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Millennium Pharmaceuticals Inc – ‘DEF 14A’ for 5/7/04

On:  Wednesday, 3/24/04, at 9:49am ET   ·   Effective:  3/24/04   ·   For:  5/7/04   ·   Accession #:  1047469-4-9118   ·   File #:  0-28494

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/24/04  Millennium Pharmaceuticals Inc    DEF 14A     5/07/04    1:318K                                   Merrill Corp/New/FA

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 1: DEF 14A     Definitive Proxy Solicitation Material              HTML    274K 

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

		Millennium Pharmaceuticals, Inc. 40 Landsdowne Street Cambridge, Massachusetts 02139 617.679.7000 www.millennium.com

March 25, 2004

To our stockholders:

I invite you to our 2004 annual meeting of stockholders. The meeting is on Friday, May 7, 2004 at 10:00 a.m., EDT, at the Boston Marriott Cambridge, 2 Cambridge Center, Cambridge, Massachusetts 02142. For your convenience, we are also offering a webcast of the meeting. If you choose to listen to the webcast, go to http://www.millennium.com/investors shortly before the meeting time and follow the instructions. If you miss the meeting, you can listen to a replay of the webcast on that site until June 7, 2004. The annual meeting is a terrific opportunity to learn more about our business and operations. I hope you will join us or listen to the webcast.

On the pages after this letter you will find the notice of our 2004 annual meeting of stockholders, which lists the matters to be considered at the meeting, and the proxy statement, which describes the matters listed in the notice. We have also enclosed your proxy card and our annual report for the year ended December 31, 2003.

Your vote at this meeting is important. Whether or not you plan to attend the meeting, I hope you will vote as soon as possible. If you are a stockholder of record, you may vote over the Internet, by telephone, or by mailing the enclosed proxy card in the envelope provided. You will find voting instructions in the proxy statement and on the enclosed proxy card. If your shares are held in "street name"—that is, held for your account by a broker or other nominee—you will receive instructions from the holder of record that you must follow to vote your shares.

Thank you for your ongoing support and continued interest in Millennium.

Sincerely,

MARK J. LEVIN
Chairperson, President and Chief Executive Officer

MILLENNIUM PHARMACEUTICALS, INC.
40 Landsdowne Street
Cambridge, Massachusetts 02139

On behalf of the Millennium Board of Directors,

JOHN B. DOUGLAS III, Secretary

March 25, 2004

TABLE OF CONTENTS

i

MILLENNIUM PHARMACEUTICALS, INC.
40 Landsdowne Street
Cambridge, Massachusetts 02139

PROXY STATEMENT—2004 ANNUAL MEETING OF STOCKHOLDERS

This proxy statement contains information about the 2004 annual meeting of stockholders of Millennium Pharmaceuticals, Inc., including any postponements or adjournments of the meeting. The meeting will be held at the Boston Marriott Cambridge, 2 Cambridge Center, Cambridge, Massachusetts 02142, on Friday, May 7, 2004 at 10:00 a.m., EDT.

In this proxy statement, we refer to Millennium Pharmaceuticals, Inc. as "Millennium," "we," "us" or the "Company."

We are sending you this proxy statement in connection with the solicitation of proxies by our Board of Directors.

Our annual report for the year ended December 31, 2003 was first mailed to stockholders, along with these proxy materials, on or about March 25, 2004.

Our annual report on Form 10-K for the year ended December 31, 2003 is available over the Internet at our website, http://www.millennium.com/investors, or through the SEC's electronic data system called EDGAR at http://www.sec.gov. To request a printed copy of our Form 10-K, which we will provide to you without charge, either: write to Investor Relations, Millennium Pharmaceuticals, Inc., 40 Landsdowne Street, Cambridge, Massachusetts 02139, or e-mail Investor Relations at "info@mlnm.com."

VOTING PROCEDURES

YOUR VOTE IS IMPORTANT. PLEASE TAKE THE TIME TO VOTE AS SOON AS POSSIBLE:

•

OVER THE INTERNET,

•

BY TELEPHONE OR

•

BY MAIL.

2

3

The Board, upon recommendation of the Nominating and Board Governance Committee, has nominated the three people listed below for election as Class II Directors. Each nominee currently serves as a Class II Director. The Board of Directors recommends a vote FOR the nominees named below.

Our Board of Directors is divided into three classes. One class is elected each year and members of each class hold office for three-year terms. The Board of Directors currently consists of twelve directors. Four are Class I Directors (with terms expiring at the 2006 annual meeting), four are Class II Directors (with terms expiring at the 2004 annual meeting) and four are Class III Directors (with terms expiring at the 2005 annual meeting). Dr. Eugene Cordes, who currently serves as a Class II director has decided not to stand for reelection.

The persons named in the enclosed proxy will vote to elect as Class II directors Charles J. Homcy, Raju S. Kucherlapati and Eric S. Lander, the three nominees listed below, unless you indicate on the proxy that your vote should be withheld from any or all of these nominees. If they are elected, Dr. Kucherlapati, Dr. Homcy and Dr. Lander will hold office until the 2007 annual meeting of stockholders and until their successors are duly elected and qualified. All of the nominees have indicated their willingness to serve, if elected, but if any of them should be unable or unwilling to serve, proxies may be voted for a substitute nominee designated by the Board of Directors, unless the Board chooses to reduce the number of directors serving on the Board.

4

There are no family relationships between or among any of our executive officers or directors.

Below are the names and certain information about each member of the Board of Directors, including the nominees for election as Class II directors.

5

6

7

8

OWNERSHIP OF OUR COMMON STOCK

Ownership By Management

On March 10, 2004 Millennium had 304,056,971 shares of common stock issued and outstanding. This table shows certain information about the beneficial ownership of Millennium common stock, as of that date, by:

•

each of our current directors;



•

each nominee for director;



•

our Chief Executive Officer;



•

each of our four other most highly compensated executive officers named in the Summary Compensation Table; and



•

all of our current directors and executive officers as a group.

According to SEC rules, we have included in the column "Number of Issued Shares" all shares over which the person has sole or shared voting or investment power, and we have included in the column "Number of Shares Issuable" all shares that the person has the right to acquire within 60 days after March 10, 2004 through the exercise of any stock option or other right. All shares that a person has a right to acquire within 60 days of March 10, 2004 are deemed outstanding for the purpose of computing the percentage beneficially owned by the person, but are not deemed outstanding for the purpose of computing the percentage beneficially owned by any other person.

Unless otherwise indicated, each person has the sole power (or shares the power with a spouse) to invest and vote the shares listed opposite the person's name. Where applicable, ownership is subject to community property laws. Our inclusion of shares in this table as beneficially owned is not an admission of beneficial ownership of those shares by the person listed in the table.

*

Less than one percent.

(1)

Includes shares contributed by Millennium to our 401(k) plan for the benefit of the named executive officer as of December 31, 2003 as follows: Mr. Levin, 4,090 shares; Mr. Kailian, 1,146 shares;

9

Mr. Bate, 777 shares; Ms. Pine, 3,957 shares; Dr. Tepper, 3,667 shares and all directors and executive officers as a group, 13,637 shares.

(2)

Shares that can be acquired through stock option exercises through May 9, 2004.

(3)

Includes 1,000 shares held by a custodian under the Uniform Gifts to Minors Act for Dr. Kucherlapati's son. Dr. Kucherlapati disclaims beneficial ownership of these shares.

(4)

Includes 10,000 shares held by the Lander Family Charitable Trust. Dr. Lander disclaims beneficial ownership of these shares.

(5)

Includes 1,010 shares held by trusts for each of Mr. Selby's two sons. Mr. Selby disclaims beneficial ownership of these shares.

(6)

Includes 333 shares held by a custodian under the Uniform Gifts to Minors Act for each of Dr. Tepper's two sons and 5,416 shares held by The Tepper Family Irrevocable Trust 2002. Dr. Tepper disclaims beneficial ownership of these shares.

Section 16(a) Beneficial Ownership Reporting Compliance

Based upon a review of our records, we believe that in 2003 our directors and executive officers filed on a timely basis all reports of holdings and transactions in Millennium common stock required to be filed with the SEC pursuant to Section 16(a) of the Securities Exchange Act of 1934, except that on March 10, 2003, Dr. Homcy filed late a Form 4 reporting an employee stock option granted to him on February 26, 2003.

Ownership By Principal Stockholders

This table shows certain information, based on filings with the Securities and Exchange Commission, about the beneficial ownership of our common stock as of the date indicated below by each person known to us owning beneficially more than 5% of our common stock.

(1)

According to a Schedule 13G/A filed jointly with the Securities and Exchange Commission on February 10, 2004, FMR Corp., Edward C. Johnson 3rd, Abigail P. Johnson, and Fidelity Management and Research Company report having sole voting power for 3,002,680 shares, and sole dispositive power for 39,492,613 shares.

OUR CORPORATE GOVERNANCE

Our Commitment to Good Corporate Governance

We believe that good corporate governance and an environment of the highest ethical standards are important for Millennium to achieve business success and to create value for our stockholders. Our Board of Directors is committed to high governance standards and to continually work to improve them. We continue to review our corporate governance practices in light of ongoing changes in applicable law and NASDAQ stock market listing standards. We also compare our governance practices to those identified as best practices by various authorities and other public companies.

10

Role of Our Board of Directors

Our Board of Directors currently consists of twelve members, one of whom is not standing for reelection this year. The Board monitors overall corporate performance and the integrity of our financial controls and legal compliance procedures. It elects senior management and oversees succession planning and senior management's performance and compensation. The Board also oversees our long and short term strategic and business planning, and conducts a year-long process which culminates in Board review and approval each year of a business plan, a capital expenditures budget and other key financial and business objectives.

Members of the Board keep informed about our business through discussions with the Chairperson and other members of our senior management team, by reviewing materials provided to them on a regular basis and in preparation for Board and committee meetings and by participating in meetings of the Board and its committees. We regularly review key portions of our business with the Board. We introduce our executives to the Board so that the Board can become familiar with our key talent. We have a new Board member orientation process which introduces each new member to Millennium's business through a series of meetings with management, tours of facilities, and written materials about Millennium and the biopharmaceutical business. We also conduct Board education sessions on topics such as corporate finance.

In 2003, the Board of Directors met seven times. During 2003, each director attended at least 75% of the total number of meetings of the Board of Directors and all committees of the Board on which the director served. We do not have a policy requiring our Board members to attend our annual meetings of stockholders; in 2003 one Board member attended our annual meeting. We expect most of our Board members to attend the 2004 annual meeting either in person or by telephone conference call. Beginning in 2005, we plan, if schedules permit, to hold a Board meeting in conjunction with our annual meeting to enable more of our Board members to attend our annual meeting.

Board Policies

The Board is guided by its Board Policies, originally adopted in 2001, which we believe demonstrate our continuing commitment to good corporate governance. These policies are reviewed by the Board from time to time, as needed. The policies are posted on the corporate governance section of our website at http://www.millennium.com/investors.

Performance of Our Board

We consider it important to continually evaluate and improve the effectiveness of the Board, its committees and its individual members. We do this in various ways. At the beginning of each year, the Board adopts goals that it considers important for the Board to achieve during that year, monitors progress towards those goals throughout the year and conducts a review to assess whether it has successfully achieved those goals and how well the Board has performed in providing oversight and adding value to Millennium. Each of the Board's standing committees also adopts yearly goals and conducts annual self-evaluations as do individual members of the Board.

The Nominating and Board Governance Committee, working with the lead outside director, periodically assesses the Board's performance, and the performance of individual members, and reports its conclusions to the full Board. Each Board member annually completes a self-evaluation of his or her contributions. Also, after each Board meeting, each Board member assesses the effectiveness of the materials presented and conduct of the meeting and has the opportunity to offer suggestions for improvement where needed.

Code of Conduct, Business Ethics and Compliance

During 2003, we, working with our Audit Committee, reviewed, consolidated and enhanced our business ethics and compliance procedures resulting in a newly revised code of conduct, our Core Values

11

Handbook, which the Board of Directors adopted in December 2003. The Core Values Handbook applies to all members of the Board of Directors and all employees of Millennium, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Handbook also contains additional obligations to which our chief executive officer and senior financial officers are subject. Our Core Values Handbook is posted on the corporate governance section of our website at http://www.millennium.com/investors. We intend to post on our website all disclosures that are required by law or NASDAQ stock market listing standards concerning any amendments to, or waivers from, our code of business conduct and ethics. Stockholders may request a free copy of our Core Values Handbook by writing to Investor Relations, Millennium Pharmaceuticals, Inc. 40 Landsdowne Street, Cambridge, Massachusetts 02139.

Independence of Directors

The Board Policies provide that a substantial majority of the Board as a whole should be composed of independent directors. The Nominating and Board Governance Committee annually reviews the independence of the directors, reports to the Board which directors it recommends that the Board determine are independent and the Board makes the determination. The Board takes into account NASDAQ stock market listing standards, applicable laws and regulations and other factors in making its determinations. The Board has determined that Dr. Cordes, Dr. Coughlin, Ms. Graham, Mr. Heidrich, Dr. Kucherlapati, Dr. Lander, Dr. Miller, Mr. Selby and Mr. Weg are currently independent directors and that Dr. Homcy, Mr. Kailian and Mr. Levin are currently not independent directors.

The Board has also determined that Dr. Kucherlapati and Dr. Lander will no longer be considered independent directors under new NASDAQ stock market listing standards that will become effective as of the date of our 2004 annual meeting of stockholders because they each received consulting fees from Millennium in 2001. The Committee expects that Dr. Kucherlapati and Dr. Lander will meet these new NASDAQ standards as of January 1, 2005.

Executive Sessions of Independent Directors

Directors who are independent under the NASDAQ stock market listing standards and applicable laws and regulations meet in executive session without management present at every regularly scheduled Board meeting. In addition, periodically the Board meets in executive session without the chief executive officer present and in executive session with the non-employee directors only.

Lead Outside Director

Since 2000, the Board has designated a lead outside director who oversees an annual process of Board and director evaluation, including providing appropriate feedback to the Board. The lead outside director provides assistance to the Chairperson and Corporate Secretary in planning Board agendas, acts as the leader of the non-employee directors, acts as Chairperson of the non-employee directors in meetings of the non-employee directors, and acts as Chairperson of the Board in the absence of the Chairperson or a vacancy in the position of Chairperson. Mr. Heidrich is currently serving as our lead outside director.

12

Committees of the Board

The Board currently has four standing committees: an Audit Committee, a Compensation and Talent Committee, a Nominating and Board Governance Committee and an Executive Committee. The Board also appoints from time to time ad hoc committees to address specific matters.

The Audit Committee consists entirely of independent directors within the meaning of SEC regulations and the NASDAQ stock market listing standards.

The Board of Directors has determined that Norman C. Selby, chair of the committee, qualifies as an audit committee financial expert, who is independent within the meaning of Securities and Exchange Commission regulations and NASDAQ stock market listing standards.

The Audit Committee's primary functions are to assist the Board in monitoring the integrity of our financial statements and our systems of internal control. The Audit Committee has direct responsibility for the appointment, independence and performance of our independent auditors. The Committee is responsible for pre-approving any engagements of our independent auditors.

The Committee also reviews our risk management practices, strategic tax planning, preparation of quarterly and annual financial reports and our ethics and compliance processes.

At each Audit Committee meeting, the Committee members meet with our independent auditors without management present and with members of management in separate private sessions, to discuss any matters that the Committee or these individuals believe should be discussed privately with the Audit Committee, including any significant issues or disagreements concerning our accounting practices or financial statements.

Beginning in 2004, the Committee will conduct an additional meeting each quarter to review the financial statements prior to the public release of earnings. In 2003, this review was conducted once each quarter by telephone conference call with representatives of management, the independent auditors and the Chair of the Audit Committee (with other Audit Committee members also invited to participate).

The Audit Committee also meets regularly with our chief compliance officer, including a separate private session with the chief compliance officer without management present.

The Audit Committee charter is included as Appendix A to this proxy statement. The charter is also posted on the corporate governance section of our website at http://www.millennium.com/investors.

13

Please also see the Audit Committee Report at page 26 below.

The Compensation and Talent Committee consists entirely of independent directors within the meaning of SEC regulations and NASDAQ stock market listing standards.

The Committee's primary responsibilities are to address chief executive officer, executive officer, and senior talent development, retention, performance, succession planning, and to oversee compensation and benefit matters. It reviews the qualifications of the executive officers and nominates executive officers for election by the Board. It reviews and approves compensation policy for Millennium to ensure that our compensation strategy supports organizational objectives and stockholder interests, and considers appropriate companies for compensation comparison purposes. The Committee determines the compensation of the chief executive officer and reviews and approves the compensation of all other executive officers. It approves and recommends, and suggests material changes to, any employee incentive compensation or retirement plans.

The Compensation and Talent Committee chooses the outside compensation consultant that we engage, sets the budget for the consultant and reviews the services provided by the consultant to management. The Committee also meets regularly with the consultant in private sessions without management present.

The Compensation and Talent Committee charter is posted on the corporate governance section of our website at http://www.millennium.com/investors.

Please also see the Compensation and Talent Committee Report on Executive Compensation at page 23 below.

The Nominating and Board Governance Committee consists entirely of independent directors within the meaning of SEC regulations and applicable NASDAQ stock market listing standards. Dr. Kucherlapati and Dr. Lander will not be considered independent directors under new NASDAQ stock market listing standards that will take effect as of the 2004 annual meeting because they received consulting fees from Millennium in 2001. They are expected to meet these listing standards as of January 1, 2005. Dr. Kucherlapati and Dr. Lander have each indicated that they will resign from the Committee prior to the 2004 annual meeting of stockholders so that the Committee will continue to be composed entirely of independent directors throughout all of 2004.

The Nominating and Board Governance Committee is responsible for Board governance issues. It recommends to the Board policies relating to the conduct of Board affairs. It periodically evaluates the composition of the Board, the contribution of individual directors, and the Board's effectiveness as a whole. The Committee also recommends to the Board assignment of Board members to committees. It

14

also reviews compensation for non-employee directors and recommends to the Board changes as appropriate.

The Committee also recommends to our full Board individuals to serve as directors. The Committee recommends to the Board guidelines and criteria for Board membership and reviews with the Board, on a periodic basis, the appropriate skills and characteristics required of Board members in the context of the then current needs of Millennium. See the discussion under Board Membership Criteria below.

The Nominating and Board Governance Committee's process to identify and evaluate candidates includes requests to Board members and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the Nominating and Board Governance Committee and the Board. Assuming that appropriate biographical and background material is provided for candidates recommended by stockholders and the process for submitting the recommendation discussed below is followed, the Nominating and Board Governance Committee will evaluate those candidates by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by Board members. The Committee also from time to time utilizes the services of a search firm to help identify candidates for Director.

The Committee will consider qualified candidates for Director recommended and submitted by stockholders. Submissions that meet the then current criteria for Board membership are forwarded to the chair of the Nominating and Governance Committee for further review and consideration. The Committee will consider a recommendation only if appropriate biographical information and background material is provided on a timely basis, accompanied by 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 one year as of the date of that the recommendation is made. To submit a recommendation for a nomination, a stockholder may write to the Nominating and Board Governance Committee, Millennium Pharmaceuticals, Inc., 40 Landsdowne Street, Cambridge, Massachusetts 02139, Attention: Corporate Secretary. In addition, our By-laws permit stockholders to nominate individuals, without any action or recommendation by the Committee or the Board, for election as directors at an annual stockholder meeting. For a description of this By-law provision, see Additional Information on page 29 of this proxy statement.

Mr. Weg was appointed to the Nominating and Board Governance Committee on December 23, 2003 and Mr. Selby was appointed to the Committee on February 25, 2004.

The charter of the Nominating and Board Governance Committee is posted on the corporate governance section of our website at http://www.millennium.com/investors.

The Executive Committee may exercise, when the Board of Directors is not in session, all powers of the Board of Directors in the management of Millennium's business and affairs to the extent permitted by law, our By-laws and as specifically granted by the Board of Directors. The Executive Committee did not meet in 2003, but did take action through written consents of all of the members of the Committee.

Mr. Levin resigned from the Executive Committee on February 9, 2004. The Committee currently consists entirely of independent directors within the meaning of SEC regulations and NASDAQ stock market listing standards.

15

Communications with the Board

A stockholder may contact the Board of Directors or any committee of the Board by writing to Board of Directors (or specified committee), Millennium Pharmaceuticals, Inc., 40 Landsdowne Street, Cambridge, MA 02139, Attn: Corporate Secretary or by sending an e-mail to corporate_secretary@mlnm.com. You should indicate on your correspondence that you are a Millennium stockholder. Communications will be distributed to the chairperson, lead outside director, the appropriate committee chair or other members of the Board, as appropriate, depending on the facts and circumstances stated in the communication received.

Anyone may express financial, internal auditing controls, or auditing concerns to the Audit Committee by calling the Corporate Secretary's helpline voicemail box at 866-469-6566, or sending an e-mail to corporate_secretary@mlnm.com. Messages to the Audit Committee will be received by our Corporate Secretary who will promptly report all appropriate messages received to the Audit Committee or a designated member. You may report your concern anonymously or confidentially.

Board Membership Criteria

The Nominating and Board Governance Committee reviews with the Board on a periodic basis the appropriate skills and characteristics required of Board members in the context of Millennium's current and future needs. The Committee regularly assesses the skills and characteristics of current Board members, identifies opportunities for enhancing the skill sets represented on the Board and prepares appropriate recruiting plans. To be considered as a prospective nominee for director a person should possess the highest personal and professional ethics, have excellent business judgment and the ability to act in the interests of our stockholders, and possess knowledge and abilities that will enable the Board to fulfill its responsibilities. The Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee.

Compensation Committee Interlocks and Insider Participation

The current members of the Compensation and Talent Committee are Mr. Heidrich, Ms. Graham, Mr. Selby and Mr. Weg. No member of the Compensation and Talent Committee was at any time during 2003, or formerly, an officer or employee of Millennium or any subsidiary of Millennium. No executive officer of Millennium has served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity while an executive officer of that other entity served as a director of Millennium or member of our Compensation and Talent Committee.

Indemnification of Officers and Directors

We indemnify our directors and officers to the fullest extent permitted by law for their acts and omissions in their capacity as a director or officer of Millennium, so that they will serve free from undue concerns for liability for actions taken on behalf of Millennium. This indemnification is required under our corporate charter.

DIRECTOR COMPENSATION

We do not pay directors who are also Millennium employees any additional compensation for their service as a director. We do pay our non-employee directors for their service as directors.

Each year, the Nominating and Board Governance Committee reviews the compensation we pay to our non-employee directors. The Committee compares our Board compensation to compensation paid to non-employee directors by similarly sized public companies in similar businesses. The Committee also considers the responsibilities that we ask our Board members to assume and the amount of time required to perform those responsibilities. This year, the Committee determined that the Board fees would remain the same as were paid in 2003. Below we show the rate of compensation that we pay to our non-employee directors.

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Cash Compensation

Each director who is not an employee of Millennium receives:

Millennium also reimburses non-employee directors for reasonable travel and out-of-pocket expenses in connection with their service as directors.

Stock Compensation

Directors also participate in our 2000 Stock Incentive Plan. Under the option program for directors adopted by the Board, our non-employee directors receive stock option grants as follows:

Each option terminates on the earlier of:

•

ten years after the date of grant or

•

the date 90 days after the option holder ceases to serve as a director or employee (or one year in the case of disability and three years in the event of death).

Under the 2000 Plan, an option becomes fully vested in the event of the death of the director. The exercise price of options granted under the 2000 Plan is equal to the closing price of Millennium common stock as quoted on the NASDAQ stock market on the date of grant.

Compensation Paid to Non-Employee Directors for 2003

Millennium paid the annual retainer amount and meeting fees to non-employee directors for service on the Board in 2003 as follows: Eugene Cordes, $42,500, Shaun R. Coughlin, $37,750, Ginger L. Graham, $40,000, A. Grant Heidrich, III, $49,500, Raju S. Kucherlapati, $43,750, Eric S. Lander, $42,500, Edward D. Miller, $38,000, Norman C. Selby, $50,250 and Kenneth E. Weg, $40,000.

Under our 2000 Stock Incentive Plan, Millennium granted stock options to non-employee directors in three equal installments on May 1, 2003, June 1, 2003 and July 1, 2003 for a total of 15,000 shares to each of Dr. Cordes, Dr. Coughlin, Ms. Graham, Dr. Lander, Dr. Miller and Mr. Weg, for a total of 17,000 shares to Mr. Heidrich and for a total of 15,500 shares to each of Dr. Kucherlapati and Mr. Selby. The option exercise prices per share were: $11.61 for the grants on May 1, 2003, $15.55 for the grants on June 1, 2003, and $14.00 for the grants on July 1, 2003.

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COMPENSATION OF EXECUTIVE OFFICERS

Summary Compensation

This table shows certain information about the compensation we pay our Chief Executive Officer and each of our four other most highly compensated executive officers.

Summary Compensation Table

(1)

All Other Compensation includes:

(2)

Mr. Kailian joined Millennium in February 2002 and ceased his service as a Millennium executive officer on December 31, 2003, the date of his termination of employment.

(3)

In 2003 and 2002, Millennium provided an apartment for Mr. Kailian to use when he was in the Boston area. Millennium paid Mr. Kailian $118,879 in 2003 and $134,374 in 2002 for housing and utilities expenses and the related tax liability.

(4)

Mr. Bate joined Millennium in December 2002.

(5)

Mr. Bate was paid a bonus of $50,000 upon joining Millennium.

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Option Grants in 2003

This table shows all options to purchase our common stock granted in 2003 by us to our Chief Executive Officer and each of our four other most highly compensated executive officers.

(1)

The percentage is calculated by dividing the total number of shares underlying options granted to the executive officer in 2003 by the total number of shares underlying options granted to all employees in 2003.

(2)

Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. These gains are based on assumed rates of stock price appreciation of 5% and 10% compounded annually from the date the respective options were granted to their expiration date, net of the applicable option exercise price. This table does not take into account any appreciation or depreciation in the price of the common stock to date. Actual gains, if any, on stock option exercises will depend on the future performance of the common stock and the date on which the options are exercised.

(3)

1/48th of the total number of shares subject to the option are exercisable one month after the date of grant and an additional 1/48th of the total number of shares subject to the option become exercisable monthly thereafter until all of the shares are exercisable.

(4)

6/48ths of the total number of shares subject to the option are exercisable on the date of grant and an additional 1/48th of the total number of shares subject to the option become exercisable monthly thereafter until all of the shares are exercisable.

(5)

1/48th of the total number of shares subject to the option become exercisable monthly beginning on the date of grant.

(6)

2/48ths of the total number of shares subject to the option are exercisable on the date of grant and an additional 1/48th of the total number of shares subject to the option become exercisable monthly thereafter until all of the shares are exercisable.

(7)

1/4 of the total number of shares subject to the option are exercisable one year after the executive's hire date, December 15, 2003, and an additional 1/48th of the total number of shares subject to the option become exercisable monthly thereafter until all of the shares are exercisable.

Aggregated Option Exercises and Fiscal Year-End Option Values

This table shows information about stock options exercised in 2003 and stock options held as of December 31, 2003 by our Chief Executive Officer and each of our four other most highly compensated executive officers.

19

Aggregated Option Exercises in 2003 and 2003 Year-End Option Values

(1)

Value of unexercised in-the-money options to purchase shares of our common stock is based on the closing sales price of Millennium's common stock on December 31, 2003 ($18.65), the last trading day of Millennium's 2003 fiscal year, less the applicable option exercise price.

Employment Agreements and Change in Control Arrangements

Millennium has employment agreements with Dr. Tepper and Ms. Pine. Each executive's employment with Millennium is at-will and may be terminated by Millennium at any time with or without cause. If the executive's employment is terminated without Justifiable Cause, as that term is defined in their agreements, then, subject to certain conditions, Millennium is obligated to pay the executive severance payments equal to twelve months' salary. The form of these employment agreements is filed as an exhibit to our Annual Report on Form 10-K that we filed with the Securities and Exchange Commission.

Mr. Levin, Mr. Kailian, Dr. Tepper, Mr. Bate and Ms. Pine hold stock options granted under various Millennium equity compensation plans. These plans provide that an employee's outstanding unvested stock options or awards will immediately vest in full if, during the period one month before through twelve months after the date of a Change of Control, either an employee voluntarily terminates his or her employment with us for Good Reason or we terminate his or her employment involuntarily without Cause. Change of Control, Good Reason and Cause are defined in the plans which are filed as exhibits to our Annual Report on Form 10-K that we filed with the Securities and Exchange Commission.

Under a Key Employee Change of Control Severance Plan, assumed by Millennium in our merger with COR Therapeutics, Inc., and two letter agreements between Millennium and each of Mr. Kailian (dated December 24, 2002 and March 1, 2004) and Dr. Homcy (dated December 24, 2002 and November 7, 2003), Mr. Kailian and Dr. Homcy were entitled to certain benefits upon their termination of employment. Mr. Kailian's employment with Millennium terminated on December 31, 2003 and Dr. Homcy's employment terminated on November 7, 2003. Under the Plan and their letter agreements:

•

Millennium will pay them their base salary at the rate they were receiving as of the date of the COR merger ($500,000 for Mr. Kailian and $381,600 for Dr. Homcy) for eighteen months after their termination dates and the pro rata portion of their target bonus for 2003 at the rate set as of the date of the merger (80% for Mr. Kailian and 50% for Dr. Homcy);



•

stock options outstanding as of the date of the COR merger immediately vested and became exercisable as of the date of their termination of employment;



•

stock options granted to them after our merger with COR that were held by them on their termination dates will cease to vest on the earlier to occur of: the end of their service as a member of our Board of Directors or one year from their termination date;



•

Millennium will continue each of their health benefits for twelve months; and



•

the payments under these agreements to be received by each of them upon termination of employment will be adjusted if necessary to result in the greater amount of payment possible after taking into consideration the excise tax imposed by Section 4999 of the Internal Revenue Code.

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The Key Employee Change of Control Severance Plan and the letter agreements with Mr. Kailian and Dr. Homcy are filed as exhibits to our Annual Report on Form 10-K that we filed with the Securities and Exchange Commission. Mr. Kailian and Dr. Homcy are continuing to serve on our Board of Directors.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See description of benefits under the COR Key Employee Change of Control Severance Plan and certain letter agreements between Millennium and each of Mr. Kailian and Dr. Homcy under "Employment Agreements" above.

In November 2003 we entered into a transaction with Portola Pharmaceuticals, Inc., a new biopharmaceutical company focused on the discovery and development of novel therapeutics for the treatment and prevention of severe cardiovascular diseases. Charles Homcy, who serves on our Board of Directors, is Portola's President, Chief Executive Officer and a member of Portola's Board of Directors. In connection with this transaction we licensed to Portola certain rights in the areas of thrombosis research, sold to Portola certain assets and subleased to Portola a portion of our leased property in South San Francisco. Under the sublease with us, Portola pays us monthly rent at a rate beginning at approximately $55,000 and increasing to approximately $100,000 over a period of three years, after which the rate will be set at the then-current fair market value for the remainder of the term. Portola also pays us $16,000 per month through the second quarter of 2004 for certain transitional services. As a part of this transaction, we were granted shares of Portola's Series A Preferred Stock valued at $1.0 million. This transaction was negotiated on an arm's-length basis and was reviewed by an independent committee of the Board of Directors.

Millennium and Vaughn Kailian, who terminated his employment with Millennium on December 31, 2003, are discussing the possibility of entering into a consulting relationship under which Mr. Kailian would provide consulting services to us.

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STOCK PERFORMANCE GRAPH

This graph compares the performance of Millennium common stock with the performance of the NASDAQ Stock Market (U.S. Companies) Index and the NASDAQ Pharmaceuticals Index (assuming reinvestment of dividends). The graph assumes $100 invested at the per share closing price on the NASDAQ Stock Market in Millennium and each of the indices on December 31, 1998. Measurement points are on the last trading days of the years ended December 31, 1999, December 31, 2000, December 31, 2001, December 31, 2002 and December 31, 2003.

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COMPENSATION AND TALENT COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation and Talent Committee is currently composed of four independent, non-employee directors and operates under a written charter. The Committee's primary functions are to act on behalf of the Board of Directors to address CEO, executive officer and senior executive talent development, retention, performance and succession planning, and with respect to Millennium's general and executive compensation and benefit practices. In particular, the Committee:

•

conducts an annual review of the Chief Executive Officer's performance based on objective and subjective criteria, such as performance of the business, accomplishment of long-term strategic objectives and management development;



•

reviews with the Chief Executive Officer Millennium's organizational strategies, the development and potential for promotion of the senior members of Millennium's management and the availability of replacements for these management positions;



•

reviews the qualifications of the executive officers of Millennium and nominates executive officers for election by the Board of Directors;



•

reviews and approves compensation policy and philosophy for Millennium to ensure that the compensation strategy supports organizational objectives and stockholder interests, and selects appropriate companies for compensation comparison purposes;



•

determines the annual salary and other elements of total compensation of the Chief Executive Officer, and reviews and approves annually the total compensation of all other executive officers;



•

administers Millennium's equity incentive plans and the issuance of awards pursuant to those plans, including approving all equity grants to executive officers, establishing equity grant guidelines and monitoring the availability of shares under those plans; and



•

recommends to the full Board of Directors the adoption of material changes to: (a) any equity incentive plans; (b) any qualified or non-qualified employee pension, profit-sharing or retirement plans; and (c) any broad-based employee incentive compensation plans; and approves changes to these plans that do not require stockholder approval or do not involve material amounts of money or other consideration.

General Compensation Philosophy

Millennium's compensation philosophy is based on the principles of competitive and fair compensation consistent with performance. The executive compensation program is designed to motivate and reward executive officers by aligning a substantial portion of their compensation with the achievement of priority strategic business goals and individual performance objectives.

To ensure that compensation is competitive, the Committee compares Millennium compensation levels annually with those of other leading companies in the biotechnology and pharmaceutical industries with whom Millennium competes for executive talent. For 2003, this comparison group included Amgen, Biogen/IDEC, Celgene Corp., Cephalon, Chiron, Genentech, Genzyme Corp., Gilead, and MedImmune. In addition, the Committee considers compensation levels at pharmaceutical companies in determining appropriate total compensation levels. The Committee also reviews compensation levels for general business and technology positions at cross-industry companies.

Our compensation target is to pay employees, including our executive officers, at approximately the 65th percentile of the range of total compensation paid for comparable positions by these companies. Actual compensation may vary above or below this level depending on Millennium's performance relative to goals and individual employee performance. To ensure fairness, Millennium also strives to achieve equitable pay

23

relationships between individual employees and between different organization levels within Millennium, including the executive officers.

Key Elements of Compensation

The major elements of Millennium's compensation program are base salary, annual bonus and stock options.

        Salary.  Base salary levels are designed to recognize an individual's ongoing contribution, to be commensurate with an individual's experience and organization level and to be competitive with market benchmarks. Increases in annual salaries are based on demonstrated levels of core job competency, effectiveness in performing essential job requirements and competitive base salary position versus market. The Committee does not use a specific formula based on these criteria, but instead makes an evaluation of each executive officer's contributions in light of all such criteria.

        Success Sharing Bonus Program.  Millennium's executive officers, along with all other employees, are eligible to participate in a success sharing bonus program that is designed to promote the achievement of priority Millennium goals. At the beginning of 2003, Millennium established a set of 10 priority goals for the year, which were then reviewed and approved by the Committee and by the Board. For 2003, the priority goals addressed product/pipeline development; organizational development; and finance/value creation. At the end of the year, the level of funding for the program is based on the Committee's evaluation of Millennium's achievement of these priority goals. For 2003, the success sharing bonus program was funded at 100% of the target level established at the beginning of the year. This funding determination was based on the Committee's assessment of Millennium's overall achievements related to these goals.

Each executive officer has a target bonus opportunity that is set by the Committee each year based on its review of total compensation at the companies in the comparison group identified above. For 2003, target bonus levels for Millennium's executive officers ranged from 30 - 50% of base salary, although actual bonus awards can range from zero to 150% of the target bonus level.

The actual individual bonuses awarded for 2003 were based on the funding for the year as described above and assessments of each individual's achievement of priority goals for himself or herself and his or her department or group that were also established at the beginning of the year.

        Stock Option Program.  Substantially all employees are eligible to participate in Millennium's stock option program. Our stock option program is designed to directly align the long-term financial interests of Millennium's employees and its stockholders, to assist in the retention of employees by providing a meaningful ownership stake in Millennium to our employees and to encourage our employees to think and act like owners of the business. Millennium generally uses a four-year vesting period and a ten-year exercise period for stock option grants to encourage key employees to continue their employment with us. The exercise price for all stock options granted in 2003 equaled the market value of the underlying shares on the dates of grant. Therefore, ultimately the stock options have value only if the value of the underlying shares increases.

Millennium typically grants stock options to new employees when they start employment and to continuing employees on an annual basis and upon promotions to positions of greater responsibility. Decisions about the size of annual stock option grants that may be made to continuing employees are made in February, and are generally intended to reflect the individual's position with Millennium, the degree to which his or her contributions impacted our results in the past year, and the importance of his or her critical skills for Millennium's future success. These grants are currently awarded in two equal installments in February and in September to help mitigate the effect of short-term market price fluctuations. Grants to new employees and to promoted employees are made in three equal increments over three months to help mitigate the effect of short-term market price fluctuations.

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Executive officers are also eligible to participate in our 1996 Employee Stock Purchase Plan. The Purchase Plan is available to virtually all employees of Millennium and generally permits participants to purchase shares at a discount of approximately 15% from the fair market value at the beginning or end of the applicable purchase period.

Based on our annual competitive analysis, available public data and published surveys, we believe that 2003 compensation for Millennium's executive officers will be positioned approximately at the target level of the 65^th percentile of the comparison companies on a size adjusted basis, consistent with the Committee's view of Millennium's performance in 2003.

Mr. Levin's 2003 Compensation

Mr. Levin is eligible to participate in the same executive compensation plans available to Millennium's executive officers.

In March 2003, Mr. Levin's salary level and target bonus opportunity were reviewed and a decision was made to maintain his 2002 salary level of $500,000 and 2002 target bonus opportunity of 50% for 2003. Mr. Levin was granted stock options to purchase an aggregate of 400,000 shares of Millennium's common stock in 2003 based on the Committee's assessment of how his contributions impacted Millennium's results in 2002 and the importance of his leadership to Millennium's future success. These stock options were granted in equal installments in February and September 2003 at exercise prices of $6.88 and $14.68 per share respectively.

In March 2004, Mr. Levin was awarded a success sharing bonus of $250,000, based on the funding of the success sharing bonus program for the year 2003 as described above and on the Committee's assessment of his achievement of individual priority goals and the critical importance of his efforts and continued leadership to Millennium in 2003.

The Committee believes that Mr. Levin's 2003 total compensation was competitive, fair, and consistent with Millennium's results in 2003, and reflective of Millennium's executive compensation philosophy.

Tax Policy

Section 162(m) of the Internal Revenue Code generally disallows the deductibility of compensation paid to Millennium's Chief Executive Officer and four other most highly compensated officers to the extent it exceeds $1 million per executive. Certain compensation, including qualified performance-based compensation, will not be subject to the deduction limit if certain requirements are met. In general, we structure and administer our stock option plans (for example, our 2000 Stock Incentive Plan, which was approved by our stockholders at the 2000 Annual Meeting) in a manner that is intended to comply with the performance-based exception to Section 162(m). Nevertheless, there can be no assurance that compensation attributable to awards granted under our stock option plans will be treated as qualified performance-based compensation under Section 162(m). In addition, the Committee believes that it is appropriate to retain discretion in determining executive compensation and will reserve the right to exercise this discretion in determining compensation in excess of the limit when such payment is deemed appropriate. The Committee will continue to monitor the requirements of the Internal Revenue Code to determine what actions, if any, should be taken with respect to Section 162(m) relative to Millennium's executive compensation programs.

In 2003, the Committee held seven meetings.

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AUDIT COMMITTEE REPORT

The Audit Committee's primary function is to assist the Board of Directors in monitoring the integrity of Millennium's financial statements, systems of internal control and the independence and performance of the independent auditor. The Board of Directors has also expanded the Committee's responsibilities to include hiring the independent auditor (previously the Committee recommended such hiring to the Board of Directors), pre-approving any engagements of the independent auditor for non-audit services, receiving and reviewing the reports of the CEO and CFO required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14 of the Securities Exchange Act of 1934, and reviewing Millennium's ethics and compliance programs.

The Committee is currently composed of four of our independent, non-employee directors. The Board of Directors and the Committee believe that the Committee's current member composition satisfies the rule of the National Association of Securities Dealers, Inc. that governs audit committee composition, including the requirements that:

•

all audit committee members are "independent directors" as that term is defined by NASD Rule 4200(a)(15);



•

all audit committee members are able to read and understand fundamental financial statements; and



•

at least one audit committee member is an "Audit Committee Financial Expert" as defined by 17 CFR Part 228.41(e)

The Committee has determined that its Chairman, Norman C. Selby, qualifies as an "Audit Committee Financial Expert" and also that he is independent from Millennium's management under the Exchange Act and NASD standards.

In 2003, the Committee held three regular meetings and four Committee Chairman earnings release clearance teleconferences.

In 2001, Millennium, with the independent auditors, organized a financial education program for Committee members that reviewed Millennium's overall presentation of our fundamental financial statements and the selection and disclosure of critical accounting policies for Millennium's significant transactions. The Committee plans to participate in similar programs on a regular basis.

The Committee operates under a written charter adopted by the Committee that reflects standards contained in the NASD rules. The Audit Committee reviews this charter annually. A complete copy of the current charter is attached to this proxy statement as Appendix A.

Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended, issued by the Auditing Standards Board of the American Institute of Certified Public Accountants, requires the independent auditors to provide the Committee with additional information regarding the scope and results of the audit, including:

•

the independent auditors' responsibilities under generally accepted auditing standards;



•

the independent auditors' judgments about the quality of Millennium's accounting principles;



•

the adoption of, or a change in, accounting policies;



•

sensitive accounting estimates;



•

accounting for significant unusual transactions and for controversial or emerging areas;



•

significant audit adjustments;

26

•

unadjusted audit differences considered to be immaterial;



•

other information in documents containing audited financial statements;



•

total fees for management consulting services and types of services rendered;



•

disagreements with management on financial accounting and reporting matters;



•

major issues discussed with management prior to retention;



•

consultation with other accountants;



•

difficulties encountered in performing the audit; and



•

material errors, fraud and illegal acts.

We have discussed with the independent auditors the matters required to be discussed by this Statement.

Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as amended, requires the independent auditors to communicate, at least annually, with the Committee regarding all relationships between the independent auditors and Millennium that, in the professional judgment of the independent auditors, may reasonably be thought to bear on their independence. We have received and reviewed the written disclosures and the letter from the independent auditors required by this Standard, and we have discussed with the independent auditors the independent auditors' independence. When considering the auditors' independence, we considered whether their provision of services to Millennium beyond those rendered in connection with their audit and review of Millennium's consolidated financial statements was compatible with maintaining their independence and discussed with the auditors any relationships that may impact their objectivity and independence. We also reviewed, among other things, the amount of fees paid to the auditors for audit and non-audit services in 2003. Information about the auditors' fees for 2003 is included below in this proxy statement under "Independent Auditors." Based on these discussions and considerations, we are satisfied as to the auditors' independence.

We have reviewed and discussed with management and the independent auditors Millennium's audited financial statements as of and for the year ended December 31, 2003, and we recommended to the Board of Directors that these audited financial statements be included in Millennium's Annual Report on Form 10-K for the year ended December 31, 2003. We have also selected Ernst & Young LLP as Millennium's independent auditors for the fiscal year ending December 31, 2004.

27

INDEPENDENT AUDITORS

The Audit Committee has selected the firm of Ernst & Young LLP as Millennium's independent auditors for 2004. Ernst & Young LLP has served as our independent auditors since Millennium's inception.

Representatives of Ernst & Young LLP are expected to be present at the meeting and will have the opportunity to make a statement if they desire to do so and will also be available to respond to appropriate questions from stockholders.

Aggregate Fees for 2003 and 2002

This table shows the aggregate fees billed to Millennium for the fiscal years ended December 31, 2003 and December 31, 2002 by Ernst & Young LLP.

(a)

All of these fees are for the audit of our financial statements for 2003 and 2002, respectively, for quarterly reviews, registration statements and accounting consultations related to the audited financial statements.

(b)

Audit-related fees:

(c)

Tax fees:

(d)

All Other Fees:

Appointment of Independent Auditor and Pre-Approval of Audit and Non-Audit Services

All of the Ernst & Young LLP fees for 2003 and 2002 shown above were pre-approved by the Audit Committee. The Audit Committee pre-approves all audit and other permitted non-audit services provided by our independent auditors. Pre-approval is generally provided for up to one year, is detailed as to the particular category of services and is subject to a monetary limit. Our independent auditors and senior management periodically report to the Audit Committee the extent of services provided by the independent auditors in accordance with the pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.

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The Board of Directors recommends a vote FOR proposal 2.

Our Audit Committee has selected Ernst & Young LLP, independent auditors, as our auditors for the fiscal year ending December 31, 2004. Although stockholder approval of the selection of Ernst & Young LLP is not required by law, our Board of Directors believes that it is advisable to give stockholders an opportunity to ratify this selection.

If stockholders do not approve this proposal at the 2004 annual meeting, our Audit Committee will reconsider their selection of Ernst & Young LLP. If stockholders do ratify this appointment, the Audit Committee, which has direct authority to engage independent auditors, may appoint a different independent auditor at any time during the year if the Audit Committee determines that a change in auditors would be in the best interests of Millennium and our stockholders.

The Audit Committee has approved all services provided to Millennium by Ernst & Young LLP. Representatives of Ernst & Young LLP are expected to be present at the 2004 annual meeting. They will have the opportunity to make a statement if they desire to do so and will also be available to respond to appropriate questions from stockholders.

ADDITIONAL INFORMATION

Stockholder Proposals for 2005 Annual Meeting

Proposals to be included in the proxy statement.    Under SEC rules, if a stockholder wants us to include a proposal in our proxy statement and form of proxy for presentation at our 2005 Annual Meeting of Stockholders, the proposal must be received by us, attention: Corporate Secretary, at our principal executive offices by November 25, 2004.

Other proposals (not to be included in the proxy statement).    Under our By-laws a stockholder must follow certain procedures to nominate persons for election as directors or to introduce an item of business at an annual meeting of stockholders. Among other requirements, these procedures require any nomination or proposed item of business to be submitted in writing to our Corporate Secretary at our principal executive offices. We must receive the notice of a stockholder's intention to introduce a nomination or proposed item of business at our 2005 annual meeting:

•

no later than 60 days before the 2005 annual meeting; and



•

no earlier than 90 days before the 2005 annual meeting.

However, if less than 70 days' notice or prior public disclosure of the date of the 2005 annual meeting is given or made, notice by the stockholder must be received no later than the close of business on the 10th day following the date on which the notice of the date of the meeting was mailed or public disclosure was made, whichever occurs first. If a stockholder fails to provide timely notice of a proposal to be presented at the 2005 annual meeting, the proxies designated by the Board of Directors will have discretionary authority to vote on the proposal.

29

Householding of Meeting Materials

Some banks, brokers and other nominee record holders may be participating in the practice of "householding" proxy statements and annual reports. This means that only one copy of our proxy statement or annual report may have been sent to multiple stockholders in your household. We will promptly provide a separate copy of either document to you if you contact Investor Relations at Millennium Pharmaceuticals, Inc., 40 Landsdowne Street, Cambridge, Massachusetts 02139, or telephone or e-mail Investor Relations at 617-678-7000 or info@mlnm.com. If you want to receive separate copies of the annual report and proxy statement in the future or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holders, or you may contact us.

By Order of the Board of Directors,
JOHN B. DOUGLAS III, Secretary
March 25, 2004

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APPENDIX A

MILLENNIUM PHARMACEUTICALS, INC.

Audit Committee Charter

The Audit Committee is a standing committee of the Board of Directors, established for the purpose of overseeing the accounting and financial reporting processes of the Company and the audits of the Company's financial statements. Its primary function is to assist the Board in monitoring the integrity of the financial statements of the Company, the Company's systems of internal control, and the independence and performance of the Company's external auditor. The Audit Committee is also responsible for reviewing the Company's ethics and compliance programs. The Audit Committee shall discharge its responsibilities, and shall assess the information provided by the Company's management and the independent auditor, in accordance with its business judgment.

The authority and responsibilities set forth in this charter do not reflect or create any duty or obligation of the Audit Committee to plan or conduct any audit, to determine or certify that the Company's financial statements are complete, accurate, fairly presented, or in accordance with generally accepted accounting principles or applicable law, or to guarantee any report of the independent auditor. In exercising its business judgment, the Audit Committee will rely on the information and advice provided by the Company's management and/or its independent auditor.

The Audit Committee is appointed by the Board of Directors. Except as otherwise permitted by applicable rules, the Audit Committee will consist of at least three members of the Board of Directors, each of whom must meet the independence requirements of the NASD (National Association of Securities Dealers) and any applicable rules of the SEC (Securities and Exchange Commission).

Unless otherwise determined by the Board of Directors (in which case disclosure of such determination shall be made in the Company's annual report filed with the SEC), at least one member of the Audit Committee shall be an "audit committee financial expert" (as defined by applicable SEC rules). Specifically, such member must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. Other members of the Audit Committee must be able to read and understand fundamental financial statements.

The Audit Committee shall meet as often as it deems necessary in order to perform its responsibilities during each calendar year and shall review and reassess the adequacy of this charter at least annually (and recommend any changes to the Board of Directors for approval). The Audit Committee shall report regularly to the Board of Directors. At least annually, the Audit Committee shall evaluate its own performance.

The Audit Committee has the authority to retain special legal, accounting or other consultants to advise the Committee. The Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.

The Audit Committee:

1.

Has direct responsibility for the appointment, compensation, retention (and termination) and oversight of the work of the independent auditor (including resolving disagreements between management and the auditors regarding financial reporting) engaged for the purpose of preparing audit reports or performing other audit, review or attest services for the Company, evaluates the performance of the independent auditor (including the qualifications of the primary partners overseeing the audit at the time when a change in this assignment is proposed), reviews prior to the audit the planning and staffing for the audit and pre-approves the services to be performed by, and to be paid to, the independent auditor for the audit and for any non-audit services provided, however, that non-audit services equaling not more than five percent of the total revenues paid to the

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independent auditor in the fiscal year when such services are provided may instead be approved in accordance with applicable SEC rules. The independent auditor reports directly to the Audit Committee.

2.

Obtains from the independent auditor written affirmations of its independence and a delineation of all relationships between the Company and the independent auditor as required by Independence Standards Board Standard No. 1 ("Independence Discussions with Audit Committees"), engages in dialogues with the independent auditor about any relationships or non-audit services that may impact objectivity and independence and takes, or recommends that the Board of Directors take, appropriate action to oversee the independence of the independent auditor.

3.

Periodically reviews guidelines for the Company's hiring of employees or former employees of the independent auditor who were engaged on the Company's account.

4.

Reviews the Company's material risks or exposures and assesses steps management has taken and/or should take to monitor and minimize such risks to the Company.

5.

Considers and reviews with the independent auditor the adequacy of the Company's system of internal controls, including internal control over financial reporting, computerized information system controls and security, as well as any related significant findings and recommendations of the independent auditor together with management's responses.

6.

Reviews with management and the independent auditor at the completion of the annual audit examinations:

•

the Company's annual financial statements and related footnotes to be included in the Company's Annual Report on Form 10-K (or the annual report to shareholders if distributed prior to the filing of Form 10-K);

•

the independent auditor's audit of the financial statements and its report thereon;

•

the independent auditor's judgment about the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements;

•

the likely effect of regulatory and accounting initiatives on the Company's financial statements;

•

all subsidiary audits performed;

•

any difficulties or disagreements with management encountered during the course of the audit, including any restrictions on the independent auditor's scope of activities or access to required information;

•

other matters related to the conduct of the audit which are to be communicated to the Audit Committee under generally accepted auditing standards; and

•

discusses with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 ("Communication with Audit Committees") relating to the conduct of the audit.

7.

From time to time as appropriate, receives and considers the reports required to be made by the independent auditor regarding:

•

critical accounting policies and practices;

•

alternative treatments within generally accepted accounting principles for policies and practices related to material items that have been discussed with Company management, including ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and

•

other material written communications between the independent auditor and Company management.

8.

Reviews with management and the independent auditor the Company's quarterly financial statements prior to the release of quarterly earnings and the Company's quarterly reports on Form 10-Q (including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations"), and discusses the results of the quarterly review and any other matters required to be communicated to the Audit Committee by the independent auditor

A-2

under generally accepted accounting principles. The Chair of the Audit Committee may represent the entire Audit Committee for purposes of these reviews and discussions.

9.

Considers whether it will recommend to the Board of Directors that the Company's audited financial statements be included in the Company's annual reports on Form 10-K (including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations").

10.

Meets, at each regular meeting of the Audit Committee, with members of management (including the Chief Financial Officer, Controller and the most senior person (if any) responsible for the internal audit activities by the Company) and representatives of the independent auditor, in separate executive sessions, to discuss any matters that the Audit Committee or these individuals believe should be discussed privately with the Audit Committee.

11.

Obtains from the independent auditor assurance that no reporting contemplated by Section 10A of the Securities Exchange Act of 1934 (concerning required response by the independent auditor to audit discoveries) is required.

12.

Reviews all "related party transactions" (defined as transactions required to be disclosed pursuant to Item 404 of Regulation S-K) on an ongoing basis, and approves all such transactions.

13.

Reviews with management and the independent auditor any correspondence with regulators or government agencies and any employee complaints or published reports which raise material issues regarding the Company's financial statements or accounting policies.

14.

Coordinates the Board's oversight of the Company's code of business conduct and the Company's disclosure of controls and procedures; receives and reviews the reports of the CEO and CFO required by Rule 13a-14 of the Securities Exchange Act of 1934.

15.

Reviews with the Company's General Counsel legal matters that may have a material impact on the financial statements, the Company's compliance policies and any material reports or inquiries received from regulators or governmental agencies.

16.

Annually reviews the Company's management expense report guidelines and a summary of expenses incurred.

17.

Establishes procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees, stockholders and other interested parties of the Company of concerns regarding questionable accounting or auditing matters.

18.

Prepares for inclusion where necessary in a proxy or information statement of the Company relating to an annual meeting of stockholders at which directors are to be elected, the report described in Item 306 of Regulation S-K.

19.

Provides input on the appropriate global tax goals for the Company and monitors or reviews or oversees proposed tax planning strategies for the Company.

20.

Engages independent counsel and other advisors as it determines necessary to carry out its duties.

The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the auditors and any advisors employed by the Audit Committee, as well as ordinary administrative expenses of the Audit Committee that the Audit Committee deems are necessary or appropriate in carrying out its duties.

The Audit Committee may have such other responsibilities and authority as may be determined from time to time by the Board of Directors.

Revised February 25, 2004

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MILLENNIUM PHARMACEUTICALS, INC.

Dear Stockholder:

There are issues related to the management and operation of Millennium that require your immediate attention and approval. These are discussed in detail in the accompanying proxy statement.

Your vote counts, and you are strongly encouraged to exercise your right to vote your shares.

If you would like to vote over the Internet or by telephone, follow the instructions for voting on the reverse side of this card. To vote by mail, please mark the box on the proxy card to indicate how your shares will be voted. Then sign the card, detach it and return it in the enclosed postage paid envelope.

Your vote must be received prior to the Annual Meeting of Stockholders to be held on May 7, 2004.

Thank you for your prompt consideration of these matters.

Sincerely,

Millennium Pharmaceuticals, Inc.

DETACH HERE

MILLENNIUM PHARMACEUTICALS, INC.

PROXY SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting of Stockholders—May 7, 2004

Those signing on the reverse side, revoking any prior proxies, hereby appoint(s) Mark J. Levin, Kenneth M. Bate, John B. Douglas III and Joel S. Goldberg or each or any of them with full power of substitution, as proxies for those signing on the reverse side to act and vote at the 2004 Annual Meeting of Stockholders of Millennium Pharmaceuticals, Inc. to be held at 10:00 a.m. EDT at the Boston Marriott Cambridge, 2 Cambridge Center, Cambridge, Massachusetts 02142 and at any postponements or adjournments thereof as indicated upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, in their discretion, upon any other matters which may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO OTHER INDICATION IS MADE, THE PROXIES SHALL VOTE "FOR" THE DIRECTOR NOMINEES AND "FOR" PROPOSAL 2.

PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE               
ENCLOSED ENVELOPE

Please sign this proxy exactly as your name(s) appear(s). Each owner should sign. Trustees and other fiduciaries should indicate the capacity in which they sign. If a corporation or partnership, an authorized officer should sign and indicate his or her title.

MILLENNIUM PHARMACEUTICALS, INC.
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694

Your vote is important. Please vote immediately.

If you vote over the Internet or by telephone, please do not mail your card.

DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

ý    Please mark
votes as in
this example

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘DEF 14A’ Filing		Date		Other Filings
		1/1/05
		12/31/04		10-K,  5
		11/25/04
		8/16/04
		6/7/04
		5/9/04
For Period End:		5/7/04
		3/25/04
Filed on / Effective on:		3/24/04
		3/10/04		10-K,  4
		3/1/04		4
		2/25/04		4
		2/10/04		4,  SC 13G,  SC 13G/A
		2/9/04
		12/31/03		10-K
		12/23/03
		12/15/03		4
		11/7/03		4
		7/1/03		4,  8-K
		6/1/03		4
		5/1/03		4
		3/10/03		4
		2/26/03		4
		12/31/02		10-K,  4,  4/A,  5
		12/24/02
		12/31/01		10-K
		12/31/00		10-K
		12/31/99		10-K405
		12/31/98		10-K
				List all Filings

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Filing Submission 0001047469-04-009118   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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