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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Windtree Therapeutics Com | NASDAQ:DSCO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.50 | 0 | 01:00:00 |
x | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Under Rule 14a-12 |
DISCOVERY LABORATORIES, INC.
|
(Name of Registrant as Specified in Its Charter)
|
|
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
|
x | No fee required. |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
I. | To elect five members to our Board of Directors (“Board”) to serve until the next Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified, or until their earlier resignation or removal (Proposal 1); |
II. | To ratify the selection of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2014 (Proposal 2); |
III. | To amend our 2011 Long-Term Incentive Plan (“2011 Plan”) to increase the number of shares of common stock, par value $.001 per share (“Common Stock”) available for issuance under the 2011 Plan by 5.0 million shares from 7.7 million shares to 12.7 million shares (Proposal 3); |
IV. | To amend our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to increase the number of authorized shares of Common Stock available for issuance by the Company from 150 million to 250 million (Proposal 4); |
V. | To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Proxy Statement accompanying this Notice (Proposal 5); and |
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By Order of the Board of Directors
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|
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Mary B. Templeton, Esq.
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|
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Senior Vice President, General Counsel &
|
|
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Corporate Secretary
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Warrington, Pennsylvania
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||
April [30], 2014
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IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 10, 2014: this Notice of Annual Meeting of Stockholders and our Proxy Statement and 2013 Annual Report to Stockholders for the fiscal year ended December 31, 2013 are available for viewing, printing and downloading at
http://www.ezodproxy.com/discoverylabs/2014
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1. | To elect five members to our Board of Directors (“Board”) to serve until the next Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified, or until their earlier resignation or removal (Proposal 1); |
2. | To ratify the selection of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2014 (Proposal 2); |
3. | To amend our 2011 Long-Term Incentive Plan (the “2011 Plan”) to increase the number of shares of common stock, par value $.001 per share (“Common Stock”) available for issuance under the 2011 Plan by 5.0 million shares from 7.7 million shares to 12.7 million shares (Proposal 3); |
4. | To amend our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to increase the number of authorized shares of Common Stock available for issuance from 150 million to 250 million (Proposal 4); |
5. | To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this Proxy Statement (Proposal 5); and |
· | “FOR” the election of the Board’s nominees for director (Proposal 1) ; |
· | “FOR” the ratification of the selection of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2014 (Proposal 2); |
· | “FOR” the amendment to the 2011 Plan to increase the number of shares of Common Stock available for issuance under the 2011 Plan by 5.0 million shares from 7.7 million shares to 12.7 million shares (Proposal 3); |
· | “FOR” the amendment to our Certificate of Incorporation to increase the number of authorized shares of Common Stock available for issuance from 150 million to 250 million (Proposal 4); and |
· | “FOR” the approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement (Proposal 5). |
· | Shares represented by stockholders attending the Annual Meeting, whether or not they vote all their shares; |
· | All shares represented by validly delivered proxies which contain one or more abstentions or which have votes withheld from any nominee for director; and |
· | Shares represented by validly delivered proxies containing broker “non-votes.” |
· | If you voted originally by telephone or via the Internet, enter new instructions on the same voting system before 7:00 p.m. (EDT), June 9, 2014; or |
· | If you voted by giving your vote to our proxy solicitor, Morrow & Co., LLC (“Morrow”) via telephone, call Morrow at 1-203-658-9400 before 7:00 p.m. (EDT) on June 9, 2014 and advise them that you wish to revoke or change your vote; or |
· | If your shares are registered in your name on our books, |
o | send a written notice of revocation to us, attention Corporate Secretary, which must be received prior to the close of voting at the Annual Meeting on June 10, 2014; or |
o | attend the Annual Meeting and vote in person (or send a personal representative with an appropriate proxy); or |
· | If you hold your shares in “street name,” |
o | contact the broker that delivered your Proxy Statement for instructions about how to change your vote; or |
o | if you wish to change your vote by attending the Annual Meeting, you must contact your broker for documentation – only your broker may change voting instructions with respect to shares held in “street name.” |
(1)
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Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (“Exchange Act”) and includes voting and investment power with respect to shares of Common Stock. Shares of Common Stock, and shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days after March 31, 2014 held by each person or group named above, are deemed outstanding for computing the percentage ownership of the person or group holding any options or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person or group. As of March 31, 2014, 85,052,281 shares of Common Stock were issued and outstanding. The address of each individual person is c/o Discovery Laboratories, Inc., 2600 Kelly Road, Suite 100, Warrington, Pennsylvania 18976-3622.
|
(2) | Common Stock Equivalents include shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days after March 31, 2014 held by each person or group named above. |
(3) | Total beneficial ownership shown in the table includes 8,333 shares held by or for the benefit of his spouse, as to which Dr. Rosenthale disclaims beneficial ownership. |
(4) | This information is based on the most recent Form 4s filed with the SEC by the Executives on March 10, 2014. |
(5) |
This information is as of December 31, 2013 and is based on a Schedule 13G/A filed with the SEC on February 14, 2014, by FMR LLC (“FMR”) and Edward C Johnson 3d, Chairman, with respect to (i) Fidelity Management & Research Company, a wholly-owned subsidiary of FMR and an investment adviser registered under the Investment Company Act of 1940 (“1940 Act”), which is the beneficial owner of 6,930,160 shares as a result of acting as investment adviser to various 1940 Act-registered investment companies; (ii) Fidelity SelectCo, LLC, as wholly-owned subsidiary of FMR and a 1940 Act-registered investment adviser that is the beneficial owner of 5,082,804 shares as a result of acting as investment adviser to various 1940 Act-registered investment companies; (iii) and Pyramis Global Advisors Trust Company, an indirect wholly-owned subsidiary of FMR and a bank as defined under §3(a)(6) of the Exchange Act that is the beneficial owner of 91,314 shares as a result of acting as investment manager of institutional accounts owning such shares. The filing indicates that no one person's interest in our Common Stock exceeds five percent of our total outstanding Common Stock.
|
(6) |
This information is as of December 31, 2013 and is based on a Schedule 13G filed with the SEC on February 14, 2014, by (i) Deerfield Mgmt, L.P., general partner of the entities identified in clauses (iv) through (vii) with respect to securities beneficially owned by such entities, (ii) Deerfield Management Company, L.P., an investment adviser for the entities identified in clauses (iv) through (vii) with respect to securities beneficially owned by such entities, (iii) James E. Flynn, (iv) Deerfield Special Situations Fund, L.P., (v) Deerfield Special Situations International Master Fund, L.P., (vi) Deerfield Private Design Fund II, L.P., (vii) Deerfield Private Design International II, L.P. The Common Stock Equivalents listed above consist of warrants to purchase 7,265,080 shares of our Common Stock that contain a provision restricting the exercise or conversion of such securities to the extent that, upon exercise or conversion, the number of shares then beneficially owned by the holder and its affiliates and any other person or entities with which such holder would constitute a group under §13(d) of the Exchange Act would exceed 9.985% of the total number of shares of our then outstanding Common Stock (the “Cap”). Accordingly, notwithstanding the number of shares reported, the reporting entities have disclaimed beneficial ownership of the shares underlying such warrants to the extent that the beneficial ownership of all reporting persons in the aggregate would exceed the Cap.
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(7) |
This information is as of December 31, 2013 and is based on a Schedule 13G filed with the SEC on February 14, 2014, by Broadfin Capital, LLC, Broadfin Healthcare Master Fund, Ltd., and Kevin Kotler.
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(8) |
This information is as of December 31, 2013 and is based on a Schedule 13G filed with the SEC on February 14, 2014 by DAFNA Capital Management, LLC, a 1940 Act registered investment adviser to DAFNA LifeScience Ltd., DAFNA LifeScience Market Neutral Ltd., and DAFNA LifeScience Select Ltd., and control persons Nathan Fischel and Fariba Ghodsian. Messrs. Fischel and Ghodsian expressly disclaim beneficial ownership of the securities owned by the funds.
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Name
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Age
|
Position with the Company
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John R. Leone
|
66
|
Chairman of the Board
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John G. Cooper
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55
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Director, President and Chief Executive Officer
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Joseph M. Mahady
|
61
|
Director
|
Bruce A. Peacock
|
62
|
Director
|
Marvin E. Rosenthale, Ph.D.
|
80
|
Director
|
· | overseeing our financial statements, system of internal controls, auditing, accounting and financial reporting processes; |
· | providing an independent, direct line of communication between the Board and our independent auditors; |
· | appointing, compensating, evaluating and, when appropriate, replacing our independent auditors; |
· | overseeing our tax compliance; |
· | reviewing with management and our independent auditors the annual audit plan; |
· | reviewing the Audit Committee Charter; |
· | reviewing and pre-approving audit and permissible non-audit services; and |
· | reviewing and approving all related-party transactions. |
· | review with management our compensation policies relating to executive and general compensation, including but not limited to cash bonus compensation, and equity and other incentive plans; |
· | review and discuss with management at least annually our corporate goals and objectives relating to compensation of executive officers and other senior officers; |
· |
evaluate performance of the CEO and other executives and review the CEO’s recommendations of the other senior officers in light of our goals and objectives and, based on that evaluation, determine the compensation of the CEO and other executive officers;
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· | engage and meet with independent compensation consultants as it deems necessary and appropriate to carry out its responsibilities; |
· | review and approve compensation arrangements for executive officers and other senior officers, including employment, severance and change in control agreements and any supplemental benefits; |
· | oversee key employee benefit programs, policies and plans relating to compensation and, where deemed appropriate, programs, policies and plans relating to our other employees; |
· | review, approve, and establish guidelines for the compensation of Board directors; and |
· | review and discuss with management our annual report and proxy statement with respect to executive compensation matters. |
· | evaluate annually the composition and organization of the Board and its committees in light of applicable rules and regulations, including but not limited to the listing requirements of Nasdaq, and make recommendations to the Board; |
· | determine criteria for selection of members of the Board, the Chairman of the Board, and members of the committees, and ensure that our Board members as a group represent a reasonable balance of professional, business and financial expertise and personal backgrounds; |
· | evaluate and recommend to the Board a nominee to serve as Chairman of the Board, directors to serve on the committees of the Board and directors to serve as chairmen of such committees; |
· | review and evaluate annually the performance of individual Board members proposed for reelection and make recommendations to the Board regarding the appropriateness of each director’s standing for reelection, and, at such other times as are appropriate, review and evaluate the conduct of a particular Board member, and, if deemed necessary, recommend to the Board such action, including termination of membership, in accordance with any applicable code of conduct or ethics or any corporate governance principles or guidelines adopted by the Board, for cause or other reason; |
· | review, evaluate and approve all nominees for election to the Board, verify their qualifications, experience and fitness for service, assess their individual profiles against the mix of skills, strengths and expertise of current Board members, and determine their willingness to serve as a director; |
· | identify, evaluate and approve nominees for election to the Board upon the resignation, removal of directors from the Board or creation of other vacancies; |
· | identify, evaluate and approve a slate of nominees for election to the Board at the Annual Meeting of Stockholders; |
· | evaluate all nominees submitted by stockholders for election to the Board, determine if such submissions comply with our Amended and Restated By-Laws (“By-Laws”) and all applicable rules and regulations, and, if such candidates meet the criteria established by the Nomination and Governance Committee, in its sole discretion, approve such nominees for election at the next Annual Meeting of Stockholders; and |
· | evaluate all stockholder proposals submitted to us, determine if such submissions are in compliance with the By-Laws and all applicable rules and regulations, and recommend appropriate action on each proposal to the Board. |
Name
|
Fees Earned or
Paid in Cash
|
Stock
Awards
(1)
|
Option
Awards
(2)
|
Total
|
||||||||||||
John R. Leone
|
$
|
72,884
|
$
|
8,000
|
$
|
19,931
|
$
|
100,815
|
||||||||
Joseph M. Mahady
|
42,556
|
8,000
|
90,131
|
140,687
|
||||||||||||
Bruce A. Peacock
|
52,333
|
8,000
|
19,931
|
80,264
|
||||||||||||
Marvin E. Rosenthale, Ph.D.
|
45,056
|
8,000
|
19,931
|
72,987
|
(1)
|
Represents the grant date fair value of the stock award, equivalent to the closing stock price on the grant date, computed in accordance with Accounting Standards Codification (ASC) Topic 718 “Stock Compensation”(ASC Topic 718). On June 11, 2013, the Compensation Committee approved stock awards for each director of 4,734 restricted stock units. All restricted stock units awarded in 2013 vest in full on the first year anniversary of the grant.
|
(2)
|
Represents the grant date fair value of the stock options computed in accordance with Accounting Standards Codification (ASC) Topic 718 “Stock Compensation” (ASC Topic 718). The assumptions utilized are described in Note 12, “Stock Options and Stock-based Employee Compensation,” to our consolidated financial statements for the year ended December 31, 2013, which are included in the accompanying 2013 Annual Report to Stockholders. The amounts reported in the table have not been paid to, nor realized by, the director. On January 3, 2013, the Compensation Committee approved a grant to Mr. Mahady upon his election to the Board of options to purchase 30,000 shares with an exercise price of $2.34. These options vest in three equal annual installments beginning on the first anniversary date of the grant. On June 11, 2013, the Compensation Committee approved grants for each director of options to purchase 15,000 shares with an exercise price of $1.69. These options vest in full on the first year anniversary of the grant. All options have a term of 10 years
.
|
Fee Category:
|
Fiscal 2013
|
% of Total
|
Fiscal 2012
|
% of Total
|
||||||||||||
|
|
|
|
|||||||||||||
Audit Fees
|
$
|
312,000
|
59
|
%
|
$
|
300,000
|
72
|
%
|
||||||||
Audit-Related Fees
|
175,000
|
33
|
%
|
60,000
|
14
|
%
|
||||||||||
Tax Fees
|
42,000
|
8
|
%
|
60,000
|
14
|
%
|
||||||||||
Total Fees
|
$
|
529,000
|
100
|
%
|
$
|
420,000
|
100
|
%
|
· |
As of March 31, 2014, the outstanding options held by our current directors and executives comprise approximately 2% of our outstanding shares;
|
· |
As of March 31, 2014, approximately 1.5 million shares (plus any shares that might in the future be returned to the 2011 Plan as a result of cancellations, expirations and forfeitures), representing 1.8% of our outstanding shares, are available for future grant under the 2011 Plan;
|
· |
As of March 31, 2014,
of the total options outstanding, 4,662,581, or approximately 84.9%, are held by current directors, management and employees;
|
· |
As of March 31, 2014, there were outstanding to all grantees under the 2011 Plan and all predecessor plans, including present and former directors, management, employees and current and past consultants, options to purchase 6,808,860 shares and 18,936 shares of restricted stock (subject to vesting), collectively representing approximately
8.0
% of our outstanding shares of Common Stock; and
|
· |
If the Plan Amendment is approved, the total shares under existing awards and shares available for grant will represent approximately 15.6% of our outstanding shares, of which approximately 8% are issued and outstanding and 7.6% remain available for future grant.
|
· | establish rules and guidelines for the administration of the 2011 Plan and amend, suspend or waive any such rules or guidelines; |
· | select the employees, directors and consultants to whom awards are granted and to make such grants; |
· | determine the size and types of awards to be granted and the number of shares covered by such awards; |
· | set the terms and conditions of such awards (including the prices, consideration to be paid, expiration dates and other material conditions upon which such awards may be exercised); |
· | prescribe award agreements evidencing or setting the terms of such awards (which need not be the same for each participant); |
· | determine whether, to what extent, and under what circumstances the awards may be settled or exercised in cash, shares, other securities or other awards; |
· | determine whether, to what extent, and under what circumstances awards may be canceled, forfeited or suspended; |
· | appoint agents that the Committee deems appropriate for the proper administration of the 2011 Plan and make any determination the Committee deems necessary or desirable for the administration of the Plan; and |
· | correct any defect, supply any omission or reconcile any inconsistency in the 2011 Plan or any award thereunder in a manner it deems desirable to carry the 2011 Plan into effect. |
· | achieving specified milestones in the discovery, development, commercialization or manufacturing of one or more of our product candidates; |
· | obtaining debt or equity financing; |
· | achieving personal management objectives; |
· | achieving sales, revenue, net income (before or after taxes), net earnings, earnings per share, return on total capital, return on equity, cash flow, cash flow from operations, operating profit and/or margin rate targets. |
· | no material amendment shall be made for which stockholder approval is required by law, regulation, or stock exchange; |
· | no amendment may increase the number of shares available for award under the 2011 Plan except through adjustments as described above; and |
· | no amendment will permit the re-pricing of options, stock appreciation rights or other stock-based awards (whether through replacement, cancellation and re-grant or by lowering the exercise price or grant price of a previously granted award). |
Name
|
Age
|
Position with the Company
|
Russell G. Clayton, D.O.
|
53
|
Senior Vice President, Research and Development
|
Kathryn A. Cole
|
48
|
Senior Vice President, Human Resources
|
John G. Cooper
|
55
|
President and Chief Executive Officer
|
Thomas C. Hoy
|
53
|
Vice President, Manufacturing Operations
|
Michael L. Magee
|
53
|
Vice President, Quality Operations
|
Thomas F. Miller, Ph.D., MBA
|
43
|
Senior Vice President and Chief Operating Officer
|
William C. Roberts
|
45
|
Vice President, Investor Relations and Corporate Communications
|
John A. Tattory
|
49
|
Senior Vice President and Chief Financial Officer
|
Mary B. Templeton, Esq.
|
67
|
Senior Vice President, General Counsel and Corporate Secretary
|
· | John G. Cooper – President, Chief Executive Officer, and Chief Financial Officer |
· | Thomas F. Miller, Ph.D., MBA – Senior Vice President and Chief Operating Officer |
· | Russell G. Clayton, D.O. – Senior Vice President, Research & Development |
· | Mary B. Templeton, Esq. – Senior Vice President, General Counsel and Corporate Secretary |
· | Providing a competitive total compensation package to enable us to attract, retain, and motivate qualified executives; |
· | Aligning compensation decisions with stockholder interests by tying executive compensation to attainment of goals and milestones that create stockholder value and enhance the long-term success of our business ( i.e. , pay for performance); |
· | Creating a direct link between stockholder and management interests by compensating executives with equity ownership; and |
· | Allowing the Compensation Committee of our Board of Directors to retain significant discretion to set and adjust Named Executive Officer compensation based on facts and circumstances unique to our Company during any given year. |
Compensation Component
|
Purpose
|
Basic Design
|
||
Base Salary
|
· |
Attract and retain executives
|
· |
Based on consideration of the scope of role and experience of the incumbent, and confirmed by assessment of industry pay practices
|
Annual Bonus
|
·
·
·
|
Attract and retain executives
Motivate executives to drive performance
Foster accountability for continued performance
|
· |
Target bonus set as percentage of base salary, generally payable in cash
|
· | No minimum guaranteed payout; bonuses approved at discretion of Compensation Committee | |||
· | Instead of cash, the annual bonus may instead be awarded in form of equity, or a combination of cash and equity |
Compensation Component
|
Purpose
|
Basic Design
|
||
Long-Term Equity Awards
|
·
·
·
·
|
Attract and retain executives
Motivate executives to drive performance
Foster accountability for continued performance
Align compensation with long-term stockholder growth
|
· |
Primarily options-based awards, vesting over three years in equal annual increments; executives are rewarded only if share value increases
|
· | No minimum guaranteed payout, and long-term equity awarded at discretion of Compensation Committee | |||
· | Under the 2011 Plan, options re-pricing requires stockholder approval | |||
· | SURFAXIN : SURFAXIN ® (lucinactant) Intratracheal Suspension was cleared by the FDA and we initiated its commercial launch. |
o | The United States Food and Drug Administration (FDA) granted us regulatory approval for SURFAXIN ® (lucinactant) Intratracheal Suspension for the prevention of respiratory distress syndrome (RDS) in premature infants at high risk for RDS in March 2012. However, our plans for the commercial introduction of SURFAXIN were delayed in the third quarter of 2012 when we determined that an update to SURFAXIN product specifications was needed, and submitted updated product specifications to the FDA. In April 2013, the FDA requested additional information, which we submitted in June 2013. The FDA approved our updated product specifications in October 2013 and we initiated the commercial launch of SURFAXIN in November 2013. |
· | AEROSURF : We progressed our AEROSURF development program to phase 2 clinical trials. |
o | We previously established a partnership with Battelle to develop and manufacture a clinic-ready CAG device. In the middle of 2013, we successfully validated performance of the CAG and initiated manufacture of a sufficient number of CAG devices to support the initial phase of our AEROSURF phase 2 clinical program. Additionally, with our CMO, we manufactured a sufficient clinical supply of our lyophilized KL 4 surfactant to support the initial phase of our clinical program. In October 2013, we submitted an investigational new drug (IND) application to the FDA for an AEROSURF phase 2a clinical trial, which the FDA cleared in November 2013. We are presently conducting the initial phase of the phase 2 clinical program. |
· | Strengthened Financial Position : We strengthened our financial position. |
o |
In February 2013, we entered into a loan agreement with affiliates of Deerfield Management Company, L.P. (“Deerfield”) and received advances totaling $30 million. Also in February 2013, we entered into an At-the-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated (“Stifel”), under which Stifel, as our exclusive agent, may sell through an “at-the-market” program (ATM Program), at such times that we may elect in our sole discretion, during a three-year term, up to a maximum of $25,000,000 of our common stock. We also raised aggregate gross proceeds of $75.8 million through public offerings of our Common Stock, including approximately $2 million under our ATM program. These transactions significantly strengthened our financial position.
|
Avanir Pharmaceuticals
|
Depomed
|
Savient Pharmaceuticals
|
|
|
|
Cadence Pharmaceuticals
|
Dyax Corp.
|
Supernus Pharmaceuticals
|
|
|
|
Corcept Therapeutics
|
Horizon Pharma
|
Transcept Pharmaceuticals
|
|
|
|
Cornerstone Therapeutics
|
Insmed
|
XenoPort
|
|
|
|
Cumberland Pharmaceuticals
|
NuPathe
|
Zogenix
|
For
|
Against
|
Abstain
|
Broker Non-Votes
|
8,004,985
|
10,868,167
|
258,990
|
16,431,917
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
(1)
|
Option
Award
($)
(2)
|
All Other
Compensation
($)
(3)
|
Total
($)
|
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
John G. Cooper
|
2013
|
$
|
399,508
|
$
|
93,750
|
$
|
649,425
|
$
|
–
|
$
|
1,142,683
|
||||||||||
President, Chief Executive
|
2012
|
331,667
|
130,000
|
276,055
|
–
|
737,722
|
|||||||||||||||
Officer and Chief Financial
|
2011
|
325,000
|
15,000
|
365,125
|
–
|
705,125
|
|||||||||||||||
Officer
(4)
|
|
||||||||||||||||||||
|
|
||||||||||||||||||||
Thomas F. Miller
|
2013
|
321,250
|
59,000
|
371,100
|
–
|
751,350
|
|||||||||||||||
Senior Vice President and
|
2012
|
306,667
|
100,000
|
212,350
|
–
|
619,017
|
|||||||||||||||
Chief Operating Officer
|
2011
|
300,000
|
40,000
|
292,100
|
–
|
632,100
|
|||||||||||||||
|
|
||||||||||||||||||||
Russell G. Clayton
|
2013
|
285,125
|
51,126
|
278,325
|
–
|
614,576
|
|||||||||||||||
Senior Vice President
|
2012
|
273,333
|
105,000
|
169,880
|
–
|
548,213
|
|||||||||||||||
Research and Development
|
2011
|
261,667
|
45,000
|
182,563
|
–
|
489,230
|
|||||||||||||||
|
|
||||||||||||||||||||
Mary B. Templeton, Esq.
|
2013
|
265,850
|
37,617
|
148,440
|
–
|
451,907
|
|||||||||||||||
Senior Vice President,
|
2012
|
258,333
|
80,000
|
116,793
|
–
|
455,126
|
|||||||||||||||
General Counsel and
|
2011
|
243,864
|
15,000
|
146,050
|
–
|
404,914
|
|||||||||||||||
Corporate Secretary
|
|
(1)
|
2013 bonus amounts include bonuses paid in April 2013 and March 2014.
|
(2)
|
Represents the grant date fair value of the stock options computed in accordance with ASC Topic 718. The assumptions that we utilized are described in Note 12, “Stock Options and Stock-based Employee Compensation,” to our consolidated financial statements for the year ended December 31, 2013, which are included in the 2013 Annual Report to Stockholders that accompanies this Proxy Statement. The amounts reported in this column have not been paid to, nor realized by, the Named Executive Officer. The Compensation Committee approved the following grants to Mr. Cooper, Dr. Miller, Mr. Clayton, and Ms. Templeton: March 26, 2013, options to purchase 350,000, 200,000, 150,000, and 80,000 shares, respectively, with an exercise price of $2.36; on May 4, 2012 an option to purchase 130,000, 100,000, 80,000, and 55,000 shares, respectively, with an exercise price of $2.71; and on October 7, 2011, an option to purchase 250,000, 200,000, 125,000, and 100,000 shares, respectively, with an exercise price of $1.83. All options vest in three equal annual installments beginning with the first year anniversary of the date of grant. All options have a term of 10 years.
|
(3)
|
During 2013, 2012, and 2011, the aggregate perquisites and other personal benefits afforded to each Named Executive Officer was less than $10,000, calculated as the incremental cost of providing such benefits to each Named Executive Officer, in accordance with SEC disclosure rules. This amount does not include the cost of medical and health benefits and our Company’s match under our 401(k) Plan, which are not reportable, in accordance with SEC disclosure rules, as such benefits are available to all of the our employees.
|
(4)
|
Mr. Cooper was elected to serve as our President and Chief Executive Officer and Chief Financial Officer on January 3, 2013. On March 21, 2014, Mr. Cooper relinquished the role of Chief Financial Officer.
|
Named Executive Officer
|
Grant Date
|
All Other Option
Awards; Number of
Securities Under-
lying Options
(#)
(1)
|
Exercise Price of
Option Awards
($/Sh)
|
Grant Date Fair
Value of Stock and
Option Awards
(2)
|
|||||||||
|
|
|
|
|
|||||||||
John G. Cooper
|
3/26/13
|
350,000
|
$
|
2.36
|
$
|
649,425
|
|||||||
|
|
||||||||||||
Thomas F. Miller
|
3/26/13
|
200,000
|
$
|
2.36
|
371,100
|
||||||||
|
|
||||||||||||
Russell G. Clayton
|
3/26/13
|
150,000
|
$
|
2.36
|
278,325
|
||||||||
|
|
||||||||||||
Mary B. Templeton
|
3/26/13
|
80,000
|
$
|
2.36
|
148,440
|
(1) | Options were issued pursuant to our 2011 Plan and vest in three successive equal annual installments beginning on the first year anniversary of the grant. |
(2) | Represents the grant date fair value of the stock options computed in accordance with ASC Topic 718. See Note 12 – “Stock Options and Stock-based Employee Compensation” to our consolidated financial statements for the year ended December 31, 2013, in the 2013 Form 10-K for a discussion of assumptions utilized. There can be no assurance that the stock options will ever be exercised or that the FAS 123R amounts set forth above will ever be realized. |
· | The 2013 Executive Agreements were effective April 1, 2013, and have an initial term of two years expiring on March 31, 2015. On each April 1 beginning on April 1, 2015, the term will automatically be extended for one additional year unless, at least 90 days prior to the expiration date, either party provides notice of non-renewal to the other party. The 2013 Executive Agreements include a 12-month post-employment noncompetition agreement, an 18‑month non-solicitation agreement, and provide for confidentiality and the assignment to us of all intellectual property. The base salaries for Mr. Cooper, Drs. Miller and Clayton, and Ms. Templeton, which were unchanged on December 31, 2013, were $400,000, $325,000, $288,500 and $267,800, respectively. Effective March 16, 2014, Ms. Templeton’s base salary was adjusted to $270,000. Each executive has a target annual bonus (Annual Bonus Amount), which is a percent of base salary and is awarded at the discretion of the Compensation Committee. The Annual Bonus Amounts for Mr. Cooper, Drs. Miller and Clayton, and Ms. Templeton are 50%, 35%, 30% and 30%, respectively. |
· | Upon termination by us without Cause or by the executive for Good Reason (in each case as defined in the 2013 Executive Agreements), in addition to any amounts or benefits that are due under any of our vested plans or other policy, on the condition that the executive enters into a separation agreement containing a plenary release of claims in a form acceptable to us, each executive will be entitled to: (i) a pro rata bonus equal to a percentage of the executive’s Annual Bonus Amount determined by dividing the total actual bonuses paid to other contract executives for the year in which the termination occurs by the aggregate of such other contract executives’ total target bonuses for that year, multiplied by a fraction the numerator of which is the number of days the executive was employed in the year of termination and the denominator of which is 365, payable at the time that other contract executives are paid bonuses with respect to the year of termination; (ii) a severance amount equal to one (1.5 for Mr. Cooper) times the sum of the executive’s base salary then in effect (determined without regard to any reduction constituting Good Reason) and the Annual Bonus Amount, payable in equal installments from the date of termination to the date that is 12 months (18 months for Mr. Cooper) after the date of termination (the Severance Period), provided, that no installments shall be paid until the plenary release has become final, binding and irrevocable; and (iii) at the time that the plenary release becomes final, all vested stock options, restricted stock grants and other similar equity awards held by the executive (Executive Equity Awards) shall continue to be exercisable during the Severance Period. For Mr. Cooper, his Executive Equity Awards shall continue to vest for a period of 18 months and be exercisable for a period of 36 months after the date of termination. In addition, during the Severance Period, if the executive elects to continue medical benefits through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), we will continue to pay our costs of the executive’s benefits as in effect on the date of termination as such benefits are provided to active employees. If COBRA coverage is unavailable, we will reimburse the executive an amount which, after taxes, is sufficient to purchase coverage that is substantially equivalent to the coverage available to comparable active employees on the date of termination, reduced by the amount that would be paid by comparable active employees, provided that our obligation to provide benefits shall cease or be reduced to the extent that a subsequent employer provides substantially similar coverages. All of our obligations to an executive shall cease if at any time during the Severance Period the executive engages in a material breach of the 2013 Executive Agreement and fails to cure such breach within five business days after receipt from us of notice of such breach. |
· | Upon a Change of Control (as defined in the 2013 Executive Agreements) and assuming the executive remains employed, (i) the term of the 2013 Executive Agreements (if shorter) shall be automatically extended until the second anniversary of the date of the Change of Control; (ii) during the remaining term of the 2013 Executive Agreements (as extended), and provided that an executive is employed on the last day of a fiscal year ending in that period, the executive will be entitled to an annual bonus at least equal to the Annual Bonus Amount, payable no later than March 15 in the next succeeding fiscal year; (iii) on the date of the Change of Control, Executive Equity Awards shall accelerate and become fully vested and any restrictions under restricted stock agreements will be lifted; and (iv) if in connection with any Change of Control, our stockholders may receive cash, securities or other consideration in exchange for, or in respect of, our Common Stock, an executive shall be permitted to exercise his or her Executive Equity Awards in order to be eligible to receive the same per share consideration made available to other stockholders; any exercised options shall terminate and cease to be outstanding after the date of the Change of Control, except to the extent assumed by a successor corporation (or its parent) or otherwise expressly continued in full force and effect pursuant to the terms of such Change of Control. |
· | Upon termination in connection with a Change in Control, in addition to the benefits that arise upon a Change of Control and any benefits that are due to an executive under any vested plans or other policies, the executive shall be entitled to: (i) a pro rata bonus equal to the executive’s Annual Bonus Amount multiplied by a fraction the numerator of which is the number of days the executive was employed in the year of termination and the denominator of which is 365, payable in a lump sum within 10 days after the date of termination; and (ii) a severance amount equal to 1.5 (2.0 for Mr. Cooper) times the sum of the executive’s base salary then in effect (determined without regard to any reduction constituting Good Reason) and the Annual Bonus Amount, payable in a lump sum within 10 days after the date of termination except in certain circumstances. In addition, if the executive elects to continue medical benefits through COBRA, for a period of 18 months (24 months for Mr. Cooper), we will continue to pay our costs of the executive’s benefits as in effect on the date of termination as such benefits are provided to active employees. If COBRA coverage is unavailable, we will reimburse the executive an amount which, after taxes, is sufficient to purchase coverage that is substantially equivalent to the coverage available to comparable active employees on the date of termination, reduced by the amount that would be paid by comparable active employees, provided that our obligation to provide benefits shall cease or be reduced to the extent that a subsequent employer provides substantially similar coverages. All of our obligations to an executive shall cease if at any time during the Severance Period the executive engages in a material breach of the 2013 Executive Agreement and fails to cure such breach within five business days after receipt from us of notice of such breach. If the foregoing payments shall be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax, they will be automatically be reduced to the extent and in the manner provided in the 2013 Executive Agreements. |
Option Awards
|
||||||||||||||
Named
Executive
Officer
|
No. of Securities
Underlying
Unexercised Options
(#)
Exercisable
|
No. of Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)*
|
Option
Expiration
Date
|
||||||||||
|
||||||||||||||
John G. Cooper
|
5,000
|
(1)
|
97.05
|
8/12/14
|
||||||||||
|
5,000
|
(3)
|
135.30
|
12/17/14
|
||||||||||
|
3,333
|
(4)
|
105.15
|
1/3/16
|
||||||||||
|
16,666
|
(4)
|
33.75
|
5/17/16
|
||||||||||
|
13,333
|
(4)
|
36.90
|
12/15/16
|
||||||||||
|
10,667
|
(4)
|
49.05
|
6/21/17
|
||||||||||
|
10,000
|
(4)
|
39.15
|
12/11/17
|
Option Awards
|
||||||||||||||
Named
Executive
Officer
|
No. of Securities
Underlying
Unexercised Options
(#)
Exercisable
|
No. of Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)*
|
Option
Expiration
Date
|
||||||||||
|
8,889
|
(2)
|
18.15
|
12/12/18
|
||||||||||
|
17,778
|
(2)
|
28.95
|
12/12/18
|
||||||||||
|
166,667
|
(2)
|
83,333
|
(2)
|
1.83
|
10/7/21
|
||||||||
|
43,334
|
(2)
|
86,666
|
(2)
|
2.71
|
5/4/22
|
||||||||
|
350,000
|
(2)
|
2.36
|
3/26/23
|
||||||||||
|
||||||||||||||
Thomas F. Miller
|
2,333
|
(2)
|
118.50
|
8/31/14
|
||||||||||
|
1,666
|
(2)
|
135.30
|
12/17/14
|
||||||||||
|
2,000
|
(4)
|
100.35
|
6/10/15
|
||||||||||
|
2,333
|
(4)
|
105.15
|
1/3/16
|
||||||||||
|
4,667
|
(4)
|
21.00
|
6/12/16
|
||||||||||
|
1,000
|
(4)
|
29.85
|
7/6/16
|
||||||||||
|
6,667
|
(4)
|
36.90
|
12/15/16
|
||||||||||
|
5,333
|
(4)
|
49.05
|
6/21/17
|
||||||||||
|
7,334
|
(4)
|
39.15
|
12/11/17
|
||||||||||
|
3,333
|
(2)
|
18.15
|
12/12/18
|
||||||||||
|
6,666
|
(2)
|
28.95
|
12/12/18
|
||||||||||
|
133,334
|
(2)
|
66,666
|
(2)
|
1.83
|
10/7/21
|
||||||||
|
33,334
|
(2)
|
66,666
|
(2)
|
2.71
|
5/4/22
|
||||||||
|
200,000
|
(2)
|
2.36
|
3/26/23
|
||||||||||
|
||||||||||||||
Russell G. Clayton
|
1,667
|
(2)
|
103.35
|
12/1/15
|
||||||||||
|
5,000
|
(4)
|
33.75
|
5/17/16
|
||||||||||
|
666
|
(4)
|
29.85
|
7/6/16
|
||||||||||
|
1,333
|
(4)
|
24.30
|
9/8/16
|
||||||||||
|
1,333
|
(4)
|
36.90
|
12/15/16
|
||||||||||
|
1,334
|
(4)
|
52.65
|
6/19/17
|
||||||||||
|
3,334
|
(4)
|
39.15
|
12/11/17
|
||||||||||
|
2,667
|
(2)
|
28.95
|
9/26/18
|
||||||||||
|
1,333
|
(2)
|
18.15
|
12/12/18
|
||||||||||
|
83,334
|
(2)
|
41,666
|
(2)
|
1.83
|
10/7/21
|
||||||||
|
26,667
|
(2)
|
53,333
|
(2)
|
2.71
|
5/4/22
|
||||||||
|
150,000
|
(2)
|
2.36
|
3/26/23
|
||||||||||
|
||||||||||||||
Mary B. Templeton
|
3,333
|
(4)
|
115.50
|
3/27/16
|
||||||||||
|
3,333
|
(4)
|
33.75
|
5/17/16
|
||||||||||
|
4,667
|
(4)
|
36.90
|
12/15/16
|
||||||||||
|
4,000
|
(4)
|
49.05
|
6/21/17
|
||||||||||
|
4,667
|
(4)
|
39.15
|
12/11/17
|
||||||||||
|
2,222
|
(2)
|
18.15
|
12/12/18
|
||||||||||
|
4,444
|
(2)
|
28.95
|
12/12/18
|
||||||||||
|
66,667
|
(2)
|
33,333
|
(2)
|
1.83
|
10/7/21
|
||||||||
|
18,334
|
(2)
|
36,666
|
(2)
|
2.71
|
5/4/22
|
||||||||
|
80,000
|
(2)
|
2.36
|
3/26/23
|
*
|
Where applicable, this price has been adjusted to reflect a 1-for-15 reverse stock split effective December 2010.
|
(1) | These options vested and became exercisable as follows: one fourth on the date of grant and thereafter in 36 equal installments at the close of each of the following 36 months. These options expire on the tenth anniversary of the date of grant. |
(2) | These options vest and become exercisable in three equal installments on the first three anniversaries of the date of grant, and expire on the tenth anniversary of the date of grant. |
(3) | As granted, these options vested and became exercisable as follows: one fourth on the date of grant and thereafter in 36 equal installments at the close of each of the following 36 months. In December 2005, the Compensation Committee accelerated the vesting of all stock options that at the time had an exercise price of $135.30 or greater, subject to a written “lock-up” agreement, which has since expired. These options expire on the tenth anniversary of the date of grant. |
(4)
|
These options vest and become exercisable as follows: one fourth on the date of grant and thereafter in three equal installments on the first three anniversaries of the date of grant, and expire on the tenth anniversary of the date of grant.
|
Name and Type of
Termination or Change in
Control
|
Severance
|
Bonus
|
Equity
Acceleration
(3)
|
Other
Benefits
(9)
|
TOTAL
(10)
|
|||||||||||||||
|
|
|
|
|||||||||||||||||
John G. Cooper
|
|
|
|
|
|
|||||||||||||||
Change in Control
|
–
|
200,000
|
(1)
|
35,000
|
–
|
235,000
|
||||||||||||||
|
||||||||||||||||||||
Termination by Company
|
||||||||||||||||||||
– Change in Control
(4)
|
1,200,000
|
(5)
|
200,000
|
(1)
|
35,000
|
130,861
|
1,565,861
|
|||||||||||||
– for Cause
|
–
|
–
|
–
|
102,975
|
102,975
|
|||||||||||||||
– without Cause
|
900,000
|
(7)
|
109,261
|
(2)
|
35,000
|
123,889
|
1,168,150
|
|||||||||||||
|
||||||||||||||||||||
Termination by Executive
|
||||||||||||||||||||
– without Good Reason
|
–
|
–
|
–
|
102,975
|
102,975
|
|||||||||||||||
– for Good Reason
|
900,000
|
(7)
|
109,261
|
(2)
|
35,000
|
123,889
|
1,168,150
|
|||||||||||||
|
||||||||||||||||||||
Death or Disability
|
–
|
–
|
35,000
|
102,975
|
137,975
|
|||||||||||||||
|
||||||||||||||||||||
Thomas F. Miller
|
||||||||||||||||||||
Change in Control
|
–
|
113,750
|
(1)
|
28,000
|
–
|
141,750
|
||||||||||||||
|
||||||||||||||||||||
Termination by Company
|
||||||||||||||||||||
– Change in Control
(4)
|
658,125
|
(6)
|
113,750
|
(1)
|
28,000
|
93,478
|
893,353
|
|||||||||||||
– for Cause
|
–
|
–
|
–
|
53,462
|
53,462
|
|||||||||||||||
– without Cause
|
438,750
|
(8)
|
58,920
|
(2)
|
–
|
80,139
|
577,809
|
|||||||||||||
|
||||||||||||||||||||
Termination by Executive
|
||||||||||||||||||||
– without Good Reason
|
–
|
–
|
–
|
53,462
|
53,462
|
|||||||||||||||
– for Good Reason
|
438,750
|
(8)
|
58,920
|
(2)
|
–
|
80,139 |
577,809
|
|||||||||||||
|
||||||||||||||||||||
Death or Disability
|
–
|
–
|
28,000
|
53,462
|
81,462
|
|||||||||||||||
|
||||||||||||||||||||
Russell G. Clayton
|
||||||||||||||||||||
Change in Control
|
–
|
86,550
|
(1)
|
17,500
|
–
|
104,050
|
||||||||||||||
|
||||||||||||||||||||
Termination by Company
|
||||||||||||||||||||
– Change in Control
(4)
|
562,575
|
(6)
|
86,550
|
(1)
|
17,500
|
52,355
|
718,980
|
|||||||||||||
– for Cause
|
–
|
–
|
–
|
12,115
|
12,115
|
|||||||||||||||
– without Cause
|
375,050
|
(8)
|
43,671
|
(2)
|
–
|
38,941
|
457,662
|
|||||||||||||
|
||||||||||||||||||||
Termination by Executive
|
||||||||||||||||||||
– without Good Reason
|
–
|
–
|
–
|
12,115
|
12,115
|
|||||||||||||||
– for Good Reason
|
375,050
|
(8)
|
43,671
|
(2)
|
–
|
38,941
|
457,662
|
Name and Type of
Termination or Change in
Control
|
Severance
|
Bonus
|
Equity
Acceleration
(3)
|
Other
Benefits
(9)
|
TOTAL
(10)
|
|||||||||||||||
Death or Disability
|
–
|
–
|
17,500
|
15,115
|
29,615
|
|||||||||||||||
|
||||||||||||||||||||
Mary B. Templeton, Esq.
|
||||||||||||||||||||
Change in Control
|
–
|
80,340
|
(1)
|
14,000
|
–
|
94,340
|
||||||||||||||
|
||||||||||||||||||||
Termination by Company
|
||||||||||||||||||||
– Change in Control
(4)
|
522,210
|
(6)
|
80,340
|
(1)
|
14,000
|
69,016
|
685,566
|
|||||||||||||
– for Cause
|
–
|
–
|
–
|
37,954
|
37,954
|
|||||||||||||||
– without Cause
|
348,140
|
(8)
|
42,311
|
(2)
|
–
|
58,662
|
449,113
|
|||||||||||||
|
||||||||||||||||||||
Termination by Executive
|
||||||||||||||||||||
– without Good Reason
|
–
|
–
|
–
|
37,954
|
37,954
|
|||||||||||||||
– for Good Reason
|
348,140
|
(8)
|
42,311
|
(2)
|
–
|
58,662
|
449,113
|
|||||||||||||
|
||||||||||||||||||||
Death or Disability
|
–
|
–
|
14,000
|
37,954
|
51,954
|
(1)
|
Upon a change in control and assuming that the executive continues to be employed, the executive shall be entitled to a bonus for the fiscal years ending during the two years following the date of termination at least equal to the Annual Bonus Amount, payable no later than March 15 of the following fiscal year. The Annual Bonus Amounts for Mr. Cooper, Dr. Miller, Dr. Clayton and Ms. Templeton are 50%, 35%, 30% and 30%, respectively, of their individual base salaries ($400,000, $325,000, $288,500 and $267,800, respectively). In addition, upon a termination in connection with a Change of Control, the executive shall be entitled to a bonus equal to the Annual Bonus Amount prorated for the number of days employed in the year of the date of termination.
|
(2)
|
Upon termination by us without Cause or by the executive for Good Reason, this executive is entitled to a percentage of his or her Annual Bonus Amount that equals that percentage of aggregate Annual Bonus Amounts actually paid to the other contract executives with respect to the year in which the termination occurs, prorated for the number of days the executive is employed in the year the termination occurs and payable on the date that other contract executives are paid their bonuses with respect to such year. For example, if all other executive officers are paid total aggregate bonuses of $100,000 and the total aggregate Annual Bonus Amounts is $200,000, the executive will be entitled to 50% of his or her Annual Bonus Amount, prorated for the number of days employed in the year of the termination occurs.
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(3)
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For the purpose of this presentation, the value of equity acceleration is calculated by multiplying the number of stock options that are subject to acceleration by the difference between the closing price of our Common Stock on December 31, 2013 and the exercise or purchase price of the stock awards. If the exercise or purchase price of the stock awards was greater than the closing price of our Common Stock on December 31, 2013, no value for that stock award is included in the presentation. The number of shares remaining unvested under each executive's stock option is set forth in the “Outstanding Equity Awards” table. As of December 31, 2013, each of the executives had unvested shares arising from the following grants: (i) a grant issued on 10/7/2011 with a strike price of $1.83, (ii) a grant issued on 5/4/2012 with a strike price of $2.71, and (iii) a grant issued on 3/26/2013 with a strike price of $2.36. Solely with respect to Mr. Cooper, under the terms of his employment agreement, all unvested shares of restricted stock and stock options would continue to vest over a period of 18 months following a termination by us without Cause or by Mr. Cooper for Good Reason, the value of which is reported in this column.
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(4)
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The executives’ employment agreements provide that the termination is considered “termination in connection with a change of control” if employment is terminated by us during the 24 months following the change of control other than for Cause or by the executive for Good Reason.
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(5)
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Upon termination in connection with a Change of Control, this executive is entitled to a severance amount equal to two times the sum of the executive's base salary and the Annual Bonus Amount.
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(6)
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Upon termination in connection with a Change of Control, this executive is entitled to a severance equal to one and one half times the sum of the executive's base salary and the annual bonus amount.
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(7)
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Upon termination by us without Cause or by the executive for Good Reason, this executive is entitled to a severance amount equal to one and one half times the sum of the executive's base salary and the Annual Bonus Amount.
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(8)
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Upon termination by us without Cause or by the executive for Good Reason, this executive is entitled to a severance amount equal to the sum of the executive's base salary and the Annual Bonus Amount.
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(9)
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This amount consists of accrued vacation, if any, payable at the time of termination and the value of any continuation of health benefits provided to the executive under the 2013 Executive Agreements. Upon termination in connection with a Change of Control, the executives are entitled to continuation of health benefits provided prior to the date of termination for the executive and the executive's participating family members at the time of termination (“Benefit Continuation”) for a period of up to 24 months for Mr. Cooper and 18 months for each of Drs. Miller and Clayton and Ms. Templeton. Upon termination by us without Cause or by the executive for Good Reason, the executives are entitled to Benefit Continuation for a period of 18 months for Mr. Cooper and 18 months for each of Drs. Miller and Clayton and Ms. Templeton.
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(10)
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Upon a change in control, the executives may be subject to certain excise taxes under Section 4999 of the Internal Revenue Code. The executive’s employment agreement provides that in such event, payments will automatically be reduced as provided in the employment agreements.
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By Order of the Board of Directors
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Mary B. Templeton, Esq.
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Senior Vice President, General Counsel &
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Corporate Secretary
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Warrington, Pennsylvania
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April [30], 2014
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By:
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Name:
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Title:
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