliance or operational milestones. These goals are also considered to be conducive to the creation of stockholder value and designed to contribute to our current and future financial success.

        Under our annual incentive cash bonus program, corporate goals are proposed by management and approved by the compensation committee and the board of directors. Each corporate goal is assigned a percentage value (e.g., 10%, 15%, 20%, etc.) and within each corporate goal there are achievement milestones that are expressed in the following target percentages: 70%, 100% and 130%. If a corporate goal does not meet at least the 70% target percentage, no achievement percentage is assigned. If, for example, we were to achieve 100% of our corporate goals, but only to the extent of the 70% target percentage within each goal, the annual bonus pool for that year would be 70% of the aggregate bonus potential for all participants. In addition, our compensation committee has the discretion to take into consideration mitigating and/or extraordinary circumstances when determining the level of achievement of goals and related milestones. The CEO's annual incentive bonus award is completely dependent upon the achievement of corporate goals, and senior vice presidents' and vice presidents' target bonuses are 75% dependent upon the achievement of corporate goals and 25% dependent upon the subjective analysis of their individual performance in relation to the corporate goals.

        The target bonus potential for the CEO is 60% of base salary, with a maximum bonus opportunity equal to 150% of his base salary. The target bonus potential for the other Named Executives is 35% of base salary. Bonuses, if any, are determined and paid on an annual basis after completion of the fiscal year in which bonuses are earned.

        The corporate goals for 2011 were:

        In assessing the achievement of these goals, the compensation committee considered the recommendations of our CEO, who, with input from the other executive officers, assessed our performance against corporate goals for 2011 and made recommendations to the board of directors and the compensation committee. The compensation committee then reviewed and discussed these recommendations, taking into account mitigating and/or extraordinary circumstances. In January 2012, the compensation committee made a determination of the achievement of the corporate goals at 101.5% and, in its discretion, awarded an additional 8.5% to the achievement level of corporate goals related to significant achievements during the year, including maintaining sole generic status for enoxaparin sodium injection for three fiscal quarters in 2011, success in litigation matters, and successful completion of business development transactions. As a result, the compensation committee

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concluded that, including the additional achievements, our total achievement level of the 2011 corporate goals was 110%, as follows:

Corporate Goal
  Percentage
Value (%)
  Actual Level of
Achievement (%)
 

Enabling manufacture of Enoxaparin Sodium Injection

    15     130  

Advancement of our M356 Program—Regulatory

    10     70  

Advancement of our M356 Program—Development

    10     70  

Advancement of our M356 Program—Litigation

    5     100  

Advancement of our M402 Program

    10     70  

Advancement of our Research Program

    10     100  

Advancement of our Biologics Program

    5     70  

Achievement of Business Development Goals

    15     130  

Advancement of Corporate Strategy Plan

    10     130  

Financial Discipline Goals

    10     100  

Additional Achievements

    8.5     100  

        In January 2012, the compensation committee reviewed each Named Executive's performance recommendation as submitted by the CEO and our Senior Vice President, Human Resources. The individual objectives for our Named Executives included meeting specified targets in the following areas: successfully managing the business to the budget; business development achievements; pipeline development; and strategic planning. Based on the 110% corporate goal achievements (weighted 100% for Mr. Wheeler and 75% for all other Named Executives), and subjective analysis of their individual performance in relation to the corporate goals (weighted 25% for all Named Executives except Mr. Wheeler), in January 2012, we paid bonuses to our Named Executives for their performance in 2011 representing the following percentages of base salary as of December 31, 2011:

Name
  Target Bonus
Potential as a
Percentage of
Base Salary
  2011 Bonus
Payment
  Percentage of
2011 Base
Salary
  Percentage of
Target Bonus
 

Craig A. Wheeler

    60 % $ 380,468     66.0 %   110.0 %

Richard P. Shea

    35 % $ 127,641     37.5 %   107.3 %

James M. Roach

    35 % $ 141,543     38.5 %   110.0 %

Ganesh Venkataraman Kaundinya

    35 % $ 138,592     38.5 %   110.0 %

Bruce A. Leicher

    35 % $ 139,320     39.9 %   114.1 %

        In February 2012, our compensation committee met to establish corporate goals for 2012, which are: enabling manufacture of enoxaparin sodium injection (10%); advancing our M356, M402, research and follow-on biologics programs (30%, 5%, 10% and 30%, respectively); maintain market capitalization (5%); and achievement of financial discipline goals (10%).

        Special Cash Bonus 2011.     In January 2012, our compensation committee approved a special bonus to Mr. Leicher in the amount of $40,000 in recognition of his efforts regarding various litigation matters and government affairs endeavors undertaken for the company during 2011.

        Equity Awards.     Compensation for employees, including executive officers, also includes equity awards designed to align the long-term interests of our employees and our stockholders and to assist in the retention of executives. We believe that equity compensation is a critical component of competitive compensation in the industry in which we operate.

        We award initial stock option grants to executives when they join Momenta or are promoted to executive officer. The size of an initial stock option grant is generally targeted to be within a pre-set range and is approved by the compensation committee. Initial stock option grants typically vest as to 25% of the shares subject to such option one year from the date of grant and 6.25% of the shares

27


subject to such option vest on a quarterly basis thereafter. Annual performance grants are also made pursuant to a pre-set range approved by the board of directors and set forth on a matrix that is generally intended to reflect the level of the employee's position with us as well as an individual's performance relative to his or her goals and other employees at the same performance and position level. These stock option grants are typically made annually in conjunction with the review of individual performance. This review takes place at the beginning of each fiscal year for performance in the previous year, and is reviewed and awarded annually, typically at the regularly scheduled meeting of the compensation committee following completion of company-wide performance reviews. Performance options generally vest quarterly over a four-year period commencing three months from the date of grant. Stock option grants, whether made either by the CEO or by the compensation committee, are made on regularly-scheduled monthly dates that occur outside of regularly-scheduled quarterly financial blackout periods.

        We have also made restricted stock awards to our CEO and executives as a complement to granting stock options in order to balance the volatility of the price of stock options and to assist with compliance with our stock ownership guidelines. In addition, we have made special restricted stock awards from time to time. When such restricted stock has been awarded, the circumstances were carefully evaluated and we focused on factors such as the individual's contribution to Momenta, his or her importance to Momenta and, in some cases, the achievement of key milestones.

        For 2011 performance, our compensation committee approved annual stock option grants to all of our employees, including the Named Executives, and also approved the award of restricted stock to executives, including the Named Executives. The compensation committee does not use a quantitative formula to relate option grants or restricted stock awards to the degree to which an individual achieved his or her goals for a particular year. Goal achievement and non-goal specific activities are considered when making the assessment of an executive's overall contribution. The compensation committee intends that the annual aggregate value of awards (using the Black Scholes model or equivalent valuation methodology) to executives will be set near competitive levels for companies represented in the compensation data it reviews from its compensation consultants.

        The compensation committee reviewed equity awards for 2011 performance of the Named Executives in February 2012. At that meeting, the compensation committee approved the following equity awards for our Named Executives as follows:

Name
  Number of Shares of
Common Stock Underlying
Stock Options(1)
  Shares of Restricted
Common Stock(2)
 

Craig A. Wheeler

    150,000     60,000  

Richard P. Shea

    20,000     7,000  

James M. Roach

    26,183     10,473  

Ganesh Venkataraman Kaundinya

    26,183     10,473  

Bruce A. Leicher

    30,000     13,000  

(1)
The shares of common stock underlying these options vest as to 6.25% of the shares at the end of each three-month period after the date of grant.

(2)
These shares of common stock are subject to a restricted stock agreement, pursuant to which 25% of such shares vest and become free from forfeiture on the first anniversary of the date of grant and an additional 6.25% of the shares vest and become free from forfeiture at the end of each successive three-month period thereafter.

        Special Equity Award 2011.     In March 2011, our compensation committee approved awards of restricted stock to all employees with vesting tied to approval by the U.S. Food and Drug Administration of the abbreviated new drug application for M356, our generic version of Copaxone®, currently under review. If approved, this will be a major milestone for us and the compensation

28


committee wanted to provide incentive and reward to employees in the event of approval. As a result, awards of restricted stock were made to our Named Executives as follows:

Name
  Shares of Restricted
Common Stock(1)
 

Craig A. Wheeler

    147,500  

Richard P. Shea

    45,000  

James M. Roach

    45,000  

Ganesh Venkataraman Kaundinya

    45,000  

Bruce A. Leicher

    45,000  

(1)
Fifty percent of the shares vest on the date that we (or any of our collaborative partners) receive marketing approval from the U.S. Food and Drug Administration for M356 in the United States provided that approval occurs on or before March 28, 2015, and the remaining fifty percent of the shares vest on the first anniversary of such initial vest date; provided, however that all of the shares shall vest if we consummate a transaction whereby our tangible or intangible assets in or related to M356 are transferred to a third party.

        Timing and Pricing of Option Grants.     The compensation committee's procedure for timing of equity grants is intended to ensure that grant timing is not manipulated to result in a price that is favorable to employees. Commencing in 2007, the annual equity grant date for all eligible employees, including the Named Executives, is the date of the regularly scheduled meeting of the compensation committee following completion of company-wide performance reviews. The grant date timing is driven by the fact that it coincides with our calendar-year-based performance management cycle, allowing us to deliver the equity awards close in time to performance appraisals, which increases the impact of the awards by strengthening the link between pay and performance.

        Aside from the annual equity grant, it is our policy that options will normally be granted:

        The compensation committee sets the exercise price of all stock options to equal the closing price of our common stock on the NASDAQ Global Market on the day before the date of grant in the case of annual non-employee director grants, and the date of grant for all other grants.

        Other Elements of Compensation and Perquisites.     In order to attract, retain and pay market levels of compensation, we provide our executive officers and other employees the following benefits and perquisites:

        Medical Insurance.     We provide to our Named Executives, their spouses, domestic partners and children, health, dental and vision insurance coverage that we generally make available to other employees. We pay a portion of the premiums for this insurance for all employees.

        Life and Disability Insurance.     We provide each Named Executive disability and/or life insurance that we may from time to time make available to other executive employees of the same level of employment. Our CEO also receives reimbursement for an additional $3.0 million dollar life and disability policy, capped at a maximum of $5,000 of reimbursement premium per year.

        Defined Contribution Plan.     We offer a Section 401(k) Savings/Retirement Plan, or the 401(k) Plan, a tax-qualified retirement plan, to eligible employees. The 401(k) Plan permits eligible employees to defer up to 60% of their annual eligible compensation, subject to certain limitations imposed by the Internal Revenue Code, which we refer to as the Code. The employees' elective deferrals are

29


immediately vested and non-forfeitable in the 401(k) Plan. In any plan year, we will contribute to each participant a matching contribution equal to 50% of the first 6% of the participant's compensation that he or she has contributed to the plan. Our contribution is subject to vesting at the rate of 25% at the end of each year over the first four years of employment. All of our Named Executives participated in the 401(k) Plan during 2011 and received matching contributions.

        Employee Stock Purchase Plan.     We also offer an Employee Stock Purchase Plan, or the ESPP. The ESPP is available to all of our employees, including the Named Executives, who work more than 20 hours in a week and five months during the course of a year. Under the ESPP, eligible participants purchase shares of our common stock at a discount of 15% from the fair market value of the lower of the beginning date or end date of the applicable purchase period. The purchase dates occur on the last business day of January and July of each year. To pay for the shares, each participant may authorize periodic payroll deductions ranging from 1% to 15% of his or her cash compensation, subject to certain limitations imposed by applicable law. All payroll deductions collected from the participant during a plan period are automatically applied to the purchase of common stock on that period's purchase date provided the participant remains an eligible employee and has not withdrawn from the ESPP prior to that date.

        Other.     We make available certain other perquisites or fringe benefits to all eligible employees, including the Named Executives, such as tuition reimbursement, parking fees, mass transit commuting passes, professional society dues, gym subsidies, cell phones and food and recreational fees incidental to official company functions, including board meetings. The CEO is also entitled to financial and tax advice and reimbursement of expenses in connection with using his personal airplane for business purposes (up to the equivalent amount of a first class commercial fare per usage).

        Severance and Change-of-Control Benefits.     Pursuant to employment agreements, our Named Executives are entitled to specified benefits in the event of the termination of their employment under specified circumstances, including termination without cause and for good reason following a change of control of Momenta.

        We believe that severance protections, particularly in the context of a change-of-control transaction, can play a valuable role in attracting and retaining executive officers, are an important part of an executive's compensation and are consistent with competitive practices. Accordingly, we provide such protections for our Named Executives and certain other executive officers. We believe that the occurrence, or potential occurrence, of a change-of-control will create uncertainty regarding the continued employment of our Named Executives. This uncertainty results from the fact that many change-of-control transactions result in significant organizational changes, particularly at the senior executive level. Our practice, in the case of our employment agreements, has been to structure these change-of-control benefits as "double trigger" benefits. In other words, the change of control does not itself trigger benefits; rather, benefits are paid only if the employment of the Named Executive is terminated during the twelve-month (or 24-month in the case of the CEO) period after the change of control. We believe a "double trigger" benefit maximizes stockholder value because it prevents an unintended windfall to executives in the event of a friendly change of control, while still providing them appropriate incentives to cooperate in negotiating any change of control in which they believe they may lose their jobs. Because we believe that a termination by the executive for good reason is conceptually the same as a termination by us without cause, and that in the context of a change-of-control potential acquirers would otherwise have an incentive to constructively terminate the executive's employment to avoid paying severance, we provide severance benefits in these circumstances. We have provided more detailed information about these benefits, along with estimates of their value under various circumstances, under the captions "—Employment, Severance and Change of Control Arrangements" and "—Potential Termination and Change of Control Payments" below.

30


Tax Considerations

        Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1,000,000 per person on the amount of compensation that a public company may deduct in any year with respect to its chief executive officer and the three most highly compensated named executive officers employed by the company at the end of the year (other than the company's chief financial officer). However, some forms of performance-based compensation are excluded from the $1,000,000 deduction limit if certain requirements are met. Our compensation committee has not adopted a policy requiring all executive compensation to be fully deductible. However, our compensation committee reviews the potential impact of section 162(m) periodically and, if consistent with its goals of sustained profitability and creation of long-term stockholder value, may seek to structure executive officer compensation to allow deductions under section 162(m). Our compensation committee reserves the right to use its judgment to authorize compensation payments that may be subject to the section 162(m) limitation when it believes these payments are appropriate.

31



SUMMARY COMPENSATION TABLE FOR 2011

        The following table sets forth information regarding compensation earned by Named Executives.

Name and Principal Position
  Year   Salary
($)
  Stock
Awards(1)
($)
  Option
Awards(1)
($)
  Non-Equity
Incentive Plan
Compensation
($)
  All Other
Compensation(2)
($)
  Total
($)
 

Craig A. Wheeler

    2011     576,467     3,140,625     869,920     380,468     23,345     4,990,825  

President, Chief Executive Officer

    2010     549,016     1,152,750     993,200     494,115     23,510     3,212,591  

and Director

    2009     530,450     782,250     840,480     218,015     43,152     2,414,347  

Richard P. Shea

   
2011
   
340,035
   
777,683
   
201,630
   
127,641
   
11,670
   
1,458,659
 

Senior Vice President and Chief

    2010     302,253     146,015     235,885     158,682     11,490     854,325  

Financial Officer

    2009     292,032     89,177     143,722     68,264     11,435     604,630  

James M. Roach

   
2011
   
367,644
   
777,683
   
201,630
   
141,543
   
11,670
   
1,500,170
 

Chief Medical Officer

    2010     355,212     146,015     235,885     186,487     11,490     935,089  

and Senior Vice President, Development

    2009     343,200     99,085     159,691     82,282     11,470     695,728  

Ganesh Venkataraman Kaundinya

   
2011
   
359,980
   
789,975
   
221,786
   
138,592
   
12,018
   
1,522,351
 

Chief Scientific Officer and Senior

    2010     346,135     160,617     259,474     184,386     11,925     962,537  

Vice President, Research

    2009     314,668     94,131     151,707     77,328     11,847     649,681  

Bruce A. Leicher

   
2011
   
348,791
   
777,683
   
201,630
   
179,320
   
11,370
   
1,518,794
 

Senior Vice President, General Counsel

    2010     336,996     146,015     235,885     176,922     11,370     907,188  

and Secretary

                                           

(1)
Valuation based on the aggregate grant date fair value of stock and option awards computed in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718, Stock Compensation (excluding the effect of estimated forfeitures). These amounts include awards of restricted stock that contain a performance condition: the marketing approval from the U.S. Food and Drug Administration for M356 in the United States. The Company determined that it is probable this performance condition will be achieved. The aggregate grant date fair value of stock and option awards do not correspond to the actual value that will be realized by the Named Executive upon vesting or exercise of such award. The assumptions used by us with respect to the valuation of stock and option awards are set forth in Note 11 to our financial statements contained in our Annual Report on Form 10-K for year ended December 31, 2011 as filed with the Securities and Exchange Commission on February 28, 2012.

(2)
The following table sets forth information regarding all other compensation for the year ended December 31, 2011:

Name
  Tax
Advice
Expense ($)
  Insurance
Expense ($)
  Tax
Gross-up
($)
  401(k)
Match
($)
  Parking/
Transit/Fuel
Expense ($)
  Gym
Fees
($)
  Insurance
Premiums
($)
  Total
($)
 

Craig A. Wheeler

    5,000     5,000     3,175     7,350     1,620           1,200     23,345  

Richard P. Shea

                7,350     3,120         1,200     11,670  

James M. Roach

                7,350     3,120         1,200     11,670  

Ganesh Venkataraman Kaundinya

                7,350     3,120     348     1,200     12,018  

Bruce A. Leicher

                7,350     2,820         1,200     11,370  

32



2011 GRANTS OF PLAN-BASED AWARDS

        The following table sets forth information regarding awards made to our Named Executives during the year ended December 31, 2011:

Name
  Type of
Award(1)
  Grant
Date
  Target
($)
  Maximum
($)
  Stock
Awards:
Number of
Shares of
Stock
(#)
  Option
Awards:
Number of
Securities
Underlying
Options
(#)
  Exercise
Price of
Option
Awards(6)
($/Sh)
  Grant Date
Fair Value
of Stock
and
Option
Awards(7)
($)
 

Craig A. Wheeler

  RS     3/28/2011 (3)           147,500             2,146,125  

  RS     2/22/2011 (4)           75,000             994,500  

  SO     2/22/2011 (5)               100,000     13.26     869,920  

  AIBP     N/A     345,880     864,701                          

Richard P. Shea

 

RS

   
3/28/2011

(3)
 
   
   
45,000
   
   
   
654,750
 

  RS     2/22/2011 (4)           9,271             122,933  

  SO     2/22/2011 (5)               23,178     13.26     201,630  

  AIBP     N/A     119,012                                

James M. Roach

 

RS

   
3/28/2011

(3)
 
   
   
45,000
   
   
   
654,750
 

  RS     2/22/2011 (4)           9,271             122,933  

  SO     2/22/2011 (5)               23,178     13.26     201,630  

  AIBP     N/A     128,676                                

Ganesh Venkataraman Kaundinya

 

RS

   
3/28/2011

(3)
 
   
   
45,000
   
   
   
654,750
 

  RS     2/22/2011 (4)           10,198             135,225  

  SO     2/22/2011 (5)               25,495     13.26     221,786  

  AIBP     N/A     125,993                                

Bruce A. Leicher

 

RS

   
3/28/2011

(3)
 
   
   
45,000
   
   
   
654,750
 

  RS     2/22/2011 (4)           9,271             122,933  

  SO     2/22/2011 (5)               23,178     13.26     201,630  

  AIBP     N/A     122,077                                

(1)
Type of Award:
AIBP = Annual Incentive Bonus Plan
RS = Restricted Stock
SO = Stock Option

(2)
All awards in these columns were granted under our annual incentive cash bonus plan. The actual amounts awarded are reported in the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table above. See "Executive Compensation—Compensation Discussion and Analysis—Elements of Compensation—Annual Incentive Cash Bonus" for a description of this plan.

(3)
These shares of common stock are subject to a restricted stock agreement dated March 28, 2011, pursuant to which 50% of such shares shall vest on the date that we (or any of our collaborative partners) receives marketing approval from the Food and Drug Administration for M356 in the United States, provided that approval occurs on or before March 28, 2015; and the remaining fifty percent (50%) of the shares shall vest on the first anniversary of such initial vest date. The restricted common stock will only vest if the recipient is an employee of ours as of the applicable vesting date.

(4)
These shares of common stock are subject to a restricted stock agreement dated February 22, 2011, pursuant to which 25% of such shares vested and became free from forfeiture on February 22, 2012 and an additional 6.25% of the shares vest and become free from forfeiture at the end of each successive three-month period thereafter.

(5)
The shares of common stock underlying this option vest as to 6.25% of the shares at the end of each three-month period beginning on February 22, 2011.

(6)
The exercise price of the applicable stock option is equal to the closing price of our common stock as reported by the NASDAQ Global Market on the date of grant.

(7)
Valuation based on the aggregate grant date fair value of stock and option awards computed in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures). These amounts include awards of restricted stock that contain a performance condition: the marketing approval from the U.S. Food and Drug Administration for M356 in the United States. The Company determined that it is probable this performance condition will be achieved. The aggregate grant date fair value of stock and option awards do not correspond to the actual value that will be realized by the Named Executive upon vesting or exercise of such award. The assumptions used by us with respect to the valuation of stock and option awards are set forth in Note 11 to our financial statements contained in our Annual Report on Form 10-K for year ended December 31, 2011 as filed with the Securities and Exchange Commission on February 28, 2012.

33



OUTSTANDING EQUITY AWARDS AT 2011 YEAR-END

        The following table sets forth information regarding outstanding stock options and awards of restricted stock held by our Named Executives as of December 31, 2011:

 
  Option Awards   Stock Awards  
Name
  Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
  Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number
of Shares
That Have
Not Vested
(#)
  Market Value
of Shares
That Have
Not Vested(1)
($)
 

Craig A. Wheeler

    375,000 (2)       16.18     8/21/2016     4,688 (3)   81,524  

    70,750 (4)   6,250     7.41     2/22/2018     23,438 (5)   407,587  

    68,750 (6)   31,250     10.43     2/25/2019     42,188 (7)   733,649  

    43,750 (8)   56,250     15.37     2/18/2020     75,000 (9)   1,304,250  

    18,750 (10)   81,250     13.26     2/22/2021     147,500 (11)   2,565,025  

Richard P. Shea

   
108,800

(12)
 
   
0.61
   
10/27/2013
   
675

(3)
 
11,738
 

    12,800 (13)       4.91     3/24/2014     2,673 (5)   46,483  

    11,250 (14)       6.88     1/31/2015     5,344 (7)   92,932  

    18,750 (15)       23.62     3/6/2016     9,271 (9)   161,223  

    7,000 (16)       12.81     2/21/2017     45,000 (11)   782,550  

    15,000 (17)       10.41     8/14/2017          

    32,578 (4)   2,172     7.41     2/22/2018          

    11,756 (6)   5,344     10.43     2/25/2019          

    10,390 (8)   13,360     15.37     2/18/2020          

    4,345 (10)   18,833     13.26     2/22/2021          

James M. Roach

   
152,343

(4)
 
10,157
   
7.41
   
2/22/2018
   
2,969

(5)
 
51,631
 

    13,062 (6)   5,938     10.43     2/25/2019     5,344 (7)   92,932  

    10,390 (8)   13,360     15.37     2/18/2020     9,271 (9)   161,223  

    4,345 (10)   18,833     13.26     2/22/2021     45,000 (11)   782,550  

Ganesh Venkataraman

                                     

    Kaundinya

    7,200 (18)       0.99     4/6/2014     313 (3)   5,443  

    31,200 (18)       4.91     4/6/2014     2,821 (5)   49,057  

    25,000 (14)       6.88     1/31/2015     5,879 (7)   102,236  

    15,000 (16)       12.81     2/21/2017     10,198 (9)   177,343  

    32,578 (4)   2,172     7.41     2/22/2018     45,000 (11)   782,550  

    12,408 (6)   5,642     10.43     2/25/2019          

    11,429 (8)   14,696     15.37     2/18/2020          

    4,780 (10)   20,715     13.26     2/22/2021          

Bruce A. Leicher

   
81,250

(19)
 
18,750
   
15.12
   
8/19/2018
   
4,688

(20)
 
81,524
 

    9,143 (6)   4,157     10.43     2/25/2019     2,079 (5)   36,154  

    10,390 (8)   13,360     15.37     2/18/2020     5,344 (7)   92,932  

    4,345 (10)   18,833     13.26     2/22/2021     9,271 (9)   161,223  

                    45,000 (11)   782,550  

(1)
Based on $17.39 per share, the last sale price of Momenta common stock on December 30, 2011.

(2)
Represents two option grants made on August 22, 2006, each with an exercise price of $16.18. The shares of common stock underlying these options vested as to 25% of the shares on August 22, 2007 and as to an additional 6.25% of the shares at the end of each successive three-month period thereafter.

(3)
These shares of common stock are subject to a restricted stock agreement dated February 22, 2008, pursuant to which 25% of such shares vested and became free from forfeiture on February 22, 2009 and an additional 6.25% of the shares vest and become free from forfeiture at the end of each successive three-month period thereafter.

(4)
The shares of common stock underlying these options vest as to 6.25% of the shares at the end of each three-month period beginning on May 22, 2008.

34


(5)
These shares of common stock are subject to a restricted stock agreement dated February 25, 2009, pursuant to which 25% of such shares vested and became free from forfeiture on February 25, 2010 and an additional 6.25% of the shares vest and become free from forfeiture at the end of each successive three-month period thereafter.

(6)
The shares of common stock underlying these options vest as to 6.25% of the shares at the end of each three-month period beginning on May 25, 2009.

(7)
These shares of common stock are subject to a restricted stock agreement dated February 18, 2010, pursuant to which 25% of such shares vested and became free from forfeiture on February 18, 2011 and an additional 6.25% of the shares vest and become free from forfeiture at the end of each successive three-month period thereafter.

(8)
The shares of common stock underlying these options vest as to 6.25% of the shares at the end of each three-month period beginning on May 18, 2010.

(9)
These shares of common stock are subject to a restricted stock agreement dated February 22, 2011, pursuant to which 25% of such shares vested and became free from forfeiture on February 22, 2012 and an additional 6.25% of the shares vest and become free from forfeiture at the end of each successive three-month period thereafter.

(10)
The shares of common stock underlying these options vest as to 6.25% of the shares at the end of each three-month period beginning on February 22, 2011.

(11)
These shares of common stock are subject to a restricted stock agreement dated March 28, 2011, pursuant to which 50% of such shares shall vest on the date that the Company (or any of the Company's partners or collaborators) receives marketing approval from the Food and Drug Administration for M356, a generic version of Copaxone® (glatiramer acetate injection), in the United States, provided that approval occurs on or before March 28, 2015; and the remaining fifty percent (50%) of the shares shall vest on the first anniversary of such initial vest date. The restricted common stock will only vest if the recipient is an employee of the Company as of the applicable vesting date.

(12)
The shares of common stock underlying this option vested as to 25% of the shares on October 28, 2004 and as to an additional 6.25% of the shares at the end of each successive three-month period thereafter.

(13)
The shares of common stock underlying this option vested as to 25% of the shares on October 29, 2004 and as to an additional 6.25% of the shares at the end of each successive three-month period thereafter.

(14)
The shares of common stock underlying this option vested as to 6.25% of the shares at the end of each three-month period beginning on May 1, 2005.

(15)
The shares of common stock underlying this option vested as to 6.25% of the shares at the end of each three-month period beginning on June 7, 2006.

(16)
The shares of common stock underlying this option vested as to 6.25% of the shares at the end of each three-month period beginning on May 22, 2007.

(17)
The shares of common stock underlying this option vested as to 6.25% of the shares at the end of each three-month period beginning on November 15, 2007.

(18)
To avoid unintended adverse tax consequences to Dr. Kaundinya under Section 409A of the Internal Revenue Code, we and Dr. Kaundinya amended an outstanding stock option to purchase 38,400 shares of common stock with an original exercise price of $0.99 per share. As amended, the portion of the original option vested as of December 31, 2004, or 7,200 shares, remained in full force and effect and continued to have an exercise price of $0.99. The remaining portion of such option was deemed cancelled and a replacement option for the purchase of 31,200 shares was deemed granted to Dr. Kaundinya on December 30, 2005 with an exercise price equal to $4.91 per share. The shares of common stock underlying this replacement option vested as to 12,000 shares on January 1, 2006 and as to an additional 6.25% of the shares at the end of each three-month period beginning on April 1, 2006.

(19)
The shares of common stock underlying this option vested as to 25% of the shares on August 19, 2009 and as to an additional 6.25% of the shares at the end of each successive three-month period thereafter.

(20)
These shares of common stock are subject to a restricted stock agreement dated August 19, 2008, pursuant to which 25% of such shares vested and became free from forfeiture on August 19, 2009 and an additional 6.25% of the shares vest and become free from forfeiture at the end of each successive three-month period thereafter.

(21)
The shares of common stock underlying this option vested as to 25% of the shares on December 15, 2007 and as to an additional 6.25% of the shares at the end of each successive three-month period thereafter.

35



2011 OPTION EXERCISES AND STOCK VESTED

        The following table sets forth information regarding options exercised by our Named Executives and shares of restricted stock that vested and became free from forfeiture during the fiscal year ended December 31, 2011.

 
  Option Awards   Stock Awards  
Name
  Number of
Shares Acquired
on Exercise
(#)
  Value Realized
on Exercise
($)(1)
  Number of
Shares Acquired
on Vesting
(#)
  Value Realized
on Vesting(2)
($)
 

Craig A. Wheeler

    23,000     287,437     70,312     1,080,416  

Richard P. Shea

            11,806     184,495  

James M. Roach

            6,531     99,698  

Ganesh Venkataraman Kaundinya

            8,077     123,527  

Bruce A. Leicher

            12,069     186,774  

(1)
Value realized on exercise is based on the closing sale price of our common stock on the applicable date of exercise less the applicable option exercise price.

(2)
Value realized upon vesting is based on the closing sale price of our common stock on the applicable vesting date.

Employment, Severance and Change of Control Arrangements

Craig A. Wheeler Employment Agreement

        On August 22, 2006, we entered into an employment agreement with Craig A. Wheeler, pursuant to which Mr. Wheeler serves as our President and CEO and as a member of the board of directors. In December 2010, Mr. Wheeler's employment agreement was amended to ensure compliance with Section 409A of the Internal Revenue Code of 1986, as amended. Pursuant to his employment agreement, Mr. Wheeler receives an annual base salary determined by the compensation committee, which is $600,000 for 2012. Mr. Wheeler is also eligible to receive bonuses of up to 150% of his base salary for the applicable fiscal year, with an annual bonus target of 60% of the then-applicable base salary. The compensation committee approved a $380,468 bonus paid to Mr. Wheeler in 2012 based on our achievement of corporate goals in 2011. Mr. Wheeler is also entitled to specified benefits, including: participation in our sponsored benefit programs; reimbursement for life insurance premium expenses and related tax gross-up payments; and reimbursement of tax and financial advisor fees incurred by Mr. Wheeler during the period of his employment.

        Mr. Wheeler's employment agreement also provided for the grant or issuance, as applicable, of certain stock-based awards, all of which have fully vested and are reflected in the Outstanding Equity Awards at 2011 Year End table to the extent still held by Mr. Wheeler. Since 2009, the grant of stock-based awards to Mr. Wheeler has been at the discretion of the board of directors in accordance with the overall equity practices of the company.

        In the event that Mr. Wheeler's employment is terminated by us without cause, by reason of his death or disability or by him for good reason, other than in connection with a change in control (as those terms are defined in his employment agreement), the vesting schedule applicable to stock-based awards held by Mr. Wheeler at the time of such termination will accelerate by 25%.

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        In the event Mr. Wheeler's employment is terminated by us without cause within 24 months following a change of control (as such term is defined in the employment agreement) or is terminated by Mr. Wheeler for good reason within 24 months following a change of control, the unvested portions of all stock-based awards shall fully and immediately vest.

        Under his employment agreement, Mr. Wheeler or Momenta may terminate his employment at any time. In the event Mr. Wheeler's employment is terminated without cause by us, as the result of death or disability or Mr. Wheeler terminates his employment for good reason, other than in connection with a change in control, we have agreed to pay Mr. Wheeler a lump sum equal to:

        Additionally, Mr. Wheeler and his dependents will receive comparable benefits for a maximum of 12 months following such termination subject to his re-employment with comparable benefits.

        If Mr. Wheeler terminates his employment for good reason within 24 months following a change of control of Momenta, or if we terminate Mr. Wheeler's employment without cause within 24 months following a change of control, we have agreed to pay Mr. Wheeler a lump-sum cash payment equal to:

        Additionally, Mr. Wheeler is entitled to a tax gross-up payment following such termination and Mr. Wheeler and his dependents will receive comparable benefits for a maximum of 36 months following such termination subject to his re-employment with comparable benefits.

Other Provisions

        Our employment agreement with Mr. Wheeler also contains non-disclosure, non-competition and assignment of intellectual property terms. These terms provide for the protection of our confidential information, the transfer of ownership rights to intellectual property developed by Mr. Wheeler to us and a 12-month non-compete provision.

Executive Employment Agreements with Richard P. Shea, James M. Roach, Ganesh Venkataraman Kaundinya and Bruce A. Leicher

        We have also entered into executive employment agreements, or the Executive Employment Agreements, with Richard P. Shea, James M. Roach, Ganesh Venkataraman Kaundinya and Bruce A. Leicher. In December 2010, each of the Executive Employment Agreements was amended to ensure compliance with Section 409A of the Internal Revenue Code of 1986, as amended.

        Pursuant to the Executive Employment Agreements, we have agreed to pay Messrs. Shea, Roach, Kaundinya and Leicher annual base salaries as determined by the compensation committee. If our board of directors approves an annual bonus, Messrs. Shea, Roach, Kaundinya and Leicher will be

37


eligible for a discretionary bonus award. The annual target for each executive's bonus will be 35% of the executive's annualized base salary. The compensation committee will determine, in its sole discretion, whether (and in what amount) a bonus award is payable to each executive. In order to be eligible for any bonus hereunder, the executive must be an active employee of Momenta on the date such bonus is paid.

        Each executive shall be entitled to participate in all benefit plans and programs that we establish and make available to our employees to the extent that the executive is eligible under (and subject to the provisions of) the plan documents governing those programs.

        If the executive voluntarily resigns his employment other than for good reason (as defined in each Executive Employment Agreement), or if we terminate the executive for cause (as defined in each Executive Employment Agreement), we shall pay the executive all accrued and unpaid base salary through the executive's date of termination and any vacation that is accrued but unused as of such date. The executive shall not be eligible for any severance or separation payments or any continuation of benefits (other than those provided for COBRA), or any other compensation pursuant to the Executive Employment Agreement or otherwise. The executive also shall have such rights, if any, with respect to outstanding stock options and restricted stock grants as may be provided under each applicable agreement.

        If the executive's employment with us is terminated by reason of the executive's death or disability (as defined in each Executive Employment Agreement), by us without cause, or by the executive's voluntary resignation for good reason, other than in connection with a change in control (as defined in each Executive Employment Agreement), then the executive shall be paid all accrued and unpaid base salary and any accrued but unused vacation through the date of termination. In addition, the executive shall be eligible to receive the following separation benefits:

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        If the executive's employment with the Company is terminated without cause or if the executive terminates his employment with good reason within one year following a change in control (as defined in each Executive Employment Agreement), the executive shall be entitled to all accrued and unpaid base salary and any accrued but unused vacation through the date of termination. In addition, the executive shall be eligible to receive the following separation benefits:

        Each of Messrs. Shea, Roach, Kaundinya and Leicher have entered into agreements providing for the protection of our confidential information, the transfer of ownership rights to intellectual property developed by each such executive to us and a 12-month non-compete provision.

Potential Termination and Change of Control Payments

        The following table describes the potential payments, benefits and acceleration of vesting applicable to stock options and restricted stock awards under our employment agreement with Craig A. Wheeler. The amounts shown below assume that the termination of Mr. Wheeler was effective as of

39


December 31, 2011. Actual amounts payable to Mr. Wheeler upon his termination can only be determined definitively at the time of his actual departure.

Benefit
  Voluntary Termination or
Termination for Cause
  Termination Without
Cause, Termination by
Reason of Death or
Disability, Resignation
for Good Reason
  Termination Without
Cause or Resignation
for Good Reason
Within 24 Months of a
Change of Control
 

Accrued Obligations

                   

Unused Vacation

  $ 32,149   $ 32,149   $ 32,149  

Severance Benefits

                   

Lump-sum cash payment

      $ 938,818 (2) $ 1,877,636 (3)

Lump-sum payment with respect to business combination

          $ 938,818 (4)

Insurance/Healthcare benefits

      $ 23,944 (5) $ 71,832 (6)

Market Value of Stock Vesting on Termination (1)

      $ 1,563,199 (7) $ 5,821,098 (8)

Gross-Up Payments

          $ 4,118,947 (9)
               

Total

  $ 32,149   $ 2,558,110   $ 12,860,480  
               

(1)
Based on the last sale price of our common stock on December 30, 2011, which was $17.39 per share.

(2)
Represents a lump sum payment equal to 12 months of the highest base salary in effect for Mr. Wheeler during the 12 months prior to his termination, or $576,467, plus an amount equal to his last paid bonus, or $362,351. This amount is to be paid in full six months and one day after the date of Mr. Wheeler's termination.

(3)
Represents a lump sum payment equal to 24 months of the highest base salary in effect for Mr. Wheeler during the 12 months prior to his termination, or $1,152,934, plus an amount equal to two times his last paid bonus, or $724,702. This amount is to be paid in full six months and one day after the date of Mr. Wheeler's termination.

(4)
Assumes that the change of control involves a business combination with an aggregate purchase price exceeding $1.1 billion. In such event, Mr. Wheeler is entitled to an additional lump sum payment equal to 12 months of the highest base salary in effect for Mr. Wheeler during the 12 months prior to his termination, or $576,467, plus an amount equal to his last paid bonus, or $362,351.

(5)
Represents benefits payable over 12 months for continuation of coverage under medical and dental plans for Mr. Wheeler and his dependents subject to Mr. Wheeler's re-employment with comparable healthcare benefits. The value is based upon the type of insurance coverage we carried for Mr. Wheeler as of December 31, 2011 and is valued at the premiums in effect on December 31, 2011.

(6)
Assumes that the change of control involves a business combination with an aggregate purchase price exceeding $1.1 billion, and represents benefits payable over 36 months for continuation of coverage under medical and dental plans for Mr. Wheeler and his dependents subject to Mr. Wheeler's re-employment with comparable healthcare benefits. In the event the aggregate purchase price is less than $1.1 billion, Mr. Wheeler would be entitled to 24 months continuation of coverage under medical and dental plans for Mr. Wheeler and his dependents subject to Mr. Wheeler's re-employment with comparable healthcare benefits, with a value equal to $71,832. This value is based upon the type of insurance coverage we carried for Mr. Wheeler as of December 31, 2011 and is valued at the premiums in effect on December 31, 2011.

(7)
Represents the acceleration of vesting by 12 months on 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 22, 2008 and 100,000

40


    shares of common stock underlying stock options granted to Mr. Wheeler dated February 22, 2008. Additionally, vesting is accelerated by 25% on 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 25, 2009, 100,000 shares of common stock underlying stock options granted to Mr. Wheeler on February 25, 2009, 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 18, 2010, 100,000 shares of common stock underlying stock options granted to Mr. Wheeler on February 18, 2010, 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 22, 2011, 100,000 shares of common stock underlying stock options granted to Mr. Wheeler on February 22, 2011 and 147,500 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated March 28, 2011. If Mr. Wheeler's employment with us is terminated without cause in periods after December 31, 2011, acceleration of vesting to additional equity awards will apply. See the discussion in this proxy statement under the heading "Employment, Severance and Change of Control Arrangements—Craig A. Wheeler Employment Agreement."

(8)
Represents the immediate vesting in full of 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 22, 2008, 100,000 shares of common stock underlying stock options granted to Mr. Wheeler dated February 22, 2008, 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 25, 2009, 100,000 shares of common stock underlying stock options granted to Mr. Wheeler on February 25, 2009, 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 18, 2010, 100,000 shares of common stock underlying stock options granted to Mr. Wheeler on February 18, 2010, 75,000 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated February 22, 2011, 100,000 shares of common stock underlying stock options granted to Mr. Wheeler on February 22, 2011 and 147,500 shares of common stock subject to a restricted stock agreement between us and Mr. Wheeler dated March 28, 2011. If Mr. Wheeler's employment with us is terminated without cause in periods after December 31, 2011, acceleration of vesting to additional equity awards will apply. See the discussion in this proxy statement under the heading "Employment, Severance and Change of Control Arrangements—Craig A. Wheeler Employment Agreement."

(9)
Represents the excise tax payable under section 280G of the United States Internal Revenue Code.

        The following table describes the potential payments, benefits and acceleration of vesting applicable to stock options and restricted stock awards under our Executive Employment Agreements with each of Messrs. Shea, Roach, Kaundinya and Leicher. The amounts shown below assume that the termination of each executive was effective as of December 31, 2011 and that each of the Executive Employment Agreements was effective as of December 31, 2011. Actual amounts payable to each

41


Named Executive listed below upon his termination can only be determined definitively at the time of each Named Executive's actual departure.

Name
  Benefit   Voluntary
Termination or
Termination
for Cause
  Termination for Death,
Disability, Without Cause
or for Good Reason
Other than in
Connection with
Change of Control
  Termination
Without Cause or
Resignation for
Good Reason Within
12 Months of a
Change of Control
 
Richard P. Shea  

Accrued Obligations

                   
   

Unused Vacation

  $ 19,290   $ 19,290   $ 19,290  
   

Severance Benefits

                   
   

Salary

          340,035 (2)      
   

Lump-sum cash payment

        119,012 (3)   459,047 (4)
   

Insurance/Healthcare benefits

        23,944     23,944 (5)
   

Market Value of Stock Vesting on Termination (1)

        528,776 (6)   1,419,295 (7)
    Total   $ 19,290   $ 1,031,057   $ 1,921,576  

James M. Roach

 

Accrued Obligations

                   
   

Unused Vacation

  $ 14,377   $ 14,377   $ 14,377  
    Severance Benefits                    
   

Salary

          367,644 (2)      
   

Lump-sum cash payment

        136,757 (3)   504,401 (4)
   

Insurance/Healthcare Benefits

        23,944     23,944 (5)
   

Market Value of Stock
Vesting on Termination
(1)

        667,837 (6)   1,568,981 (7)
    Total   $ 14,377   $ 1,210,559   $ 2,111,703  

Ganesh Venkataraman

 

 

 

 

 

 

 

 

 

 

 

 
    Kaundinya  

Accrued Obligations

                   
   

Unused Vacation

  $ 13,845   $ 13,845   $ 13,845  
   

Severance Benefits

                   
   

Salary

          359,980 (2)      
   

Lump-sum cash payment

        135,927 (3)   495,907 (4)
   

Insurance/Healthcare
benefits

        23,944     23,944 (5)
   

Market Value of Stock
Vesting on Termination
(1)

        618,377 (6)   1,525,995 (7)
    Total   $ 13,845   $ 1,152,073   $ 2,059,691  
Bruce A. Leicher   Accrued Obligations                    
   

Unused Vacation

  $ 15,092   $ 15,092   $ 15,092  
    Severance Benefits                    
   

Salary

          348,791 (2)      
   

Lump-sum cash payment

        129,743 (3)   478,534 (4)
   

Insurance/Healthcare Benefits

        23,944     23,944 (5)
   

Market Value of Stock
Vesting on Termination
(1)

        710,502 (6)   1,615,216 (7)
    Total   $ 15,092   $ 1,228,072   $ 2,132,786  

(1)
Based on the last sale price of our common stock on December 30, 2011, which was $17.39 per share.

(2)
Represents an amount equal to the Named Executive's base salary payable over the applicable severance period.

(3)
Represents an amount equal to the greater of (i) the annual bonus paid to the Named Executive for the most recently completed fiscal year or (ii) the 2011 target bonus potential. Such amounts are to be paid within 30 days after the Named Executive's termination date. For more information relating to compensation earned by our Named Executives, see the section of this proxy statement entitled "Executive Compensation—Summary Compensation Table."

(4)
Represents an amount equal to the Named Executive's base salary plus the greater of (i) the annual bonus paid to the Named Executive for the most recently completed fiscal year or (ii) the 2011 target bonus potential. Such amounts are to be paid within 30 days after the Named Executive's termination date. For more information relating to compensation earned by our Named Executives, see the section of this proxy statement entitled "Executive Compensation—Summary Compensation Table."

(5)
Represents amounts payable over 12 months for continuation of coverage for insurance, medical, dental, health and accident and disability benefits for each Named Executive and his family members subject to the Named Executive's

42


    re-employment with comparable healthcare benefits. The value is based upon the type of insurance coverage we carried for each Named Executive as of December 31, 2011 and is valued at the premiums in effect on December 31, 2011.

(6)
Represents continued vesting for an additional 12-month period of all unvested stock options and immediate vesting of all stock awards held by the Named Executives as of December 31, 2011. For more information concerning option and restricted common stock awards held by our Named Executives, see the section of this proxy statement entitled "Executive Compensation—Outstanding Equity Awards at 2011Year End."

(7)
Represents immediate vesting of all unvested stock options and other stock awards held by the Named Executives as of December 31, 2011. For more information concerning option and restricted common stock awards held by our Named Executives, see the section of this proxy statement entitled "Executive Compensation—Outstanding Equity Awards at 2011Year End."

Compensation of Directors

        Non-employee director compensation is set by our board of directors at the recommendation of the compensation committee. Our current compensation for non-employee directors consists of:

        Payment of Retainer Fee; Reimbursement of Travel and Other Expenses.     In addition to an option grant, each non-employee director receives an annual retainer for his or her service on our board of directors as well as additional fees for committee service as follows:

Position
   
  Fees after 2011 Annual Meeting  

Annual Retainer

      $ 40,000  

Non-Employee Chairman of the Board

      $ 30,000  

Audit Committee Chairperson

      $ 20,000  

Audit Committee Members (other than the Chairperson)

      $ 10,000  

Compensation Committee Chairperson

      $ 15,000  

Compensation Committee Members

      $ 7,500  

Nominating and Corporate Governance Committee Chairperson

      $ 12,000  

Nominating and Corporate Governance Committee Members

      $ 6,000  

Science Committee Chairperson

      $ 10,000  

Science Committee Members

      $ 7,500  

Science Committee, Chairperson and Members

  $  3,000 for each all-day session attended (up to a maximum of $15,000 per year) which is in addition to the standard quarterly meetings of the Science Committee
 

        All retainer amounts are paid quarterly. Non-employee directors also received reimbursement for reasonable travel and other expenses in connection with attending meetings of our board of directors.

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        The following table sets forth the fees earned by each of our non-employee directors for his or her service on the board of directors, the aggregate grant date fair value of option awards granted to our non-employee directors for the year ended December 31, 2011:


2011 DIRECTOR COMPENSATION

Name
  Fees Earned or
Paid in Cash(1)
  Option
Awards(2)(3)(4)(5)
  Total  

John K. Clarke

  $ 58,368   $ 184,778   $ 243,146  

Bruce L. Downey

  $ 51,528   $ 184,778   $ 236,306  

Marsha H. Fanucci

  $ 59,287   $ 184,778   $ 244,065  

Peter Barton Hutt

  $ 48,618   $ 184,778   $ 233,396  

Thomas P. Koestler

  $ 46,157   $ 275,739   $ 321,896  

Bennett M. Shapiro

  $ 53,449   $ 184,778   $ 238,227  

Elizabeth Stoner

  $ 49,124   $ 184,778   $ 233,902  

James R. Sulat

  $ 80,836   $ 184,778   $ 265,614  

(1)
The fees earned by the non-employee directors in 2011 consist of the following: (i) an annual retainer; (ii) a fee to the non-employee chairman of the board; and (iii) an annual fee for chairing and being a member of each of the audit, compensation, nominating and corporate governance and science committees.

(2)
Valuation based on the aggregate grant date fair value of stock and option awards computed in accordance with FASB ASC Topic 718, Stock Compensation (excluding the effect of estimated forfeitures). These amounts do not correspond to the actual value that will be realized by the director upon vesting or exercise of such award. The assumptions used by us with respect to the valuation of stock and option awards are set forth in Note 11 to our financial statements contained in our Annual Report on Form 10-K for year ended December 31, 2011 as filed with the Securities and Exchange Commission on February 28, 2012.

(3)
The following table sets forth the option awards granted to our non-employee directors during the year ended December 31, 2011 and the aggregate grant date fair value of those option awards:

Name
  Grant Date   Number of
Shares Subject
to Options
  Grant Date
Fair Value
 

John K. Clarke

    6/14/2011     17,750   $ 184,778  

Bruce L. Downey

    6/14/2011     17,750   $ 184,778  

Marsha H. Fanucci

    6/14/2011     17,750   $ 184,778  

Peter Barton Hutt

    6/14/2011     17,750   $ 184,778  

Thomas P. Koestler

    3/8/2011     30,000   $ 275,739  

Bennett M. Shapiro

    6/14/2011     17,750   $ 184,778  

Elizabeth Stoner

    6/14/2011     17,750   $ 184,778  

James R. Sulat

    6/14/2011     17,750   $ 184,778  
(4)
On June 14, 2011, the day following our 2011 annual meeting of stockholders, we granted each of our non-employee directors (with the exception of Dr. Koestler, who joined the board of directors in January 2011) serving at that time an option to purchase 17,750 shares of our common stock, each with an exercise price equal to the closing price of our common stock on the NASDAQ Global Market on the day prior to the date of grant, which was $18.19 per share. All such options shall become exercisable in four equal quarterly installments commencing the date of grant, provided that the optionee then remains a director.

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(5)
The following table shows the aggregate number of stock option grants outstanding for each non-employee director as of December 31, 2011 and the number of options awards vested during the year ended December 31, 2011:

Name
  Aggregate Number of Shares
Subject to Outstanding
Stock Options(#)
  Number of
Shares Vested
in 2011
 

John K. Clarke

    143,750     16,375  

Bruce L. Downey

    62,750     26,375  

Marsha H. Fanucci

    143,750     16,375  

Peter Barton Hutt

    148,750     16,375  

Thomas P. Koestler

    30,000     7,500  

Bennett M. Shapiro

    134,950     16,375  

Elizabeth Stoner

    76,950     16,375  

James R. Sulat

    70,750     23,875  

Compensation Committee Report

        The compensation committee has reviewed and discussed the Compensation Discussion and Analysis with the Company's management. Based on this review and discussion, the compensation committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

        By the Compensation Committee of the Board of Directors of Momenta Pharmaceuticals, Inc.:

        John K. Clarke (Chairperson)
Bruce L. Downey
Thomas P. Koestler
Bennett M. Shapiro

Compensation Committee Interlocks and Insider Participation

        The compensation committee currently consists of John K. Clarke, who serves as chairman, Bruce L. Downey, Thomas P. Koestler and Bennett M. Shapiro. During 2011, the compensation committee included Peter Barton Hutt and Elizabeth Stoner.

        During 2011, none of our executive officers served as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or compensation committee. None of the members of our compensation committee during 2011 nor any of the current members has ever been an employee of Momenta.

        Novartis Pharma AG, which holds more than five percent of our voting securities, has been granted registration rights with respect to shares of our common stock under the terms of an investors' right agreement with us.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS

        The following table sets forth information regarding beneficial ownership of our common stock as of April 1, 2012 by:

        The number of shares of common stock beneficially owned by each person or entity is determined in accordance with the applicable rules of the Securities and Exchange Commission and includes voting or investment power with respect to shares of our common stock. The information is not necessarily indicative of beneficial ownership for any other purpose. Shares of our common stock issuable under stock options exercisable on or before May 31, 2012 are deemed beneficially owned for computing the percentage ownership of the person holding the options, but are not deemed outstanding for computing the percentage ownership of any other person. Unless otherwise indicated, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares of common stock, except to the extent authority is shared by spouses under community property laws. Unless otherwise indicated, the address of all directors and executive officers is c/o Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, Massachusetts 02142. The inclusion of any

46


shares deemed beneficially owned in this table does not constitute an admission of beneficial ownership of those shares.

Name and Address of Beneficial Owner
  Total Number
of Shares
Beneficially Owned
  Percentage of
Common Stock
Beneficially Owned(1)
 

Holders of more than 5% of our Common Stock

             

Novartis AG
Lichstrasse 35
CH 4058 Basel, Switzerland

    4,708,679 (2)   9.1 %

Scopia Management Inc.
152 West 57 th  Street, 33 rd  Floor
New York, NY 10019

    4,618,174 (3)   9.0 %

BlackRock, Inc.
40 East 52 nd  Street
New York, NY 10022

    3,757,437 (4)   7.3 %

T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202

    3,537,597 (5)   6.9 %

Directors (which includes all nominees) and Named Executives

             

Craig A. Wheeler

    1,194,498 (6)   2.3 %

John K. Clarke

    208,436 (7)   *  

Bruce L. Downey

    55,814 (8)   *  

Peter Barton Hutt

    149,678 (9)   *  

Thomas P. Koestler

    10,000 (10)   *  

Bennett M. Shapiro

    129,513 (11)   *  

Elizabeth Stoner

    80,393 (12)   *  

Marsha H. Fanucci

    139,313 (13)   *  

James R. Sulat

    73,313 (14)   *  

Richard P. Shea

    339,978 (15)   *  

James M. Roach

    279,364 (16)   *  

Ganesh Venkataraman Kaundinya

    563,215 (17)   1.1 %

Bruce A. Leicher

    229,127 (18)   *  

All Directors and executive officers as a group (14 persons)

    3,646,088 (19)   6.8 %

*
Less than 1% of our outstanding common stock.

(1)
Applicable percentage of ownership for each holder is based on 51,500,109 shares of common stock outstanding on April 1, 2012, plus any common stock equivalents and presently exercisable stock options or warrants held by each such holder, and options or warrants held by each such holder which will become exercisable as of May 31, 2012.

(2)
Information is based on a Schedule 13D filed on August 4, 2006 by Novartis AG ("Novartis") and Novartis Pharma AG ("Novartis Pharma"), as amended by Amendment No. 1 to Schedule 13D filed on September 6, 2006 by Novartis and Novartis Pharma. Novartis Pharma is the record holder of 4,708,679 shares of common stock. Novartis Pharma is a wholly-owned subsidiary of Novartis, and, as a result, Novartis is the beneficial owner of the 4,708,679 shares of common stock held of record by Novartis Pharma. Novartis Pharma and Novartis have shared power to vote and shared power to dispose of such shares.

(3)
Information is based on a Schedule 13G filed by Scopia Management Inc. on February 10, 2012, and is as of December 31, 2011.

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(4)
Information is based on a Schedule 13G/A filed by BlackRock, Inc. on February 20, 2012 and is as of December 30, 2011.

(5)
Information is based on a Schedule 13G filed by T. Rowe Price Associates, Inc. on February 20, 2012, and is as of December 31, 2011. These securities are owned by various individual and institutional investors for which T. Rowe Price Associates, Inc. ("Price Associates") serves as investment advisor with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities. Of the 3,537,597 shares of our common stock deemed beneficially owned, T. Rowe Price Associates, Inc. reports sole voting power as to 864,701 shares and sole dispositive power as to 3,537,597 shares.

(6)
Consists of 564,374 shares of common stock, of which 320,002 shares remain subject to a repurchase right by us pursuant to restricted stock agreements between us and Mr. Wheeler, and 630,124 shares of common stock underlying options exercisable on or before May 31, 2012.

(7)
Consists of 69,123 shares of common stock owned directly by Mr. Clarke and 139,313 shares of common stock underlying options held by Mr. Clarke exercisable on or before May 31, 2012.

(8)
Consists entirely of shares of common stock underlying options exercisable on or before May 31, 2012.

(9)
Consists of 5,365 shares of common stock owned directly by Mr. Hutt and 144,313 shares of common stock underlying options held by Mr. Hutt exercisable on or before May 31, 2012.

(10)
Consists entirely of shares of common stock underlying options exercisable on or before May 31, 2012.

(11)
Consists of 7,000 shares of common stock owned directly by Dr. Shapiro and 122,513 shares of common stock underlying options held by Dr. Shapiro exercisable on or before May 31, 2012.

(12)
Consists of 7,880 shares of common stock owned directly by Dr. Stoner and 72,513 shares of common stock underlying options held by Dr. Stoner exercisable on or before May 31, 2012.

(13)
Consists entirely of shares of common stock underlying options exercisable on or before May 31, 2012.

(14)
Consists of 10,000 shares of common stock owned directly by Mr. Sulat and 63,313 shares of common stock underlying options held by Mr. Sulat exercisable on or before May 31, 2012.

(15)
Consists of 95,885 shares of common stock, of which 65,844 shares remain subject to a repurchase right by us pursuant to restricted stock agreements between us and Mr. Shea, and 244,093 shares of common stock underlying options exercisable on or before May 31, 2012.

(16)
Consists of 79,192 shares of common stock, of which 69,554 shares remain subject to a repurchase right by us pursuant to a restricted stock agreement between us and Dr. Roach, and 200,172 shares of common stock underlying options exercisable on or before May 31, 2012.

(17)
Consists of 411,105 shares of common stock, of which 70,605 shares remain subject to a repurchase right by us pursuant to a restricted stock agreement between us and Dr. Kaundinya, and 152,110 shares of common stock underlying options exercisable on or before May 31, 2012.

(18)
Consists of 102,098 shares of common stock, of which 74,494 shares remain subject to a repurchase right by us pursuant to a restricted stock agreement between us and Mr. Leicher, and 127,029 shares of common stock underlying options exercisable on or before May 31, 2012.

(19)
Consists of an aggregate of 1,464,186 shares of common stock, of which 671,342 shares remain subject to a repurchase right by us pursuant to restricted stock agreements, and 2,189,902 shares of common stock underlying options exercisable on or before May 31, 2012.

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Equity Compensation Plan Information

        The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2011:

Plan Category
  Number of
securities
to be issued upon
exercise of
outstanding options
(a)
  Weighted-average
exercise price of
outstanding options
(b)
  Number of securities
remaining available
future issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
(c)
 

Equity compensation plans approved by security holders(1)(2)

    4,540,267   $ 12.88     5,712,135  

Equity compensation plans not approved by security holders

             
                 

Total

    4,540,267   $ 12.88     5,712,135  
                 

(1)
Includes information regarding the following stockholder-approved equity compensation plans: 2004 Stock Incentive Plan, as amended, 2004 Employee Stock Purchase Plan and Amended and Restated 2002 Stock Incentive Plan.

(2)
Upon the approval of our amended 2004 Stock Incentive Plan, we have not granted further stock options under the Amended and Restated 2002 Stock Incentive Plan.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Compensation Paid to Directors and Executive Officers

        Please see discussion under the heading "Executive Compensation."

Registration Rights

        For information relating to certain registration rights granted by us to a certain stockholder, please see the discussion under the heading "Compensation Committee Interlocks and Insider Participation."


POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS

        Our board of directors has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which we are a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5% stockholders (or their immediate family members), each of whom we refer to as a "related person," has a direct or indirect material interest.

        If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a "related person transaction," the related person must report the proposed related person transaction to our General Counsel. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the audit committee will review, and, in its discretion, may ratify the related person transaction. The policy also permits the chairman of the audit committee to review and, if deemed appropriate, approve proposed related person transactions that arise between committee meetings, subject to ratification by the audit committee at its next meeting. Any related person transactions that are ongoing in nature will be reviewed annually.

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        A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the audit committee after full disclosure of the related person's interest in the transaction. As appropriate for the circumstances, the audit committee will review and consider:

        Our audit committee may approve or ratify the transaction only if the audit committee determines that, under all of the circumstances, the transaction is in our best interests. Our audit committee may impose any conditions on the related person transaction that it deems appropriate.

        In addition to the transactions that are excluded by the instructions to the Securities and Exchange Commission's related person transaction disclosure rule, our board of directors has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:

        The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by our compensation committee in the manner specified in its charter.

        We will disclose the terms of related person transactions in our filings with the Securities and Exchange Commission to the extent required. Other than as described below, since January 1, 2011, we have not been a party to, and we have no plans to be a party to, any transaction or series of similar transactions in which the amount involved exceeded or will exceed $120,000 and in which any executive officer, director, director nominee, holder of more than 5% of our capital stock, or any member of the immediate family of any of the foregoing, had or will have a direct or indirect material interest, other than in connection with the transactions described below.

        Ganesh Venkataraman Kaundinya, the Company's Chief Scientific Officer and Senior Vice President, Research, is an inventor on a number of patents invented while Dr. Kaundinya was at the Massachusetts Institute of Technology, or MIT, prior to Dr. Kaundinya founding and joining the Company. As an inventor on the patents, Dr. Kaundinya is paid a royalty for any licensing fees or

50


other income received by MIT for the patents. In November 2002, the Company licensed a number of patents on which Dr. Kaundinya is one of a number of inventors.

        Until 2011, Dr. Kaundinya received minimal, immaterial royalties related to the patents from annual license fees paid by the Company to MIT. However, in August 2011, Dr. Kaundinya received a royalty of $212,573 for MIT's fiscal year 2011 for patents licensed by Momenta and used in connection with our enoxaparin program. In October 2011, our audit committee ratified and approved the license agreement the Company previously entered into with MIT under our policy taking into consideration the effect of the license agreement on the distribution by MIT to inventors of royalties paid under the license agreement.

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PROPOSAL TWO

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        The audit committee of our board of directors has selected the firm of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2012. Although stockholder approval of the selection of Ernst & Young LLP is not required by law, our board of directors believes that it is advisable to give stockholders an opportunity to ratify this selection. If this proposal is not approved at the Annual Meeting, our audit committee directors will reconsider its appointment of Ernst & Young LLP. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions from our stockholders.

Board Recommendation

         The board of directors recommends a vote FOR the ratification of the selection by the Audit Committee of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2012.

Auditors' Fees

        The following table summarizes the fees of Ernst & Young LLP, our independent registered public accounting firm, billed to us for each of the last two fiscal years.

Fee Category
  2011   2010  

Audit Fees(1)

  $ 398,500   $ 419,000  

Audit-Related Fees(2)

         

Tax Fees(3)

    72,205     38,455  

All Other Fees

         
           

Total Fees

  $ 470,705   $ 457,455  
           

(1)
Audit fees consist of fees for the audit of our financial statements, the audit of our internal control over financial reporting, the review of the interim financial statements included in our quarterly reports on Form 10-Q, and other professional services provided in connection with statutory and regulatory filings or engagements.

(2)
Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under "Audit Fees."

(3)
Tax fees consist of fees for tax compliance, tax advice and tax planning services. All of the tax fees were pre-approved by the audit committee in accordance with the pre-approval policies and procedures described below. Tax compliance services, which relate to Federal and State tax return assistance accounted for $25,000 of the total tax fees billed in 2010 and $27,500 of the total tax fees billed in 2011. Tax advice and tax planning services relate to periodic consultations.

Pre-Approval Policies and Procedures

        Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by our audit

52


committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.

        From time to time, our audit committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.

Report of the Audit Committee

        The audit committee has reviewed our audited consolidated financial statements for the fiscal year ended December 31, 2011 and has discussed these consolidated financial statements with our management and our independent registered public accounting firm. Management is responsible for the preparation of our consolidated financial statements and for maintaining an adequate system of disclosure controls and procedures and internal control over financial reporting for that purpose. Our independent registered public accounting firm is responsible for conducting an independent audit of our annual consolidated financial statements in accordance with generally accepted auditing standards and issuing a report on the results of their audit. The audit committee is responsible for providing independent, objective oversight of these processes.

        The audit committee has also received from, and discussed with, our independent registered public accounting firm various communications that they are required to provide to the audit committee, including the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards , Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

        Our independent registered public accounting firm also provided the audit committee with the written disclosures and letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and our audit committee has discussed with our independent registered public accounting firm their independence.

        Based on the review and discussions referred to above, the audit committee recommended to our board of directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2011 for filing with the Securities and Exchange Commission.

By the Audit Committee of the Board of Directors of Momenta Pharmaceuticals, Inc.:

        Marsha H. Fanucci (Chairwoman)
Bruce L. Downey
John K. Clarke
James R. Sulat

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PROPOSAL THREE

ADVISORY VOTE ON EXECUTIVE COMPENSATION

        The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, enables our stockholders to vote to approve, on a non-binding advisory basis, the compensation of our Named Executives as disclosed in this proxy statement in accordance with applicable SEC rules. This vote, commonly known as a "say-on-pay" proposal, provides stockholders with the opportunity to express their views on our named executives' compensation and is required by Section 14A of the Exchange Act. The vote is not intended to address any specific item of our executive compensation, but rather the overall compensation of our Named Executives and the philosophy, policies and practices described in this proxy statement.

        As described in the section of this proxy statement entitled "Executive Compensation," including "Compensation Discussion and Analysis" and related compensation tables, our executive compensation program is designed to attract, retain, and motivate talented individuals with the executive experience and leadership skills necessary for us to increase stockholder value. We seek to provide executive compensation that is competitive with companies that are similar to us. We also seek to provide near-term and long-term financial incentives that reward executives when strategic corporate objectives designed to increase long-term stockholder value are achieved. We believe that executive compensation should include base salary, cash incentives and equity awards. We also believe that our executive officers' base salaries should be set at approximately median levels relative to comparable companies, and cash and equity incentives should generally be set at levels that give executives the opportunity to achieve above-average total compensation reflecting above-average company performance. In particular, our executive compensation philosophy is to promote long-term value creation for our stockholders by rewarding improvement in selected financial metrics, and by using equity incentives.

        Our board of directors is asking stockholders to vote in favor of the following non-binding resolution:

        RESOLVED, that the compensation paid to our Named Executives, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby approved.

        The say-on-pay vote is advisory, and therefore not binding on us, our board of directors, or the compensation committee of the board of directors. However, our board of directors and compensation committee value the opinions of our stockholders and to the extent there is any significant vote against the Named Executive compensation as disclosed in this proxy statement, we will consider our stockholders' concerns and the compensation committee will evaluate whether any actions are necessary to address those concerns.

Board Recommendation

         The board of directors recommends a vote FOR the approval of the compensation of our named executives as disclosed in this proxy statement.

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STOCKHOLDER PROPOSALS

        In order to be included in proxy material for the 2013 annual meeting of stockholders pursuant to Rule 14a-8 under the Securities and Exchange Act of 1934, as amended, stockholders' proposals must be received by us at our principal executive offices, 675 West Kendall Street, Cambridge, Massachusetts 02142, no later than January 1, 2013. We suggest that proponents submit their proposals by certified mail, return receipt requested, addressed to our Secretary, Bruce A. Leicher, Esq.

        Stockholders who intend to present a proposal at such meeting without inclusion of such proposal in our proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, are required to provide advanced notice of such proposal to us at the aforementioned address not later than March 15, 2013.

        In addition, our by-laws require that we be given advance notice of stockholder nominations for election to the board of directors and of other matters which stockholders wish to present for action at an annual meeting of stockholders, other than matters included in our proxy statement. The required notice must be in writing and received by our Secretary at our principal offices not later than 90 days prior to the first anniversary of the preceding year's annual meeting and not before 120 days prior to the first anniversary of the preceding year's annual meeting. However, if the 2013 annual meeting of stockholders is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the Annual Meeting, notice must be received no earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (1) the 90th day prior to such annual meeting and (2) the 10th day following the date on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever occurs first. Our by-laws also specify requirements relating to the content of the notice that stockholders must provide, including a stockholder nomination for election to the board of directors, to be properly presented at the 2013 annual meeting of stockholders.


HOUSEHOLDING OF ANNUAL MEETING MATERIALS

        Some banks, brokers and other nominee record holders may be participating in the practice of "householding" proxy statements and annual reports. This means that only one copy of our proxy statement and annual report to stockholders may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either document to you upon written request to Momenta Pharmaceuticals, Inc., 675 West Kendall Street, Cambridge, Massachusetts 02142, Attention: Richard P. Shea, Chief Financial Officer and Treasurer, facsimile: (617) 621-0431. If you want to receive separate copies of the proxy statement or annual report to stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address and phone number.


OTHER MATTERS

        Our board of directors is not aware of any matter to be presented for action at the Annual Meeting other than the matters referred to above and does not intend to bring any other matters before the Annual Meeting. However, if other matters should properly come before the Annual Meeting, it is intended that holders of the proxies will vote thereon in their discretion.


GENERAL

        The accompanying proxy is solicited by and on behalf of our board of directors, whose notice of meeting is attached to this proxy statement, and the entire cost of such solicitation will be borne by us.

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        In addition to the use of the mails, proxies may be solicited by personal interview, telephone and telegram by directors, officers and other employees of Momenta who will not be specially compensated for these services. We will also request that brokers, nominees, custodians and other fiduciaries forward soliciting materials to the beneficial owners of shares held of record by such brokers, nominees, custodians and other fiduciaries. We will reimburse such persons for their reasonable expenses in connection therewith.

        Certain information contained in this proxy statement relating to the occupations and security holdings of our directors and officers is based upon information received from the individual directors and officers.

         WE WILL FURNISH, WITHOUT CHARGE, A COPY OF OUR REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2011, INCLUDING CONSOLIDATED FINANCIAL STATEMENTS BUT NOT INCLUDING EXHIBITS, TO EACH OF OUR STOCKHOLDERS OF RECORD ON APRIL 16, 2012, AND TO EACH BENEFICIAL STOCKHOLDER ON THAT DATE UPON WRITTEN REQUEST MADE TO BRUCE A. LEICHER, SECRETARY, MOMENTA PHARMACEUTICALS, INC., 675 WEST KENDALL STREET, CAMBRIDGE, MASSACHUSETTS 02142. A REASONABLE FEE WILL BE CHARGED FOR COPIES OF REQUESTED EXHIBITS.

         PLEASE VOTE YOUR SHARES OVER THE INTERNET OR BY TELEPHONE AS PROVIDED IN THE INSTRUCTIONS SET FORTH ON THE ENCLOSED PROXY CARD, OR COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.

        By Order of the Board of Directors,

GRAPHIC

Craig A. Wheeler

President and Chief Executive Officer

Cambridge, Massachusetts
May 1, 2012

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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. Signature (Joint Owners) Date Date Signature [PLEASE SIGN WITHIN BOX] VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Momenta Pharmaceuticals, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. MOMENTA PHARMACEUTICALS, INC. 675 WEST KENDALL STREET CAMBRIDGE, MA 02142 M46299-P25392 To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. For All For All Except Withhold All MOMENTA PHARMACEUTICALS, INC. The Board of Directors recommends you vote FOR Proposals 1, 2 and 3:1. To elect three members to the Company's board of directors to serve as Class II Directors, each for a term of three years. Nominees: 01) John K. Clarke 02) James R. Sulat 03) Craig A. Wheeler For Against Abstain 2. To ratify the selection by the audit committee of the Company's board of directors of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2012. 3. To vote on a non-binding advisory resolution on the compensation of the Company's named executive officers. NOTE: The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR items 1, 2 and 3. If any other matters properly come before the meeting, or if cumulative voting is required, the person named in the proxy will vote in their discretion. Yes No Please indicate if you plan to attend this meeting. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

 


ANNUAL MEETING OF STOCKHOLDERS OF MOMENTA PHARMACEUTICALS, INC. June 13, 2012 Please date, sign and mail your proxy card in the envelope provided as soon as possible. Dear Stockholder: Please take note of the important information enclosed with this proxy card. There are matters related to the operation of the Company that require your prompt attention. Your vote counts, and you are strongly encouraged to exercise your right to vote the shares. Please mark the boxes on the proxy card to indicate how the shares will be voted. Then sign and date the card, detach it and return your proxy in the enclosed postage-paid envelope. Thank you in advance for your prompt consideration of these matters. Sincerely, Momenta Pharmaceuticals, Inc. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. M46300-P25392 PROXY MOMENTA PHARMACEUTICALS, INC. 675 WEST KENDALL STREET CAMBRIDGE, MASSACHUSETTS 02142 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 13, 2012 The undersigned, revoking all prior proxies, hereby appoints Craig A. Wheeler, Bruce A. Leicher and Richard P. Shea, as proxies, each with the power to appoint his substitute, and hereby authorizes each of them to represent and vote, as designated on the reverse side, all shares of common stock of Momenta Pharmaceuticals, Inc., held of record by the undersigned on April 16, 2012 at the Annual Meeting of Stockholders to be held on June 13, 2012 at 10:30 a.m., local time, at The Cambridge Marriott, Two Cambridge Center, 50 Broadway, Cambridge, Massachusetts 02142 and any adjournments thereof. The undersigned hereby directs Messrs. Wheeler, Leicher and Shea to vote in accordance with their best judgment on any matters which may properly come before the Annual Meeting, all as indicated in the Notice of Annual Meeting, receipt of which is hereby acknowledged, and to act on the matters set forth in such Notice as specified by the undersigned. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3, AND IN THE DISCRETION OF MESSRS. WHEELER, LEICHER AND SHEA, ON ANY OTHER ITEMS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING. ATTENDANCE OF THE UNDERSIGNED AT THE ANNUAL MEETING OR AT ANY ADJOURNMENT THEREOF WILL NOT BE DEEMED TO REVOKE THIS PROXY UNLESS THE UNDERSIGNED REVOKES THIS PROXY IN WRITING. UNLESS VOTING THE SHARES OF OUR COMMON STOCK OVER THE INTERNET OR BY TELEPHONE, PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. Continued and to be signed on reverse side

 

 



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PROPOSAL ONE ELECTION OF DIRECTORS
CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE FOR 2011
2011 GRANTS OF PLAN-BASED AWARDS
OUTSTANDING EQUITY AWARDS AT 2011 YEAR-END
2011 OPTION EXERCISES AND STOCK VESTED
2011 DIRECTOR COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS
PROPOSAL TWO RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL THREE ADVISORY VOTE ON EXECUTIVE COMPENSATION
STOCKHOLDER PROPOSALS
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
OTHER MATTERS
GENERAL