Amylin shareholder plans five nominees, says poison put provisions 'threaten to tilt' playing field

By Susanna Moon

Chicago, March 30 - Amylin Pharmaceuticals, Inc. shareholder Eastbourne Capital Management, LLC said it plans to seek the election of five nominees to Amylin's board of directors.

The shareholder responded to the class action lawsuit in Delaware's Court of Chancery by shareholder San Antonio Fire & Police Pension Fund, seeking to invalidate the so-called poison put provisions in Amylin's credit agreements and to require the company's board to remove the obstacle posed by those provisions to the election of directors nominated separately by Eastbourne and by funds affiliated with Carl Icahn, according to a press release.

Eastbourne owns about 12.5% of Amylin's outstanding shares.

"The company's 'poison puts,' unless they are neutralized, threaten to tilt the electoral playing field in favor of the incumbent board by effectively precluding not merely the election of a new majority on the board ... but, as a practical matter, the election of any shareholder-nominated directors at all," Rick Barry, Eastbourne founder and portfolio manager, said in the release.

These provisions "embedded in voluminous credit agreements and often not otherwise disclosed, deprive shareholders of the substantive right to freely nominate directors," he said.

Amylin director nominees

In separate news, Amylin said its director nominees for election at the 2009 annual meeting include two new independent nominees, Paul N. Clark and Paulo F. Costa.

Clark is former chairman, chief executive officer and president of Icos Corp., and Costa is former president and CEO of Novartis U.S. Corp.

The nominees possess valuable commercial and operational expertise in the biopharmaceutical industry, according to a company press release.

Clark was an operating partner of Genstar Capital since 2007. Prior to joining Genstar, his positions at Icos included director, CEO, president and chairman of the board. Clark also worked in key capacities for Abbott Laboratories, retiring as executive vice president and a board member.

Clark has pharmaceutical commercialization expertise and broad experience in sales, marketing and operational roles with numerous health-care and pharmaceutical companies. He received an MBA from Dartmouth College and his B.S. in Finance from the University of Alabama.

Costa held many roles at Novartis, including president and CEO of Novartis U.S., head of the Americas, and president and CEO of Novartis Pharmaceutical Corp. Prior to joining Novartis, Costa worked at Johnson & Johnson for 30 years, where he was president of Janssen Pharmaceutica, executive vice president, global franchise development, and a member of Johnson & Johnson's group operating committee.

Costa has held various sales and marketing positions and has more than 20 years of general management experience. He has an MBA from Harvard Business School and is a graduate of the Sao Paulo School of Business Administration.

The company also is nominating current directors Adrian Adams, Steven R. Altman, Teresa Beck, Daniel M. Bradbury, Joseph C. Cook Jr., Karin Eastham, James R. Gavin III, Jay S. Skyler, Joseph P. Sullivan and James N. Wilson for re-election.

"We are confident that this is the right slate to represent the interests of all our stockholders and to ensure that Amylin is well-positioned for sustainable long-term success," James N. Wilson, lead independent director of Amylin's board, said in a statement.

Two current directors, Howard E. Greene Jr. and Ginger L. Graham, will not stand for re-election, the company said.

Eastbourne wants 'unfettered' election

On March 9, Eastbourne said the company has accepted provisions in two of its key debt agreements that limit the ability of Amylin shareholders to nominate and elect directors.

Eastbourne said the move "calls into question the fairness of the upcoming election contest, and serves to entrench the incumbent board," according to its March 9 letter to Amylin's board of directors.

Carl Icahn and Eastbourne separately announced plans to each nominate five candidates for election as directors at Amylin's 2009 annual meeting.

Eastbourne asked Amylin's board not to hide "behind the shield of the 'poison puts'" but to instead adopt resolutions and seek necessary waivers to approve the nomination of all duly noticed candidates.

Amylin's poison pill is another obstacle to "an unfettered election process, which compounds the disenfranchising effect of the 'poison puts,'" the letter said.

Eastbourne urged Amylin's board to also waive or amend the provisions of the poison pill by raising the trigger threshold to 25% or otherwise.

As previously reported, Eastbourne said if Amylin does not assemble a slate of directors that includes Eastbourne and Icahn nominees, Eastbourne will take its case directly to the San Diego biopharmaceutical company's shareholders.

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