Momenta Pharmaceuticals (MNTA) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

MOMENTA PHARMACEUTICALS, INC.

301 Binney Street

Cambridge, Massachusetts 02142

April 24, 2020

To Our Stockholders:

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

Thank you for your continued support.

MOMENTA PHARMACEUTICALS, INC.

301 Binney Street

To Our Stockholders:

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

Stockholders of record at the close of business on Monday, April 27, 2020, are entitled to notice of, and to vote at, the Annual Meeting or any postponement, continuation or adjournment thereof. The list of these stockholders will be available on the bottom of your screen during the Annual Meeting after entering the 16-digit control number included on the proxy card that you received, or on the materials provided by your bank or broker. Your vote is important regardless of the number of shares you own.

We hope that all stockholders will be able to attend the Annual Meeting online. 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 online. A postage‑prepaid envelope, addressed to Broadridge Financial Solutions, which is serving as proxy tabulator, has been enclosed for your convenience. Your proxy may be revoked by voting electronically at the Annual Meeting (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Note that, in light of possible disruptions in mail service related to the COVID-19 outbreak, we encourage stockholders to submit their proxy via telephone or online.

April 24, 2020

MOMENTA PHARMACEUTICALS, INC.

301 BINNEY STREET

CAMBRIDGE, MASSACHUSETTS 02142

PROXY STATEMENT

Our 2019 Annual Report to Stockholders for the fiscal year ended December 31, 2019 is being mailed to stockholders with the mailing of these proxy materials on or about May 6, 2020.

Momenta’s Voting Securities

Holders of record of our common stock at the close of business on Monday, April 27, 2020, will be entitled to notice of, and to vote at, the Annual Meeting or any postponement, continuation or adjournment of the Annual Meeting. On April 17, 2020, 117,639,406 shares of our common stock were issued and outstanding. The list of these stockholders will be available on the bottom of your screen during the Annual Meeting after entering the 16-digit control number included on the proxy card that you received, or on the materials provided by your bank or broker. 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.

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 online at the Annual Meeting. A 16‑digit control number that is provided on the enclosed proxy card is needed for voting over the telephone or Internet.

If the shares you own are held in your bank or brokerage firm account in a fiduciary capacity (typically referred to as being held in “street name”), you can vote by following the directions provided to you by your bank or brokerage firm. If the shares you own are held in street name and you wish to vote online at the Annual Meeting, you must obtain your 16-digit control number or otherwise vote through the bank or broker. Please contact the organization that holds your shares for instructions on how to obtain your 16-digit control number or otherwise vote through the broker or other nominee. If you lose your 16-digit control number, you may join the Annual Meeting as a “Guest” but you will not be able to vote, ask questions or access the list of stockholders as of the Record Date.

Your Voting Instructions

The shares represented by all valid proxies will be voted as specified in those proxies. If the shares you own are held in your name and you return a duly executed proxy without specifying how your shares are to be voted, they will be voted as follows in accordance with the recommendations of our board of directors:

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. You should direct your broker how to vote the shares held in your account. Under applicable stock exchange rules, if you do not instruct your broker on how to vote your shares, your broker will be able to vote your shares with respect to certain “routine” matters, but will not be allowed to vote your shares with respect to certain “non‑routine” matters. The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm is a routine matter. Each other proposal to be voted on at the Annual Meeting is a non‑routine matter. A broker “non‑vote” occurs when a broker submits a proxy form but declines to vote on a particular matter because the broker has not received voting instructions from the beneficial owner.

Revoking Your Proxy or Changing Your Vote

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 online. A proxy may be revoked before it is used to cast a vote. If the shares you own are held in your name, you can revoke a proxy by doing one of the following:

Any written notice of revocation or subsequent proxy should be sent to us at the following address: Momenta Pharmaceuticals, Inc., 301 Binney Street, Cambridge, Massachusetts 02142, Attention: Alejandra Carvajal, Secretary.

If the shares you own are held in street name, you will need to follow the directions provided to you by your bank or brokerage firm to change your vote.

Votes Required

The presence online at the Annual Meeting or representation by proxy of the holders of a majority of the shares of common stock of Momenta 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.

The proposal regarding the election of directors requires, for each director nominee, that the votes cast for such nominee exceed the votes cast against such nominee. This means that each of the director nominees for election at our Annual Meeting must receive more “FOR” votes than “AGAINST” votes in order to be elected as a Class I director. The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm, the approval, on an advisory (non‑binding) basis, of the compensation of our named executive officers, and the approval of the amendment and restatement of the Momenta Pharmaceuticals, Inc. 2013 Incentive Award Plan, each require the approval of a majority in voting power of the votes cast affirmatively or negatively by the holders entitled to vote on the proposal. The votes will be counted, tabulated and certified by a representative of Broadridge Financial Solutions, the Company’s inspector of elections for the Annual Meeting.

Counting of Votes

Abstentions and broker non‑votes are included in the shares present or represented at the Annual Meeting for purposes of determining whether a quorum is present. With respect to the election of directors, abstentions and broker non‑votes will not affect the voting results. With respect to the proposal regarding the ratification of the appointment of the Company’s independent registered public accounting firm, abstentions will not affect the voting results. Because brokers have discretionary authority to vote on the ratification of the independent registered public accounting firm, we do not expect

any broker non‑votes in connection with the ratification. With respect to all other proposals to be voted on at the Annual Meeting, abstentions and broker non‑votes will not affect the voting results.

Technical Difficulties or Trouble Accessing the Virtual Meeting Website

Questions and Answers Session During the Annual Meeting

As part of the Annual Meeting, we will hold a live Q&A session, during which we intend to answer questions submitted during the meeting that are pertinent to the Company and the meeting matters, as time permits.

PROPOSAL ONE—

ELECTION OF DIRECTORS

Board Recommendation

The board of directors recommends a vote FOR the election of each of Bruce L. Downey and Georges Gemayel as Class I 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 term expiring on the date of the third annual meeting following the annual meeting at which they are elected. The terms of the three classes are staggered in a manner so that only one class is elected by stockholders annually. Bruce L. Downey and Georges Gemayel are currently serving as Class I directors, and are being nominated by the board of directors for re‑election as Class I directors at the Annual Meeting. As previously disclosed, Mr. Fishman is not standing for re-election at the Annual Meeting. The Class I directors elected this year will serve as members of our board of directors until the 2023 annual meeting of stockholders and until their respective successors are elected and qualified or their earlier death, resignation or removal. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proposal.

In accordance with our corporate governance guidelines, if either of the directors nominated for re‑election at the Annual Meeting fail to receive more votes cast “FOR” his or her re‑election than “AGAINST” his or her re‑election, such director must promptly tender his or her resignation for the board of directors’ consideration. Our nominating and corporate governance committee or a committee of independent directors designated by our board of directors will then make a recommendation to our board of directors to accept or reject the tendered resignation. Our board of directors will have 90 days from the date the election results from our Annual Meeting are certified to notify the resigning director of its decision. Our board of directors may consider all relevant factors in making its decision, including any stated reasons for “AGAINST” votes, whether the underlying cause of the “AGAINST” votes are curable, the length of service and contributions to the Company of the resigning director, and whether the resignation would cause us to fail to comply with any applicable rules or requirements, would lead to a “change of control” as determined pursuant to any financing or other material agreement, or would cause us to default under any material agreements. If the resigning director’s tendered resignation is not accepted or the director does not otherwise submit his resignation, such director will continue to serve on our board of directors until his successor is duly elected and qualified, or his earlier resignation or removal. If the resigning director’s tendered resignation is accepted by our board of directors, then our board of directors, in its sole discretion, may fill any resulting vacancy or decrease the size of the board in accordance with our bylaws.

The persons named in the enclosed proxy card will vote as directed on the proxy card (or through the Internet or telephonic voting) or, if you return a duly executed proxy card without specifying how your shares are to be voted, the persons named in the enclosed proxy card will vote to elect Mr. Downey and Dr. Gemayel as Class I directors. Mr. Downey and Dr. Gemayel currently serve on our board of directors. The nominees have indicated their willingness to continue to serve if elected. However, if either director nominee should be unable to serve, or for good cause will not serve, the shares of common stock represented by proxies may be voted for a substitute nominee designated by our board of directors, or our board of directors may reduce its size. Our board of directors has no reason to believe that either of the nominees will be unable to serve if elected.

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

Our Board of Directors

The biographies of each of our current Class II and Class III directors and the two Class I director nominees, are below. Each of the biographies also highlights specific experience, qualifications, attributes and skills that led our board of directors to conclude that such person 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 of directors.

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 “Director Compensation” and “Security Ownership of Certain Beneficial Owners and Management.”

MOMENTA’S 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 compare them to those suggested by various authorities in corporate governance and the practices of other public companies.

Corporate Governance Guidelines

Our board of directors has adopted corporate governance guidelines to assist our directors in the exercise of their 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, among other things, 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 Jane Barlow, Bruce L. Downey, Corey N. Fishman, Georges Gemayel, Steven C. Gilman, Donna R. Grogan, Jose‑Carlos Gutiérrez‑Ramos, and Elizabeth Stoner 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. The board of directors also determined that, during their respective service as directors, neither of Thomas P. Koestler and James R. Sulat had a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of Messrs. Koestler and Sulat was an “independent” director under applicable Nasdaq rules. Craig A. Wheeler is not an independent director under the Nasdaq rules due to his employment as our chief executive officer and president.

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 and corporate governance. 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 to serve as chairman of the board, particularly as the board’s oversight responsibilities continue to grow. While our by‑laws 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 may nominate an independent director to serve as “Lead Director” who would be approved by a majority of the independent directors.

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, cyber and reputational risks, as well as, more recently, the risk exposures related to the coronavirus (COVID-19) pandemic. The audit committee receives these reports from the appropriate compliance “risk owner” within the Company to enable the audit committee to understand our risk identification, risk management and risk mitigation strategies. The chair of the audit committee reports on these discussions to the full board during each regularly‑scheduled board meeting. Management is actively assessing the impact of the COVID-19 pandemic and reporting to the board on an as needed basis. 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 corporate enterprise risk management as well as the management of risks associated with board organization, membership and structure, succession planning for our directors and executive officers, corporate governance, and potential legal issues that may impact the Company, and also by reviewing the code of business conduct and ethics which creates a foundation for our compliance program. Our board of directors does not believe that its role in the oversight of our risks affects the board’s leadership structure.

Board Meetings and Attendance

Our board of directors met 5 times during the fiscal year ended December 31, 2019, either in person or by teleconference. During 2019, each director, except for Dr. Koestler, attended at least 75% of the aggregate of the total number of board meetings and committee meetings on which she or he then served.

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 2019 annual meeting of stockholders.

Board Committees

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, and, in the case of all members of the compensation committee, the Nasdaq rules specific to the independence of compensation committee members.

The audit committee currently consists of Jane Barlow, Bruce L. Downey, Corey N. Fishman, and Georges Gemayel. Mr. Fishman chairs the audit committee. As noted above, Mr. Fishman is not standing for re-election at the Annual Meeting. Mr. Downey will succeed Mr. Fishman as chair of the audit committee, effective at the conclusion of the Annual Meeting. The audit committee held 8 meetings in 2019. Our audit committee’s responsibilities include:

Our board of directors has determined that each of Jane Barlow, Bruce L. Downey, and Corey N. Fishman is an “audit committee financial expert” as defined by applicable Securities and Exchange Commission rules.

The compensation committee currently consists of Bruce L. Downey, Steven C. Gilman, Donna R. Grogan and Jose‑Carlos Gutiérrez‑Ramos. Dr. Gilman chairs the compensation committee. The compensation committee held 8 meetings in 2019. Our compensation committee’s responsibilities include:

The compensation committee may delegate its authority to one or more subcommittees as it deems appropriate. 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 Jane Barlow, Corey N. Fishman, Georges Gemayel and Elizabeth Stoner. As noted above, Mr. Fishman is not standing for re-election at the Annual Meeting. Dr. Gemayel chairs the nominating and corporate governance committee. The nominating and corporate governance committee held 4 meetings in 2019. Our nominating and corporate governance committee’s responsibilities include:

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 Steven C. Gilman, Donna R. Grogan, Jose‑Carlos Gutiérrez‑Ramos and Elizabeth Stoner. Dr. Stoner chairs the science committee. The science committee held 4 meetings in 2019. Our science committee’s responsibilities include:

Compensation Committee Interlocks and Insider Participation

The compensation committee currently consists of Bruce L. Downey, Steven C. Gilman, Donna R. Grogan and Jose‑Carlos Gutiérrez‑Ramos. Dr. Gilman chairs the compensation committee. No member of our compensation committee is or has been an officer or employee of the Company.

During 2019, 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.

Report of the Audit Committee

The audit committee has reviewed our audited consolidated financial statements for the fiscal year ended December 31, 2019 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 the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission.

Our independent registered public accounting firm also provided the audit committee with the written disclosures and letter required by applicable requirements of the PCAOB 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 its 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, 2019 for filing with the Securities and Exchange Commission.

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 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 adjustments, 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 has retained Radford, which is part of the Rewards Solutions practice at Aon plc, 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 as well as use of a third‑party professional search firm. The committee meets from time to time to evaluate biographical information and background material relating to potential candidates as well as to discuss the results of 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, commitment to understanding our Company and our industry, experience, diligence and the ability to act in the interests of all stockholders. The nominating and corporate governance committee also considers whether a candidate has any conflicts of interest that would impair his or her ability to represent the interests of our stockholders and to fulfill the responsibilities of a director. The criteria further specify that the board should encompass individuals with diverse backgrounds and perspectives. While we do not have a formal policy on diversity, the nominating and corporate governance committee proactively seeks nominees with a broad diversity of viewpoints, backgrounds experiences, expertise and other demographics and characteristics (including gender, age, race and ethnicity) and considers such factors in evaluating prospective nominees, with the objective of recommending a group that it believes can best perpetuate the success of Momenta’s business. 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. The nominating and corporate governance

committee monitors the mix of specific experience, qualifications and skills of its directors in order to assure that the board of directors, as a whole, has the necessary tools to perform its oversight function effectively in light of the Momenta’s business and structure. 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 Alejandra Carvajal, Secretary, Momenta Pharmaceuticals, Inc., 301 Binney 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.

Stockholders also have the right under our by‑laws 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 by‑laws that are described below under the heading “Additional Information-Stockholder Proposals.”

Stockholder Communications

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 (an independent director) or otherwise the chair of the nominating and corporate governance committee, subject to advice and assistance from the general counsel and secretary 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 chairperson 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 the board of directors c/o Alejandra Carvajal, Secretary, Momenta Pharmaceuticals, Inc., 301 Binney Street, Cambridge, Massachusetts 02142, fax: (617) 621‑0431.

Code of Business Conduct and Ethics

Our written code of business conduct and ethics 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. The code is intended to deter wrongdoing and to promote the conduct of all Company business in accordance with high standards of integrity and in compliance with all applicable laws and regulations. The code covers a wide range of professional conduct, including compliance with laws and regulations applicable to the conduct of our business, conflicts of interest, insider trading, the protection of confidential information, honest and ethical fair dealing, acceptance and giving of gifts and gratuities, accuracy of our books and records, concerns regarding accounting matters, dealings with our independent auditor, and reporting and compliance procedures.

Prohibition of Hedging or Pledging the Company’s Securities

Our Board has adopted an Insider Trading Policy that applies to all of the Company’s employees, officers and directors. The policy prohibits our employees, officers and directors, their family members and any entities they control from purchasing financial instruments, such as prepaid variable forward contracts, equity swaps, collars, and exchange funds, or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s equity securities, whether such securities were granted as compensation or are otherwise held, directly or indirectly.

Succession Planning

Our management conducts formal succession planning for our chief executive officer and other executive officers, which is reviewed at least annually by the board of directors under the oversight of the nominating and corporate governance committee.

Our Executive Officers

Pharmatherapeutics at Pfizer Inc., a pharmaceutical company, in the areas of cardiovascular and metabolism, pain, neuroscience, regenerative medicine and rare diseases. From 2007 to 2010, Dr. Arroyo was Therapeutic Area Head for Neurosciences, Discovery Medicine and Clinical Pharmacology at Bristol‑Myers Squibb, a pharmaceutical company, and, from 2004 to 2007, Neurology Global Therapeutic Area Head for Eisai Global Clinical Development, a division of Eisai Co. Ltd., a pharmaceutical company. Dr. Arroyo was an Instructor in Neurology at the Johns Hopkins Hospital in 1994 and Associate Professor of Neurology and Director of the Epilepsy Program at the Medical College of Wisconsin and Senior Specialist at the Hospital Clinic of Barcelona, Spain from 1994 to 2003. Dr. Arroyo received his M.D. from the Autonomous University of Madrid and his Ph.D. from the University of Barcelona, Spain.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The following discussion provides information regarding compensation earned during 2019 by the following executive officers, who are listed below along with their positions as of December 31, 2019:

We refer to these executive officers as our “Named Executives.” In October 2018, we implemented a restructuring (the "Restructuring"), pursuant to which we reduced the Company’s headcount in order to align our workforce with the Company’s new strategy to focus on the discovery and development of novel therapeutics for the treatment of rare immune mediated diseases and to advance our late stage biosimilar products. In addition, effective January 8, 2020, Ms. Robertson resigned as the Company’s Chief Financial Officer, at which time Dr. Kwon, previously our Chief Business Officer, was appointed our Chief Financial and Business Officer.

The objectives of our executive compensation program are to align the interests of management with the interests of stockholders. We correlate compensation to Company and individual performance and design our programs to attract, retain and motivate talented employees. We reward both short‑ and long‑term company and individual performance, with the goal of increasing stockholder value over the long term. In determining executive compensation for 2019, we considered the results of the most recent advisory, non‑binding vote of stockholders on the compensation of the Named Executives, which was approved by 97% of the votes cast at the 2019 annual meeting of stockholders. We also reach out to stockholders from time to time to discuss important issues, including our compensation program, to inform our practices and confirm that they are aligned with our stockholders’ interests.

In 2019, the compensation committee updated:

Our key compensation decisions for 2019 included the following:

Highlights of our compensation practices and policies include:

Our “pay‑for‑performance” philosophy forms the foundation for the compensation committee’s decisions regarding executive compensation. 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:

by offering competitive base salaries, market‑competitive benefits and perquisites, annual incentive cash bonus awards and opportunities for financial growth through our equity incentive programs.

Compensation for employees at all levels, including for our Named Executives, includes base salary, annual incentive cash bonuses, annual equity awards and other benefits. Certain employees, including our Named Executives, are also entitled to specified benefits in connection with a termination of employment or change of control.

The Company’s stock price has been and may continue to be extremely volatile. This volatility is due in part to regulatory, legal and other events and factors whose impact on our business is often unrelated or disproportionately related to our operating performance. The current value of outstanding equity awards can fluctuate considerably over time, falling well above or below the target or reported value of the awards at the time of grant. To help ensure our total compensation program is aligned with performance, our compensation committee regularly reviews the “realizable value” of equity awards in the context of the overall compensation program and continuing performance of the Company.

We believe that the compensation of our Named Executives is appropriate and aligned with the interests of our stockholders. In recent years, we have granted stock options and performance and time-based restricted stock and restricted stock units. A substantial portion of total compensation for our Named Executives has been attributable to stock options, the realizable value of which depends upon an increase in our stock price (and thereby an increase in stockholder value) following the date of grant. We have also granted restricted stock and restricted stock units to our Named Executives subject to performance‑based vesting conditions tied to attaining goals that our compensation committee believes are key to creating value for our stockholders and restricted stock and restricted stock units subject to time‑based vesting conditions which encourages stock ownership by and retention of our Named Executives. In February 2019, our equity awards for Named Executives consisted solely of stock options, in recognition of the grants of time‑based restricted stock units in October 2018 in connection with our Restructuring. In February 2020, we returned to making annual grants of stock options and restricted stock units.

A significant portion of Mr. Wheeler’s compensation is variable, performance‑based compensation that we consider to be “at risk” because it is dependent on the success of our Company. At‑risk compensation includes long‑term equity based awards, the value of which depends on sustained, long‑term increases in the price of our common stock, and annual incentive cash bonuses, which require attaining meaningful performance goals established by our board of directors with the intent of driving short‑term value creation for our stockholders. The following charts and tables highlight the alignment between Mr. Wheeler’s compensation and our Company’s performance.

2019 Pay Mix*

We believe that the design of our compensation program, heavily weighted towards performance‑based vehicles, provides a strong linkage between the level of actual pay delivered and our performance. As the table above demonstrates, 69% of Mr. Wheeler’s 2019 compensation was granted in the form of equity‑based awards which are tied to the future appreciation in value of our stock and 14% of Mr. Wheeler’s 2019 compensation was based on actual performance tied to the achievement of annual targets under our 2019 bonus program. This strong focus on aligning pay and performance is a foundation of our executive compensation philosophy.

The following chart illustrates the alignment over the past five years of Mr. Wheeler’s total compensation (as reported in the Summary Compensation Table) and our total stockholder return (presented on an indexed basis, reflecting the value of $100 invested in our stock on December 31, 2014 as measured based on the closing price of our common stock on the final day of each indicated year).

We maintain a stock ownership and retention program for our executive officers and directors 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 within five years of becoming subject to the guidelines. After such five-year period, such persons will be annually evaluated at a determination date for

compliance with these guidelines and until the applicable minimum share requirement is achieved, each executive officer and director is required to retain all shares of restricted stock and shares of stock received pursuant to restricted stock units upon the lapse of vesting restrictions, net of shares surrendered or sold to pay applicable withholding taxes. In addition, in the event that the applicable minimum share requirement is not achieved as of each determination date, such executive officer or director may not exercise and sell any stock options (other than to sell or surrender shares for payment of any taxes related to stock option exercises), including without limitation any sales pursuant to a 10b5‑1 plan. 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's and director’s satisfaction of the minimum share requirement is measured on at least 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 or would prevent an executive officer or director from complying with a court order. As of March 17, 2020, all but five executive officers and all but five directors met the ownership requirements under the program. The officers and directors who are not in compliance are within the five- year compliance period.

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.

The compensation committee oversees all aspects of our director, officer and other executive compensation policies. Based on the recommendations of the CEO and our Chief Human Resources and Infrastructure Officer regarding each Named Executive’s compensation, except with respect to the CEO’s own compensation, the compensation committee determines the compensation of each of the Named Executives. The chairman of the board and the chair of the compensation committee evaluate the CEO’s performance, utilizing input from the board of directors and from selected executive officers, and make recommendations to the compensation committee, which then determines the CEO’s compensation. The compensation committee also directly engages the services of an independent compensation consultant to assist the committee in evaluating its compensation practices and levels, as described in more detail under the caption “-Role of External Advisors” below.

Our CEO, together with our executive team, contributes to the establishment of annual corporate and business goals against which our annual incentive awards are measured. 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 soliciting “360‑performance reviews” of our Named Executives, which are evaluations submitted by employees who interact with the Named Executives. Each Named Executive also completes a written self‑assessment which is submitted to the CEO. The CEO incorporates the feedback from the 360‑performance reviews, the self‑assessment and the CEO’s own evaluation into formal written evaluations of the Named Executives. Based on the results of this performance review, the CEO then works directly with our Chief Human Resources and Infrastructure Officer to provide comprehensive recommendations for salary changes, individual components of annual incentive cash bonus awards and equity awards for each of our Named Executives other than himself. These recommendations are presented to our compensation committee for review, modification and approval.

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 the CEO’s compensation or performance.

The compensation committee has delegated to our CEO the authority to make stock option grants under our 2013 Incentive Award Plan 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. All other stock options and all grants of restricted stock and restricted stock units are granted by the compensation committee.

To assist the compensation committee in discharging its responsibilities, the compensation committee directly engages its independent compensation consultant, Radford, to evaluate aspects of our compensation practices, provide advice and make recommendations in determining compensation practices and levels, including 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 Radford 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. In early 2019 and early 2020, Radford analyzed the share reserve under our 2013 Incentive Award Plan and projected share usage and updated its reports on director compensation and on executive compensation philosophy, base salary, merit increases and allocation of equity stock grants. In addition, Radford also assisted us in identifying our median employee and determining the ratio of our median employee’s annual total compensation to the annual total compensation of our CEO as described in more detail below under “CEO Pay Ratio.” After review and consultation with Radford, the compensation committee has determined that Radford is independent and there is no conflict of interest resulting from retaining Radford currently or during the year ended December 31, 2019. In reaching these conclusions, the compensation committee considered the factors set forth in Exchange Act Rule 10C‑1 and Nasdaq listing standards.

We maintain a peer group for executive compensation and performance reference purposes. The compensation committee, in consultation with Radford, determines the peer group using benchmarks based on revenue, market capitalization, and number of employees, among other factors, and uses a multi‑year period perspective in determining the peer group.

In selecting our peer group companies for 2019 in March 2018, the compensation committee considered a recommendation provided by Radford, taking into account the anticipated restructuring. In making its recommendations, Radford first identified all publicly traded, U.S.-headquartered companies in the biotechnology/pharmaceutical industry at the Phase 2 development stage with multiple product candidates or a revenue stream. Based on projected company metrics for 2019, Radford next refined the pool to reflect companies with 40 to 330 employees, annual revenue between $15 million and $135 million and a market capitalization between $500 million to $2 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. In addition, the compensation committee also considered our 2018 peer group and Radford's recommendations regarding inclusion of those companies, along with the guidelines used by certain proxy advisory firms in selecting peer companies for us. Based on its analysis and Radford’s recommendations, in March 2018 the compensation committee approved the following 2019 peer group companies:

In addition to using a peer group for executive compensation and performance reference purposes, we also utilize survey data, which has the advantage of including data on executive positions beyond what is available in public filings. In the fall of 2018, we obtained survey data from the Radford survey of the life sciences industry in Massachusetts and nationally. These surveys were utilized in determining the appropriate target level for Company‑wide salary increases for 2019 to assure that our proposed merit salary increases were competitive in the market and the survey data was considered by the compensation committee in determining not to increase our Named Executives’ base salaries in 2019. With respect to the survey data presented to the compensation committee, the identities of the individual companies included in the survey were

not provided to the compensation committee, and the compensation committee did not refer to individual compensation information for such companies.

Our compensation program is designed to reward each Named Executive based upon achievement of a combination of corporate and individual performance objectives. 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 our corporate and business goals.

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

In addition, the compensation committee determines the mix of compensation elements, such as base salary, annual incentive cash bonuses and equity awards, on an individual basis. The compensation committee allocates total compensation between cash and equity compensation based on a number of objective and subjective factors, including the role and responsibilities of the individual executive, and the nature of the behaviors the incentives are intended to motivate. The compensation committee’s philosophy is to balance compensation between long‑term and short‑term compensation, cash and non‑cash compensation, and to take into the account the roles and responsibilities of the individual officer.

October 2018 were determined following consideration of expanded responsibilities of certain Named Executives, promotions of certain Named Executives and the compensation committee’s review of industry trends in base salary increases as discussed in “Use of Competitive Market Compensation Data”. The following table sets forth the 2018 base salaries approved by the compensation committee effective October 5, 2018 and the 2019 base salaries approved by the compensation committee in February 2019:

We use annual incentive cash bonuses to motivate and reward our Named Executives to achieve and exceed specified goals on an annual basis. Annual incentive cash bonuses are determined based on 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. We consider these goals to be difficult to attain, conducive to the creation of stockholder value and designed to contribute to our current and future financial success. The goals we believe will have the greatest impact on stockholder value during the performance period receive the heaviest weighting.

Under our annual incentive cash bonus program, corporate goals are proposed by management, then reviewed and adopted by the compensation committee. Corporate goals are based on metrics or events that we believe will lead to increases in stockholder value over the one‑year performance period. Each corporate goal is assigned a percentage weighting and consists of three achievement milestones that correspond to achievement levels of 75%, 100% and 125%, respectively, of the goal. Achievement milestones for any corporate goal may represent different levels of achievement of the same condition or event, cumulative achievement of similar conditions or events, or may be independent conditions or events that are separately achievable. Our compensation committee retains discretion to set achievement levels for each corporate goal along a continuous range from 50% to 150% of the target level to more accurately reflect, where appropriate, extenuating or mitigating factors, extraordinary circumstances or other considerations relating to the achievement of one or more milestones for each goal or the resulting value of such achievement to stockholders and the Company.

The compensation committee approves an aggregate amount to fund all bonus payments to all employees, which we refer to as the annual bonus pool, based on our achievement of corporate goals. For example, if we were to achieve 70% for each of our corporate goals, the annual bonus pool would be equal to 70% of the aggregate target bonuses for all employees.

The CEO’s annual incentive cash bonus award is determined based entirely upon the achievement of corporate goals. In the case of our other Named Executives, 75% of their annual incentive cash bonus awards is determined based upon the achievement of corporate goals and 25% upon the subjective analysis of their individual performance in relation to the corporate goals as determined by their performance review. The individual performance component of these bonuses is also adjusted by the percentage achievement of corporate goals. The individual performance reviews are presented to our compensation committee along with compensation recommendations. However, the compensation committee makes the final determination of each Named Executive’s individual achievement level subjectively, based on its own analysis of performance and not formulaically by reference to pre‑determined performance objectives.

Target bonuses for 2019 were 80% of base salary for our CEO, and 40% of base salary for our other Named Executives. Each Named Executive’s target bonus remained at the same level as in 2018. The CEO has a maximum bonus opportunity equal to 150% of his base salary, as required by his employment agreement. Our other Named Executives do not have specified maximum bonus opportunities. Bonuses, if any, are determined and paid on an annual basis after completion of the fiscal year in which bonuses are earned. The 2019 corporate goals and their respective weightings were:

In assessing the achievement of these goals, the compensation committee considered the recommendations of our CEO, who, with input from other executive officers, reviewed the Company’s performance against the goals and made recommendations to the board of directors and the compensation committee. The compensation committee also considered assessments and guidance by the science committee relating to the achievement of technical and scientific goals. Given the importance to the Company's new strategic direction of and the success in advancing novel drug programs, the compensation committee used its discretion to increase the achievement level for that goal to 150%. In January 2020, the compensation committee met and determined achievement of the corporate goals was 105%, as set forth in the chart below. The achievement of corporate goals was determined as follows:

Based on the assessment of overall achievement level and the subjective analysis of individual performance, we paid bonuses to our currently serving Named Executives for their performance in 2019 representing the following percentages of base salary and target bonus payment as of December 31, 2019:

Compensation for employees, including our Named Executives, also includes equity awards designed to align the long‑term interests of our employees and our stockholders, to reward the achievement of individual performance goals and to assist in the retention of employees and executives. Prior to 2017, we historically provided annual grants of time‑based stock options and restricted stock to our Named Executives. Beginning in 2017, our compensation committee elected to replace our annual restricted stock awards with awards of restricted stock units. Each restricted stock unit represents the right to receive one share of our common stock or, at the administrator’s discretion, its cash value equivalent shortly following vesting. In February 2018, our equity awards for our CEO were in the standard format from prior years, with half of the grant value in restricted stock units subject to time-based vesting and the balance in stock options. Given the uncertainty resulting from the strategic review of our business initiated in January 2018, the equity awards in February 2018 to our Named Executives other than our CEO consisted solely of restricted stock units subject to time-based vesting conditions to encourage stock ownership and retention of such Named Executives. In October 2018, given the expanded responsibilities and business uncertainties resulting from our Restructuring, coupled with declining stock values, the compensation committee determined to grant additional time-based restricted stock units to our executives, including Named Executives, except for Mr. Wheeler, to enhance our ability to retain our critical executives. In February 2019, our compensation committee determined to award to our Named Executives only stock options given the award of time-based restricted stock units in October 2018. In February 2020, we returned to our historical practice of making annual grants comprised of time-based stock options and restricted stock units to our Named Executives.

We have historically maintained at least one outstanding long‑term performance based equity award for our executives and employees, vesting of which is subject to the achievement of conditions we expect will require several years to attain and will create significant value for our stockholders, such as receipt of approval for a specific product from governmental entities. Consequently, we make performance-based equity grants less frequently than time‑based equity grants. We most recently put in place a new performance-based equity plan for our employees and executives in October 2018 in connection with our Restructuring and all Named Executives, except for Mr. Wheeler, received grants of PSUs under the plan. At such time, the compensation committee determined to defer granting any performance based or time-based equity awards to our CEO, in part to determine how the retention of executives and a financing of the company after our Restructuring proceeded. In December 2018, after the successful completion of our equity financing and evidence of the stabilization of the executive team, the compensation committee determined to make an equity grant to our CEO limited to performance based restricted stock units to further align CEO equity awards with stockholder value.

Aside from the annual equity grant to employees, it has been our policy that equity awards be granted:

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 subject to such option on a quarterly basis thereafter. Our annual option and restricted stock unit awards currently vest as to 25% of the shares on the first anniversary of the date of grant and an additional 6.25% of the shares at the end of each successive three‑month period thereafter. Awards granted to our employees, directors or consultants after June 9, 2015 are generally subject to a minimum one year vesting requirement, subject to certain exceptions set forth in our 2013 Incentive Award Plan.

The compensation committee sets the exercise price of all employee stock options to equal the closing price of our common stock on The Nasdaq Global Select Market on the date of grant.

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 our employee benefit plans, on the same basis as other employees. In order to attract and retain our employees and provide benefits packages aligned with market levels, we provide our Named Executives and other employees the following benefits and perquisites:

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 or for good reason.

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 total compensation package and are consistent with competitive practices. 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.

Tax Considerations

Section 162(m) of the Code 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 certain current or former executive officers. Our compensation committee has not adopted a policy requiring all executive compensation to be fully deductible, but reviews the potential impact of Section 162(m) periodically and 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.

Risk Assessment of Compensation Policies and Programs

We periodically assess our compensation policies and programs for purposes of determining the relationship of such policies and programs to our enterprise risks. This assessment typically occurs in connection with the establishment of corporate goals and annual incentive programs for our employees. We do not believe that our compensation policies or programs create risks that are reasonably likely to have a material adverse effect on us.

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.:

Summary Compensation Table for 2019

Outstanding Equity Awards at 2019 Year-End

2019 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, 2019.

Employment, Severance and Change of Control Arrangements

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.

Pursuant to his employment agreement, Mr. Wheeler receives an annual base salary determined by the compensation committee, which is $780,000 for 2020. Mr. Wheeler is also eligible to receive bonuses of up to 150% of his base salary for the applicable fiscal year. Details of Mr. Wheeler’s 2019 cash bonus are described above under the caption “Elements of Compensation-Annual Incentive Cash Bonus.” Mr. Wheeler is also entitled to specified benefits, including: participation in our sponsored benefit programs; reimbursement for life and disability insurance premium expenses up to $5,000 per year and related tax gross‑up payments; and reimbursement of tax and financial advisor fees incurred by Mr. Wheeler, up to $5,000 per year, during the period of his employment.

Under Mr. Wheeler’s employment agreement, Mr. Wheeler or Momenta may terminate Mr. Wheeler’s 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 of control, we have agreed to pay Mr. Wheeler a lump sum equal to:

Additionally, Mr. Wheeler and his dependents will continue to receive benefits under the Company’s medical and dental plans, or will receive comparable benefits, at subsidized rates to the same extent as active employees, for a maximum of 12 months following such termination subject to his re‑employment with comparable benefits. In addition, any time‑based equity awards that would have vested if Mr. Wheeler had remained employed for an additional 12 months and 25% of any unvested performance‑based equity awards will fully and immediately vest.

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 and his dependents will continue to receive benefits under the Company’s medical and dental plans, or will receive comparable benefits for 24 months (or a maximum of 36 months if the purchase price of the transaction equals or exceeds $1.1 billion) following such termination at subsidized rates to the same extent as active employees subject to his re‑employment with comparable benefits. In addition, Mr. Wheeler is entitled to reimbursement for excise taxes due under Section 4999 of the Code (as well as income and employment taxes due on the reimbursement payment) following a change of control and, if terminated as described above after a change of control, the unvested portions of all stock‑based awards shall fully and immediately vest.

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 and the transfer of ownership rights to intellectual property developed by Mr. Wheeler to us and a 12‑month non‑compete provision.

We have also entered into executive employment agreements, as amended, or the Executive Employment Agreements, with Michelle Robertson, Santiago Arroyo, Young Kwon and Anthony Manning. In June 2017, the Executive Employment Agreements with each of Drs. Arroyo, Kwon and Manning were amended to explicitly provide that the Named Executive’s rights thereunder to accelerated vesting of restricted stock in connection with certain employment terminations apply equally, as intended, to awards of restricted stock units. The Executive Employment Agreements with each of Ms. Robertson and Drs. Arroyo, Kwon and Manning provide for certain severance payments and benefits upon a qualifying termination, as described below, both during and outside of a change in control period.

Pursuant to the Executive Employment Agreements, we have agreed to pay Ms. Robertson and Drs. Arroyo, Kwon and Manning annual base salaries as determined by the compensation committee. If our board of directors approves an annual bonus, each of them will be eligible for a discretionary bonus award. The annual target for each executive’s bonus is currently 40% 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 the Company on the date such bonus is paid.

Each executive is 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.

The Executive Employment Agreements with each of Ms. Robertson and Drs. Arroyo, Kwon and Manning specify that 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 will 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 will not be eligible for any severance or separation payments or any continuation of

benefits (other than those provided for under COBRA), or any other compensation pursuant to the Executive Employment Agreement or otherwise. The executive will also have such rights, if any, with respect to outstanding stock options and restricted stock grants as may be provided under each applicable award agreement.

Pursuant to the Executive Employment Agreements with each of Ms. Robertson and Drs. Arroyo, Kwon and Manning, if the executive’s employment with us is terminated by us without cause, or by the executive’s voluntary resignation for good reason, other than in connection with a change of control (as defined in each Executive Employment Agreement), then the executive will be paid all accrued and unpaid base salary and any accrued but unused vacation through the date of termination. In addition, the executive will be eligible to receive the following separation benefits:

Pursuant to their employment agreements, Drs. Arroyo, Kwon and Manning are also eligible to receive the payments and benefits described above in the event of a termination due to death or disability, and on any qualifying termination, are also eligible to receive life insurance, accident and disability benefits as in effect immediately prior to the termination date for a period of 12 months.

If the executive’s employment with the Company is terminated without cause or if the executive terminates his employment with good reason, in each case, (i) within one year following a change of control (as defined in each Executive Employment Agreement) or (ii) prior to a change in control where it is demonstrated that the termination occurred in connection with the change in control (which in the case of Ms. Robertson, must occur within 90 days prior to the change in control), the executive will be entitled to all accrued and unpaid base salary and any accrued but unused vacation through the date of termination. In addition, the executive will be eligible to receive the following separation benefits:

Pursuant to their employment agreements, in the event of a termination described above, Drs. Arroyo, Kwon and Manning are also eligible to receive life insurance, accident and disability benefits as in effect immediately prior to the termination date for a period of 12 months.

Each of the executives 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.

The restricted stock units granted to our Named Executives other than Mr. Wheeler in February 2018 (the “February 2018 RSUs”) and the PSUs granted in 2018 (the “2018 PSUs”) are subject to accelerated vesting in the event of certain terminations. The February 2018 RSUs vest in full in the event the Named Executive’s employment with us is terminated without “cause” or the Named Executive resigns for “good reason” (as such terms are defined in the Named Executive’s employment agreement). The Retirement Policy does not apply to the February 2018 RSUs. The 2018 PSUs will vest as to 150% of the target number of PSUs in the event the Named Executive is terminated without “cause” (as defined in the award agreement) on or after the first anniversary of the grant date and within 12 months following a change in control.

Potential Termination and Change of Control Payments

The following table summarizes the potential payments, benefits and acceleration of vesting applicable to stock options, restricted stock and restricted stock unit awards under our employment agreement with Mr. Wheeler. The amounts shown below assume that the termination of Mr. Wheeler was effective as of December 31, 2019. Actual amounts payable to Mr. Wheeler upon his termination can only be determined definitively at the time of his actual departure.

In addition, if Mr. Wheeler had retired on December 31, 2019, the value of the benefits received under the Retirement Policy, calculated by multiplying the number of shares subject to the portion of Mr. Wheeler’s stock options and restricted stock units that would have vested during the 12 months following his retirement by (i) for stock options, the excess, if any, of the closing price of our common stock on December 31, 2019, which was $19.73, over the applicable per share option exercise price, or (ii) for restricted stock units, $19.73, would have been $2,720,714.

The following table summarizes the potential payments, benefits and acceleration of vesting applicable to stock options, restricted stock and restricted stock unit awards under our Executive Employment Agreements with each of Ms. Robertson and Drs. Arroyo, Kwon and Manning. The amounts shown below assume that the termination of each executive was effective as of December 31, 2019.

Actual amounts payable to each Named Executive listed below upon his or her termination can only be determined definitively at the time of each Named Executive’s actual departure.

CEO Pay Ratio

As required by Section 953(b) of the Dodd‑Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S‑K, we are providing the following information regarding the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Wheeler, our CEO.

During 2019, we engaged Radford to assist us in identifying our median employee and determining the ratio of our median employee’s annual total compensation to the annual total compensation of our CEO as required under Item 402(u) of Regulation S‑K. With the assistance of Radford, we identified the median employee from among those employees who were employed by us on December 31, 2019 (excluding our CEO) based on a consistently applied compensation measure comprised of annual base salaries as of that date, target bonus for 2019, and the grant date fair value of equity awards granted in 2019 determined in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures). We included all employees, whether employed on a full‑time, part‑time or seasonal basis, as of December 31, 2019, which yielded a total employee population of approximately 115 individuals, all of whom were located in the United States. We did not make any cost‑of‑living or other adjustments to employee compensation and did not annualize the compensation of any employees who were employed for less than the full year.

After identifying the median employee as described above, we calculated the 2019 annual total compensation for such employee using the same methodology we used for our Named Executives as set forth in the Summary Compensation Table for 2019.

For 2019, the combined annual total compensation for our CEO was $4,618,463, and for our median employee was $210,742, resulting in an estimated pay ratio of 22:1. The annual total compensation for our CEO in the pay ratio disclosure differs from the total compensation reflected in the Summary Compensation Table for 2019 because we included the value of company paid health and welfare benefits, estimated at $30,000.

We consider the pay ratio reported above to be a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S‑K based on our internal records and the methodology described above. The rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions.

DIRECTOR COMPENSATION

Non‑employee director compensation is set by our board of directors at the recommendation of the compensation committee. Our 2019 compensation for non‑employee directors consisted of:

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 and the aggregate grant date fair value of option awards granted to our non‑employee directors for the year ended December 31, 2019:

(6)    Mr. Sulat retired from the board of directors effective July 22, 2019.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our common stock as of April 17, 2020, 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 June 16, 2020, 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., 301 Binney Street, Cambridge, Massachusetts 02142. The inclusion of any shares deemed beneficially owned in this table does not constitute an admission of beneficial ownership of those shares.

Delinquent Section 16(a) Reports

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2019:

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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 Chief Legal Officer. 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 chair 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.

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, among others, 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. Since January 1, 2019, except for transactions and agreements described in our other filings with the Securities and Exchange Commission, 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.

PROPOSAL TWO—

RATIFICATION OF APPOINTMENT 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, 2020. Although stockholder ratification of the appointment 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 appointment. If this proposal is not approved at the Annual Meeting, our audit committee 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 appointment by the Audit Committee of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2020.

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.

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 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. During

2019, no services were provided to us by Ernst & Young LLP other than in accordance with the pre‑approval policies and procedures described above.

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. Since 2011, we have held a non‑binding, advisory vote on the compensation of our Named Executives annually. At our 2017 annual meeting, our stockholders voted, on an advisory basis, to hold advisory votes on executive compensation every year and we have determined to hold a non‑binding, advisory vote on the compensation of our Named Executives annually. The next such non‑binding, advisory vote will occur at the 2021 annual meeting of stockholders.

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.

We are asking stockholders to vote to approve, on a non‑binding advisory basis, following 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.

PROPOSAL FOUR—

APPROVAL OF AMENDMENT AND RESTATEMENT OF MOMENTA PHARMACEUTICALS, INC.

2013 INCENTIVE AWARD PLAN

Overview

In this proposal, we are requesting stockholders approve the amendment and restatement of the Momenta Pharmaceuticals, Inc. 2013 Incentive Award Plan, or the 2013 Plan, to increase the number of shares of common stock available for issuance under the 2013 Plan by 7,000,000 shares. The board of directors approved the amendment and restatement of the 2013 Plan on April 1, 2020, subject to and effective upon stockholder approval. The 2013 Plan, as amended and restated if this proposal is approved, is described in more detail below. If this proposal is not approved by our stockholders, the amendment and restatement of the 2013 Plan will not become effective, but the 2013 Plan will remain in effect in accordance with its present terms.

Board Recommendation

The board of directors recommends a vote FOR the approval of the amendment and restatement of the Momenta Pharmaceuticals, Inc. 2013 Incentive Award Plan.

Stockholder Approval Requirement

In general, stockholder approval of the amendment and restatement of the 2013 Plan will increase the number of shares available for issuance under the 2013 Plan while (1) complying with the terms of the 2013 Plan as currently in effect regarding amendments, (2) meeting the stockholder approval requirements of the principal securities market on which shares of our common stock are traded, (3) preserving our ability to grant stock options under the 2013 Plan that are intended to qualify as incentive stock options, or ISOs, as defined under Section 422 of the Code, and (4) extending the term of the 2013 Plan until April 1, 2030.

Amendment and Restatement of the 2013 Plan

On April 1, 2020, the board of directors approved an amendment and restatement of the 2013 Plan to increase the shares of common stock available for grant under the 2013 Plan by 7,000,000 shares, subject to and effective upon approval of the amendment and restatement by our stockholders. The purpose of the amendment and restatement is to permit the Company to continue using the 2013 Plan to achieve the Company’s performance, recruiting, retention and incentive goals.

We believe that continued use of the 2013 Plan is essential to our success. Equity awards are intended to motivate high levels of performance, align the interests of our directors, employees and consultants with those of our stockholders by giving directors, employees and consultants the perspective of an owner with an equity stake in the Company and providing a means of recognizing their contributions to the success of the Company. The board of directors and management believe that equity awards are necessary to remain competitive in our industry and are essential to recruiting and retaining the highly qualified employees who help the Company meet its goals.

The total number of shares reserved for issuance under the 2013 Plan before giving effect to the amendment and restatement equals the sum of: (a) 21,200,000, (b) one share for each share subject to a stock option that was granted through December 31, 2012 under our 2004 Stock Incentive Plan or our Amended and Restated 2002 Stock Incentive Plan, which we refer to together as the Prior Plans, that subsequently expires, is forfeited or is settled in cash (up to a maximum of 4,337,882 shares) and (c) (i) 1.35 shares for each share subject to an award other than a stock option that was granted through December 31, 2012 under the Prior Plans and that subsequently expired, was forfeited, was settled in cash or repurchased, in each case, prior to June 9, 2015 and (ii) 1.67 shares for each share subject to an award other than a stock option that was granted through December 31, 2012 under the Prior Plans and that subsequently expires, is forfeited, is settled in cash or repurchased, in each case, on or after June 9, 2015 (up to a maximum of 950,954 shares). Set forth below is the number of shares available for issuance pursuant to outstanding equity awards under the 2013 Plan and the Prior Plans and future equity awards under the 2013 Plan as of March 12, 2020:

For additional information regarding equity awards outstanding and available for future grants as of December 31, 2019, see “Equity Compensation Plan Information.”

If this proposal is approved, an additional 7,000,000 shares will become available for issuance under the 2013 Plan. If the amendment and restatement is not approved, the 2013 Plan will remain in effect in accordance with its present terms.

Considerations Relating to the Additional Shares Under the 2013 Plan

In recommending the amendment and restatement of the 2013 Plan to the board of directors for approval, the compensation committee reviewed employee and compensation data from the Company and analyses prepared by Radford, the committee’s independent compensation consultant. Considerations taken into account by the compensation committee included the following:

In consideration of these factors, and our belief that the ability to continue granting competitive equity compensation is vital to our ability to attract, retain and motivate employees, we believe that the amendment and restatement of the 2013 Plan and the size of the share reserve under the 2013 Plan after giving effect to the amendment and restatement are reasonable, appropriate and in the best interests of the Company at this time.

Other Amendments to the 2013 Plan

The amendment and restatement of the 2013 Plan also extends the expiration date of the 2013 Plan to April 1, 2030.

Benefits of the 2013 Plan

We depend on the performance and commitment of our employees to succeed. The use of equity‑based long‑term incentives assists us in attracting, retaining, motivating and rewarding talented employees. Providing equity grants creates long‑term participation in the Company and aligns the interests of our employees with the interests of our stockholders. The use of equity awards as compensation also allows the Company to conserve cash resources for other important purposes.

The 2013 Plan provides the compensation committee with the flexibility to effectively use the shares under the 2013 Plan to provide incentives to our personnel. The 2013 Plan contains provisions we believe are consistent with best practices in equity compensation and which we believe further protect our stockholders’ interests, including:

Summary of the Amended and Restated 2013 Plan

If (1) any award under the 2013 Plan is forfeited or expires or is settled in cash (in whole or in part) or (2) any award granted under the Prior Plans on or prior to December 31, 2012 is forfeited or expires or is settled for cash (in whole or in part), the shares subject to such award shall, to the extent of such forfeiture, expiration or cash settlement, be used for new grants under the 2013 Plan. In addition, any shares repurchased by us at the same or lower price paid by the participant so that such shares are returned to the Company may be used again for new grants under the 2013 Plan. Any shares that become available for grant pursuant to the foregoing will be added back as (1) one share for each share subject to a stock option or stock appreciation right and (2) (a) 1.35 shares for each share subject to an award other than an option or stock appreciation right granted under the 2013 Plan prior to June 9, 2015 or granted under a Prior Plan and forfeited, expired or settled in cash prior to June 9, 2015 and (b) 1.67 shares for each share subject to an award other than an option or stock appreciation right granted under the 2013 Plan on or after June 9, 2015 or granted under a Prior Plan and forfeited, expired or settled in cash on or after June 9, 2015.

Notwithstanding the foregoing, the following shares will not be added to the shares authorized for grant under the 2013 Plan: (1) any shares tendered or withheld to satisfy the exercise price of an option, (2) any shares tendered or withheld to satisfy any tax withholding obligation with respect to an award, (3) any shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right on its exercise, and (4) any shares purchased on the open market with the cash proceeds from the exercise of options.

To the extent permitted by applicable law or any exchange rule, and subject to certain other restrictions, shares issued in assumption of, or in substitution for, any outstanding awards or shares available under a pre‑existing plan of an entity acquired by the Company or any of its subsidiaries that was approved by stockholders and not adopted in contemplation of such acquisition will not be counted against the shares available for grant under the 2013 Plan.

The Administrator has the authority, in its discretion, to select employees, consultants and directors to whom awards may be granted from time to time, to determine whether and to what extent awards are granted, to determine the number of shares or the amount of other consideration to be covered by each award (subject to the limitations set forth below), to

approve award agreements for use under the 2013 Plan, to determine the terms and conditions of any award (including the vesting schedule applicable to the award), to amend the terms of any outstanding award granted under the 2013 Plan (subject to the limitations described above), to construe and interpret the terms of the 2013 Plan and awards granted, to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non‑U.S. jurisdictions, and to take such other action not inconsistent with the terms of the 2013 Plan, as the Administrator deems appropriate.

Payment pursuant to the stock appreciation right awards may be in cash, shares, or a combination of both, as determined by the Administrator. Generally, a stock appreciation right may be exercised only while such person remains an employee or non‑employee director of us or one of our subsidiaries or affiliates or for a specified period of time (up to the remainder of the award term) following the holder’s termination of service with us or one of our subsidiaries or affiliates.

The compensation committee may provide that adjustments will be made for purposes of determining the achievement of one or more of the performance goals established for an award. Any such adjustments may be based on, but are not limited to, one or more of the following: (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non‑operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by us during the performance period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under applicable accounting standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the performance period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments; (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of our core, on‑going business activities; (xiv) items related to acquired, in‑process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; or (xvix) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions.

Federal Income Tax Consequences

The following is a general summary as of this date of the federal income tax consequences to us and to U.S. participants for awards granted under the 2013 Plan. The federal tax laws may change and the federal, state and local tax consequences for any participant will depend upon his or her individual circumstances. Tax consequences for any particular

individual may be different. This summary does not purport to be complete, and does not discuss state, local or non‑U.S. tax consequences.

A non‑qualified stock option can be considered non‑qualified deferred compensation and subject to Section 409A of the Code. A non‑qualified stock option that does not meet the requirements of Code Section 409A can result in the acceleration of income recognition and an additional 20% tax obligation plus penalties and interest.

If the participant fails to satisfy either of the foregoing holding periods (referred to as a “disqualifying disposition”), he or she must recognize ordinary income in the year of the disposition. The amount of ordinary income generally is the lesser of (i) the difference between the amount realized on the disposition and the exercise price or (ii) the difference between the fair market value of the stock at the time of exercise and the exercise price. Any gain in excess of the amount taxed as ordinary income will be treated as a long or short‑term capital gain, depending on whether the stock was held for more than one year. The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary income recognized by the participant, subject to possible limitations imposed by Section 162(m) of the Code and so long as the participant’s total compensation is deemed reasonable in amount.

The “spread” under an incentive stock option-i.e., the difference between the fair market value of the shares at exercise and the exercise price-is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax. If a participant’s alternative minimum tax liability exceeds such participant’s regular income tax liability, the participant will owe the larger amount of taxes. In order to avoid the application of alternative minimum tax with respect to incentive stock options, the participant must sell the shares within the calendar year in which the incentive stock options are exercised. However, such a sale of shares within the year of exercise will constitute a disqualifying disposition, as described above.

A SAR also can be considered non‑qualified deferred compensation and subject to Section 409A of the Code. A SAR that does not meet the requirements of Code Section 409A can result in the acceleration of income recognition and an additional 20% tax obligation plus penalties and interest.

The recipient may accelerate his or her recognition of ordinary income, if any, and begin his or her capital gains holding period by timely filing (i.e., within 30 days of the award) an election pursuant to Section 83(b) of the Code. In such event, the ordinary income recognized, if any, is measured as the difference between the amount paid for the stock, if any, and the fair market value of the stock on the date of award, and the capital gain holding period commences on such date. The ordinary income recognized by a recipient that is an employee or former employee will be subject to tax withholding by the Company.

Restricted stock units also can be considered non‑qualified deferred compensation and subject to Section 409A of the Code. A grant of restricted stock units that does not meet the requirements of Code Section 409A results in the acceleration of income recognition and an additional 20% tax obligation plus penalties and interest.

In general, under Section 162(m) of the Code, income tax deductions of publicly‑held corporations may be limited to the extent total compensation (including base salary, annual bonus, stock option exercises and non‑qualified benefits paid) for certain current or former executive officers exceeds $1 million (less the amount of any “excess parachute payments” as defined in Section 280G of the Code) in any one year.

Plan Benefits

If the amendment and restatement of the 2013 Plan is approved by our stockholders, the number of shares of our common stock authorized for issuance under the 2013 Plan will increase by 7,000,000 shares. Awards under the 2013 Plan are subject to the discretion of the Administrator and, except with respect to grants to certain non‑employee directors pursuant to our non‑employee director compensation policy, unless such policy is amended, no determinations have been made by the Administrator as to any future awards that may be granted pursuant to the 2013 Plan. For additional information regarding our non‑employee director compensation policy, see “Executive Compensation-Director Compensation.” Therefore, it is not possible to determine the benefits that will be received in the future by participants in the 2013 Plan. However, our directors and executive officers are eligible to receive awards under the 2013 Plan and could benefit from the grant of equity‑based awards under the 2013 Plan.