UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
þ
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 Pursuant to Rule 14a-11(c) or Rule 14a-12
MIDDLEBROOK PHARMACEUTICALS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
|
|
No fee required.
|
|
o
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
|
|
(1)
|
|
Title of each class of securities to which transaction applies:
|
|
|
(2)
|
|
Aggregate number of securities to which transaction applies:
|
|
|
(3)
|
|
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
|
|
|
(4)
|
|
Proposed maximum aggregate value of transaction:
|
|
|
(5)
|
|
Total fee paid:
|
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.
|
|
(1)
|
|
Amount previously paid:
|
|
|
(2)
|
|
Form, schedule or registration statement no.:
|
|
|
(3)
|
|
Filing party:
|
|
|
(4)
|
|
Date filed:
|
Dear Stockholder:
You are cordially invited to attend our Annual Meeting of
Stockholders on Tuesday, June 23, 2009 at 8:30 a.m.,
local time, at our headquarters located at 7 Village Circle,
Suite 100, Westlake, Texas 76262.
The annual meeting notice and proxy statement on the following
pages cover the formal business of the annual meeting, which
includes proposals to:
1. elect three director nominees named in the attached
proxy statement for a term ending in 2012;
2. amend MiddleBrooks certificate of incorporation
and bylaws to declassify our board of directors;
3. amend MiddleBrooks Stock Incentive Plan to
increase the number of shares reserved for issuance thereunder
by 3,500,000 shares; and
4. ratify the selection of PricewaterhouseCoopers LLP, as
MiddleBrooks independent registered public accounting firm.
Your vote is important. Whether or not you are able to attend,
it is important that your shares be represented at the annual
meeting. We ask that you promptly mark, sign, date and return
the enclosed proxy card in the envelope provided, or instruct us
by telephone or via the Internet as to how you would like to
vote your shares. Returning your proxy card will not prevent you
from voting in person at the annual meeting if you are present
and choose to do so. We urge you to participate in electing
directors and deciding the other matters described in more
detail in the attached annual meeting notice and proxy statement
that follow.
Thank you for your continued support of MiddleBrook
Pharmaceuticals and we look forward to your attendance at the
annual meeting.
Sincerely yours
John Thievon
President and Chief Executive Officer
This proxy statement is dated April 30, 2009 and is first
being mailed to stockholders on or about May 18, 2009
7 Village Circle, Suite 100, Westlake, Texas
76262 (817) 837-1200 (817) 582-0400
(Fax)
TABLE OF CONTENTS
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
to be held on June 23, 2009
The 2009 Annual Meeting of Stockholders of MiddleBrook
Pharmaceuticals, Inc., a Delaware corporation, will be held at
our headquarters located at 7 Village Circle, Suite 100,
Westlake, Texas 76262 on Tuesday, June 23, 2009 at 8:30 am,
local time, for the following purposes:
1. to elect three director nominees named in the attached
proxy statement for a term ending in 2012;
2. to amend MiddleBrooks Certificate of Incorporation
and Bylaws to declassify our board of directors;
3. to amend the MiddleBrook Pharmaceuticals, Inc. Stock
Incentive Plan to increase the number of shares of common stock
reserved for issuance thereunder by 3,500,000 shares from
16,348,182 shares to 19,848,182 shares;
4. to ratify the selection of PricewaterhouseCoopers LLP as
MiddleBrooks independent registered public accounting
firm; and
5. to conduct such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
Your attention is directed to the proxy statement accompanying
this notice for a more complete description of the matters to be
acted on at the meeting. The board of directors has fixed the
close of business on Tuesday, April 28, 2009, as the record
date for determining stockholders entitled to notice of, and to
vote at, the annual meeting. Each outstanding share of common
stock is entitled one vote on all matters to be voted on at the
meeting. A list of the stockholders as of the record date will
be available for inspection by stockholders at our offices
during normal business hours for a period of 10 days prior
to the annual meeting.
All stockholders are cordially invited to attend the annual
meeting. It is important that your shares be represented and
voted at the meeting. Please note that attendance at the meeting
will be limited to stockholders of record as of the record date
(or their duly authorized representatives). If you wish to
attend the meeting and your shares are held by a bank or broker,
please bring to the meeting your bank or brokerage statement
evidencing your beneficial ownership of our stock and a form of
government issued photo identification.
You can vote your shares by proxy by using one of the following
methods: mark, sign, date and promptly return the enclosed proxy
card in the postage-paid envelope furnished for that purpose, or
vote by telephone or the Internet using the instructions on the
enclosed proxy card. Any proxy may be revoked in the manner
described in the accompanying proxy statement at any time
prior to its exercise at the annual meeting of stockholders. Any
stockholder present at the meeting may withdraw his or her proxy
and vote personally on any matter brought before the meeting.
If your shares are held in street name by a brokerage firm, your
broker will supply you with a proxy to be returned to the
brokerage firm. It is important that you return the form to the
brokerage firm as quickly as possible so that the brokerage firm
may vote your shares. Please note, however, that if your shares
are held of record by a broker, bank or other nominee, you may
not vote your shares in person at the meeting unless you obtain
a power of attorney or legal proxy from your broker authorizing
you to vote the shares, and you present this power of attorney
or proxy at the meeting.
By Order of the Board of Directors,
Brad Cole
Secretary
Westlake, Texas
April 30, 2009
Important Notice Regarding the Availability of Proxy
Materials for the Stockholder Meeting to be held on
June 23, 2009. The 2008 Annual Report, the Annual Report on
Form 10-K
for the year ended December 31, 2008, and the Proxy
Statement are available at
http://proxy.middlebrookpharma.com.
MIDDLEBROOK
PHARMACEUTICALS, INC.
7 Village Circle,
Suite 100
Westlake, Texas 76262
PROXY
STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
to be held on June 23, 2009
This Proxy Statement is first being mailed on or about
May 18, 2009, to the stockholders of MiddleBrook
Pharmaceuticals, Inc., a Delaware corporation, which we refer to
as MiddleBrook, we, us,
our, or the Company, in connection with
the solicitation of proxies by our board of directors for use at
the 2009 Annual Meeting of Stockholders and at any adjournment
or postponement thereof. Our meeting will be held on Tuesday,
June 23, 2009, at 8:30 a.m. local time, at our
headquarters located at 7 Village Circle, Suite 100,
Westlake, Texas 76262.
Our executive offices are located at 7 Village Circle,
Suite 100, Westlake, Texas 76262, and our telephone number
is
(817) 837-1200.
A list of stockholders entitled to vote at the annual meeting
will be available for examination by any stockholder at our
offices for a period of ten days prior to the annual meeting and
at the annual meeting itself.
Important Notice Regarding the Availability of Proxy
Materials for the Stockholder Meeting to be held on
June 23, 2009. The 2008 Annual Report, the Annual Report on
Form 10-K
for the year ended December 31, 2008, and the Proxy
Statement are available at
http://proxy.middlebrookpharma.com.
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING
What is
the purpose of the annual meeting?
At the annual meeting, our stockholders will be asked to:
1. Elect three director nominees named below for a term
ending in 2012;
2. Amend MiddleBrooks certificate of incorporation
and bylaws to declassify our board of directors;
3. Amend the MiddleBrook Stock Incentive Plan to increase
the number of shares reserved for issuance thereunder by
3,500,000 shares; and
4. Ratify the selection of PricewaterhouseCoopers LLP as
our independent registered public accounting firm.
Stockholders will also transact any other business that may
properly come before the meeting. Members of our board of
directors and management, and representatives of
PricewaterhouseCoopers LLP, our independent registered public
accounting firm, will be present at the meeting to respond to
appropriate questions from stockholders.
Why am I
receiving this proxy statement and proxy card?
You are receiving this proxy statement and proxy card because
you own shares of MiddleBrook common stock. This proxy statement
describes matters on which we would like you to vote at the
annual meeting. It also provides information to you regarding
these matters so that you can make an informed decision.
What is a
proxy?
A proxy is your legal designation of another person, referred to
as a proxy, to vote your shares of stock. The
written document providing notice of the annual meeting and
describing the matters to be considered and voted on is called a
proxy statement. The document used to designate a
proxy to vote your shares of stock is called a
proxy card. Our board of directors has
designated two of our officers, David Becker, our Executive Vice
President, Chief Financial Officer, and Brad Cole, our Senior
Vice President, General Counsel and Secretary, as proxies for
the annual meeting.
Who can
attend the annual meeting?
All holders of shares of stock of MiddleBrook Pharmaceuticals,
as of the record date, Tuesday, April 28, 2009, may attend
the annual meeting.
How many
shares must be present to hold the meeting?
A quorum must be present at the annual meeting for any business
to be conducted. The presence at the annual meeting, in person
or by proxy, of the holders of a majority of the shares of
common stock outstanding on the record date will constitute a
quorum. Proxies received but marked as abstentions or treated as
broker non-votes will be included in the calculation of the
number of shares considered to be present at the annual meeting.
What if a
quorum is not present at the meeting?
If a quorum is not present at the scheduled time of the annual
meeting, the stockholders who are represented may adjourn the
annual meeting until a quorum is present. The time and place of
the adjourned meeting will be announced at the time the
adjournment is taken, and no other notice will be given.
Who is
entitled to vote?
The record date for the annual meeting is Tuesday,
April 28, 2009. Only stockholders of record at the close of
business on that date are entitled to vote at the annual
meeting. The only class of stock entitled to be voted at the
annual meeting is our common stock. Each outstanding share of
common stock is entitled to one vote for all matters before the
annual meeting. At the close of business on the record date,
there were
[ ] shares
of our common stock outstanding.
Am I
entitled to vote if my shares are held in street
name?
If your shares are held by a bank or brokerage firm, you are
considered the beneficial owner of shares held in
street name. If your shares are held in street name,
your bank or brokerage firm (the record holder of your shares)
forwarded these proxy materials, along with a voting instruction
card, to you. As the beneficial owner, you have the right to
direct your record holder how to vote your shares, and the
record holder is required to vote your shares in accordance with
your instructions. If you do not give instructions to your bank
or brokerage firm, it will nevertheless be entitled to vote your
shares with respect to discretionary items
(
i.e.
, Proposal 1. Election of Directors and
Proposal 4. Ratification of PricewaterhouseCoopers LLP),
but it will not be permitted to vote your shares with respect to
non-discretionary items (
i.e.
,
Proposal 2. Declassifying the Board of Directors and
Proposal 3. Amending the Stock Incentive Plan). In the case
of a non-discretionary item, your shares will be considered
broker non-votes on that proposal.
As the beneficial owner of shares, you are invited to attend the
annual meeting. However, if you wish to attend the annual
meeting, please bring to the meeting your bank or brokerage
statement evidencing your beneficial ownership of our stock and
a form of government issued photo identification. If you are a
beneficial owner, you may not vote your shares in person at the
meeting unless you obtain a power of attorney or proxy form from
the record holder of your shares.
How do I
vote?
If you are a registered stockholder, meaning that you hold your
shares in certificate form or through an account with our
transfer agent, American Stock Transfer &
Trust Company, and you wish to vote prior to the annual
meeting, you have three options. You may vote:
|
|
|
|
|
over the Internet, at the address shown on your proxy card;
|
|
|
|
by telephone, through the number shown on your proxy
card; or
|
|
|
|
by mail, by properly completing, signing and returning the
accompanying proxy card in the enclosed envelope.
|
2
If your shares are held in street name, your bank or brokerage
firm forwarded these proxy materials, as well as a voting
instruction card, to you. Please follow the instructions on the
voting instruction card to vote your shares.
If you are a registered stockholder and you attend the meeting,
you may deliver your completed proxy card in person.
Additionally, we will pass out written ballots to registered
stockholders who wish to vote in person at the meeting.
Beneficial owners of shares held in street name who wish to vote
at the meeting will need to obtain a power of attorney or proxy
form from their record holder to do so. Directions to the
meeting can be obtained by writing to our Investor Relations
department at 7 Village Circle, Suite 100, Westlake, Texas
76262.
What does
it mean if I receive more than one proxy card?
If you receive more than one proxy card, it means that your
shares are held in more than one account at our transfer agent
and/or
with
banks or brokers. Please vote all of your shares.
The Securities and Exchange Commission, or the SEC, has also
adopted rules that permit companies and intermediaries, such as
brokers, to deliver a single proxy statement to two or more
stockholders that share the same address. This process, commonly
referred to as householding, may provide an extra
convenience for stockholders and cost savings for companies. We
endeavor to household our proxy materials to the extent that we
deliver them in paper. Accordingly, stockholders who share the
same address may receive only one copy of this proxy statement,
unless a stockholder at that address delivers contrary
instructions to us.
If you prefer to receive multiple copies of the proxy statement
at the same address, you may receive additional copies promptly
upon request. If you are a stockholder of record, you may obtain
additional copies by writing to our secretary at our principal
executive offices at 7 Village Circle, Suite 100, Westlake,
Texas 76262, or calling us at
(817) 837-1200.
Eligible stockholders of record who receive multiple copies of
the proxy statement can request householding by contacting us in
the same manner. If you are a beneficial owner but not a
stockholder of record (for example, you hold your shares in a
brokerage or custody account), you can request additional copies
of the proxy statement or you can request householding by
notifying your broker, bank, or other intermediary.
What if I
do not specify how my shares are to be voted?
If you are a registered stockholder and you submit a proxy but
do not provide any voting instructions, your shares will be
voted in accordance with our board of directors
recommendations:
|
|
|
|
|
FOR the election of the three nominees named below to the board
of directors;
|
|
|
|
FOR the amendments to our certificate of incorporation and
bylaws to declassify our board of directors;
|
|
|
|
FOR the amendment to increase the Stock Incentive Plan by
3,500,000 shares; and
|
|
|
|
FOR the ratification of PricewaterhouseCoopers as our
independent registered public accounting firm.
|
If you hold your shares in street name and do not instruct your
bank or brokerage firm how to vote your shares, it may vote your
shares as it chooses with respect to discretionary items,
including the election of directors and the ratification of the
appointment of our independent registered public accounting
firm. It will not be able to vote your shares with respect to
non-discretionary items, and your shares will be considered
broker non-votes on non-discretionary proposals, including the
declassification of our board of directors and the increase in
shares reserved for issuance under our Stock Incentive Plan.
Can I
change my vote after I submit my proxy?
Yes, you may revoke your proxy and change your vote:
|
|
|
|
|
by properly completing and signing another proxy card with a
later date and returning the proxy card prior to the annual
meeting date to American Stock Transfer &
Trust Company, 59 Maiden Lane, Plaza Level, New York,
New York 10038;
|
|
|
|
by voting again over the Internet or telephone prior to
8:30 a.m. local time on Tuesday, June 23, 2009; or
|
3
|
|
|
|
|
if you are a registered stockholder, by giving written notice of
such revocation to our corporate Secretary, Brad Cole, prior to
or at the annual meeting or by voting in person at the annual
meeting.
|
Your attendance at the meeting itself will not revoke your proxy
unless you give written notice of revocation to the Secretary
before your proxy is voted or you vote in person at the meeting.
Who will
count the votes?
Our transfer agent will tabulate and certify the votes. A
representative of the transfer agent will serve as an inspector
of election.
How does
the board of directors recommend I vote on the
proposals?
Our board of directors recommends that you vote:
|
|
|
|
|
FOR the election of the three nominees named below to the board
of directors;
|
|
|
|
FOR the amendment to our certificate of incorporation and bylaws
to declassify our board of directors;
|
|
|
|
FOR the amendment to increase the Stock Incentive Plan by
3,500,000 shares; and
|
|
|
|
FOR the ratification of PricewaterhouseCoopers as our
independent registered public accounting firm.
|
Will any
other business be conducted at the meeting?
We know of no other business that will be presented at the
meeting. However, if any other matter properly comes before the
stockholders for a vote at the meeting, the proxy holders will
vote your shares in accordance with their best judgment.
What
votes are necessary to approve each of the proposals?
Election of Directors.
The affirmative vote of
a plurality of the votes cast at the meeting is required to
elect the three nominees for director. This means that the three
nominees will be elected if they receive more affirmative votes
than any other person. If you vote Abstain with
respect to one or more nominees, your shares will not be voted
with respect to the person or persons indicated, although they
will be counted for purposes of determining whether there is a
quorum.
Approval of the Declassification of our Board of
Directors.
This proposal requires the affirmative
vote of
66
2
/
3
%
of the shares outstanding and entitled to vote generally in the
election of directors. For this vote, abstentions and broker
non-votes have the effect of a vote against this proposal.
Approval of the Amendment to the Stock Incentive
Plan.
This proposal requires the affirmative vote
of a majority of the shares present in person or represented by
proxy at the meeting and entitled to vote. For this vote,
abstentions have the effect of a vote against this proposal and
broker non-votes will be disregarded and will have no impact on
the vote.
Ratification of Appointment of PricewaterhouseCoopers
LLP.
This proposal requires the affirmative vote
of a majority of the shares present in person or represented by
proxy at the meeting and entitled to vote. For this vote,
abstentions have the effect of a vote against this proposal and
broker non-votes will be disregarded and will have no impact on
the vote.
What
happens if a nominee is unable to stand for election?
If a nominee is unable to stand for election, the board of
directors may either reduce the number of directors to be
elected or select a substitute nominee. If a substitute nominee
is selected, the proxy holders will vote your shares for the
substitute nominee, unless you have voted Withheld
with respect to the original nominee.
4
Where can
I find the voting results of the annual meeting?
We plan to announce preliminary voting results at the annual
meeting and to publish final results in our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2009, which we will file
with the SEC.
Will I
receive a copy of the annual report?
With this proxy statement, we have mailed you our Annual Report
on
Form 10-K
for the year ended December 31, 2008. Copies of our annual
report, this proxy statement and proxy card will be available at
http://proxy.middlebrookpharma.com.
You may also obtain a copy by writing to our Investor Relations
department at 7 Village Circle, Suite 100, Westlake, Texas
76262, by accessing the investor relations section of our
website at
http://ir.middlebrookpharma.com
or by accessing the SECs EDGAR database at
www.sec.gov
. Our Annual Report on
Form 10-K
for the year ended December 31, 2008, is not incorporated
into this proxy statement and is not considered proxy soliciting
material.
Who pays
for solicitation of the proxy?
The expense of soliciting proxies, including the cost of
preparing, assembling and mailing the material submitted with
this proxy statement, will be paid for by us. In addition to
solicitations by mail, our directors, officers and regular
employees may solicit proxies personally or by telephone, mail
or other means, for which no compensation will be paid other
than their regular salary or other usual compensation.
Arrangements also will be made as appropriate with banks and
brokerage houses and other custodians, nominees and fiduciaries
to forward solicitation materials to the beneficial owners of
the common stock held of record by such persons; we will, upon
request, also reimburse such persons for their reasonable
expenses in forwarding the solicitation materials.
CORPORATE
GOVERNANCE AND RELATED MATTERS
Corporate
Governance Guidelines
Our board of directors acts as the ultimate decision-making body
for MiddleBrook, and advises and oversees management, who are
responsible for the day-to-day operations and management of
MiddleBrook. In carrying out its responsibilities, the board
reviews and assesses our long-term strategy and our strategic,
competitive and financial performance. The board has adopted
Corporate Governance Guidelines which are available on the
investor relations section of our website at
http://ir.middlebrookpharma.com.
We regularly monitor our corporate governance guidelines in
order to comply with rules adopted by Delaware General
Corporation Law, Nasdaq, the SEC and industry practices.
Meetings
of the Board of Directors
The Board of Directors held 18 meetings during 2008. Each
director attended 75% or more of the aggregate of all board and
committee meetings on which such director served during 2008,
except for Lord James Blyth and Mark Sotir who joined our board
of directors late in the 2008. Dr. Rudnic represented the
board at our 2008 Annual Meeting. It is our policy to have each
director attend, either in person or by telephone, the 2009
annual meeting and all future meetings of stockholders.
Director
Independence
Under our Corporate Governance Guidelines, a majority of the
board of directors must be comprised of directors who meet the
independence requirements set forth in the Nasdaq Marketplace
Rules applicable to listed companies and SEC Rules. The
Nominating and Governance Committee undertook its annual review
of director independence in December 2008, and determined that
each member of the board of directors who will continue to be a
member following the 2009 annual meeting, other than Lord Blyth
and Mr. Thievon, is independent in accordance with
applicable rules. Mr. Thievon is considered an insider
director because of his current employment as president and
chief executive officer. Lord Blyth is deemed to be an insider
director because of the terms of his consulting agreement. For
additional information regarding Lord Blyths consulting
agreement, see
Certain
5
Relationships and Related Transactions Blyth
Consulting Agreement.
Dr. Rudnic, who resigned
from our board on September 4, 2008, was not considered an
independent director because of his concurrent employment as our
president and chief executive officer.
Committees
of the Board
Audit
Committee
Richard W. Dugan, Chair
Wayne T. Hockmeyer, Ph.D. (thru December 10, 2008)
R. Gordon Douglas
William C. Pate (beginning December 10, 2008)
The board of directors has determined that each of the members
of the Audit Committee is financially literate and independent
in accordance with applicable Nasdaq Marketplace rules and SEC
rules. The board of directors has determined that Mr. Dugan
is an audit committee financial expert as that term
is defined under the applicable rules established by Nasdaq
Marketplace Rules and Item 407(d)(5) of Regulations S-K.
The Audit Committee held six meetings during 2008. The Audit
Committee also approved the Audit Committee Report that is found
on Page 25 of this proxy statement.
A copy of the current Audit Committee charter is available on
our website at
http://ir.middlebrookpharma.com.
Pursuant to the Audit Committee charter, the committee assists
the board in fulfilling its oversight responsibilities with
respect to the following:
|
|
|
|
|
the integrity of our financial statements and other financial
information provided by us to our stockholders;
|
|
|
|
the proposed scope and results of the audit by our independent
registered public accounting firm;
|
|
|
|
retention of our independent registered public accounting firm,
including oversight of the terms of their engagement and their
performance, qualifications and independence;
|
|
|
|
permissible audit and non-audit services and the fees paid for
such services;
|
|
|
|
the performance of our internal controls and disclosure controls;
|
|
|
|
review and ratification of any related party transactions
pursuant to our policy on such matters;
|
|
|
|
compliance by MiddleBrook with its ethical policies and legal
and regulatory requirements; and
|
|
|
|
receipt, retention and treatment of complaints regarding
accounting and auditing matters.
|
Compensation
Committee
Wayne T. Hockmeyer, Ph.D., Chair
R. Gordon Douglas, M.D. (thru December 10, 2008)
Lord James Blyth (beginning December 10, 2008)
Mark R. Sotir (beginning December 10, 2008)
The board of directors has determined that each of the committee
members is independent in accordance with applicable Nasdaq
Marketplace Rules, except for Lord Blyth. Lord Blyth is deemed
to be an insider director because of the terms of his consulting
agreement. The Board has determined that it is in the best
interest of the Company for Lord Blyth to serve on the
Compensation Committee. For additional information regarding
Lord Blyths consulting agreement, see
Certain
Relationships and Related Transactions Blyth
Consulting Agreement.
The committee held seven
meetings during 2008. The committee approved the Compensation
Committee Report that is found on Page 41 of this proxy
statement. A copy of the current committee charter is available
on our website at
http://ir.middlebrookpharma.com.
Pursuant to its charter the Compensation Committee is authorized
to:
|
|
|
|
|
review and approve the compensation arrangements for management,
excluding the compensation for the president and chief executive
officer;
|
6
|
|
|
|
|
review and recommend to the full board, for approval, the
compensation arrangements for the president and chief executive
officer;
|
|
|
|
establish and review general compensation policies with the
objective to attract and retain superior talent, to reward
individual performance and to achieve our financial goals;
|
|
|
|
make recommendations to the board of directors with respect to
the compensation of members of the board; and
|
|
|
|
administer our stock incentive plans.
|
Nominating
and Governance Committee
Lord James Blyth, Chair (beginning December 10, 2008)
James H. Cavanaugh, Ph.D. (beginning December 10, 2008)
Wayne T. Hockmeyer, Ph.D. (thru December 10, 2008)
Harold R. Werner
The board of directors has determined that each of the committee
members is independent in accordance with applicable Nasdaq
Marketplace Rules, except for Lord Blyth. Lord Blyth is deemed
to be an insider director because of the terms of his consulting
agreement. For additional information regarding Lord
Blyths consulting agreement, see
Certain
Relationships and Related Transactions Blyth
Consulting Agreement.
The committee held two meetings
during 2008. A copy of the current Nominating and Governance
Committee charter is available on our website at
http://ir.middlebrookpharma.com.
Pursuant to its charter, the committee is authorized to:
|
|
|
|
|
identify and nominate members for the board of directors and
consider nominations by stockholders;
|
|
|
|
recommend to the full board nominees for election at the next
annual or special meeting of stockholders at which directors are
to be elected or to fill any vacancies or newly-created
directorships that may occur between such meetings;
|
|
|
|
recommend committee compositions to the board of directors;
|
|
|
|
develop and recommend to the board of directors a set of
corporate governance principles applicable to MiddleBrook, and
oversee the compliance with such guidelines; and
|
|
|
|
monitor the role and effectiveness of the board of directors in
the corporate governance process.
|
Executive
Committee
The executive committee consisted of Drs. Edward M. Rudnic,
James H. Cavanaugh, R. Gordon Douglas and Wayne T. Hockmeyer.
Subject to applicable law, the Executive Committee was
authorized to exercise all power and authority of the board of
directors in the oversight of the management of
MiddleBrooks business and affairs. This committee did not
meet during 2008, and was terminated by the board of directors
at the recommendation of the Nominating and Governance Committee.
Nominations
Process
The Nominating and Governance Committee uses a variety of
criteria to evaluate the qualifications and skills necessary for
members of the board of directors. Under these criteria, members
of the board of directors should have the highest professional
and personal ethics and values, consistent with longstanding
values and standards of MiddleBrook. Members of the board of
directors should have broad experience at the policy-making
level in business, government, medicine, education, technology
and/or
public interest. They should be committed to enhancing
stockholder value, and should have sufficient time to carry out
their duties and to provide insight and practical wisdom based
on experience. In identifying candidates for membership on the
board of directors, the Nominating and Governance Committee
takes into account all factors it considers appropriate, which
may include, but is not limited to, strength of character,
maturity of judgment, career specialization, relevant skills,
diversity and the extent to which a particular candidate would
fill a present need on the board of directors. At a minimum,
director candidates must have unimpeachable character and
integrity, sufficient time to carry out their duties, the
ability to
7
read and understand financial statements, experience at senior
levels in areas relevant to MiddleBrook. Furthermore, consistent
with the objective of having a diverse and experienced board,
candidates should have the ability and willingness to exercise
sound business judgment, the ability to work well with others
and the willingness to assume the responsibilities required of a
MiddleBrook director. Each member of the board must represent
the interests of our stockholders.
Our Nominating and Governance Committee also reviews and
determines whether existing members of the board of directors
should stand for re-election, taking into consideration matters
relating to the number of terms served by individual directors
and changes in the needs of the board. The independent directors
have nominated for re-election Lord James Blyth, James H.
Cavanaugh, Ph.D., and John Thievon with a term of office
expiring at the 2012 Annual Meeting.
The Nominating and Governance Committee utilizes a variety of
methods for identifying and evaluating nominees for director.
The Nominating and Governance Committee regularly assesses the
appropriate size of the board of directors, and whether any
vacancies on the board of directors are expected due to
retirement or otherwise. In the event that vacancies are
anticipated, or otherwise arise, the Nominating and Governance
Committee considers various potential candidates for director.
Candidates may come to the attention of the Nominating and
Governance Committee through current members of the board of
directors, professional search firms, stockholders or other
persons. These candidates are evaluated at regular or special
meetings of the Nominating and Governance Committee, and may be
considered at any point during the year. The committee considers
stockholder recommendations for candidates for the board of
directors that are properly submitted in accordance with
MiddleBrooks bylaws and SEC rules. In evaluating such
recommendations, the committee uses the qualifications standards
described above and seeks to achieve a balance of knowledge,
experience and capability on the board of directors.
Any stockholder wishing to have a candidate considered by the
Nominating and Governance Committee should submit the following
written information to our corporate secretary:
|
|
|
|
|
the name and the contact information of, and the number of
shares of MiddleBrook common stock held by, the person
submitting the candidate;
|
|
|
|
the name and contact information of the candidate;
|
|
|
|
a resume of the candidates educational and professional
experience and list of references;
|
|
|
|
a statement setting forth any relationship between the candidate
and any customer, supplier, competitor, employee or director of
MiddleBrook or between the candidate and the stockholder
proposing the candidate; and
|
|
|
|
a statement (executed by the candidate) acknowledging that as a
director, such person will owe a fiduciary duty under Delaware
General Corporation Law exclusively to MiddleBrook and our
stockholders; and
|
|
|
|
a signed consent of the candidate to background and reference
checks as part of the evaluation process, to being named in a
proxy statement (if determined advisable by the Nominating and
Governance Committee) and to serving on the board of directors
if nominated and elected.
|
Stockholder
Communications with the Board of Directors
Stockholders may send communications to the board of directors
or any of its members by sending such communications to
MiddleBrook Pharmaceuticals, Inc.,
c/o Nominating
and Governance Committee Chairperson, 7 Village Circle,
Suite 100, Westlake, Texas 76262. These communications will
not be screened by management prior to receipt by the Nominating
and Governance Committee Chairperson.
Compensation
Committee Interlocks and Insider Participation
During 2008, Wayne T. Hockmeyer, Ph.D., R. Gordon
Douglas, M.D., Lord James Blyth and Mark R. Sotir served on
the Compensation Committee of the board of directors. None of
the Compensation Committee members was formerly an officer or
employed by us; however, we entered into a consulting agreement
with Lord Blyth which is described in more detail in this proxy
statement under the section title
Certain Relationships
and Related
8
Transactions Blyth Consulting Agreement.
No executive officer served as a member of the board of
directors or compensation committee of any entity that has one
or more executive officers serving as a member of our board of
directors or Compensation Committee.
Code of
Ethics and Business Conduct
The board of directors has adopted a written code of ethics and
business conduct, a copy of which is available on our website at
http://ir.middlebrookpharma.com,
and will be provided to stockholders without charge upon request
to our corporate secretary. We require all directors, officers
and employees to adhere to this code in addressing the legal and
ethical issues encountered in conducting their work.
The board of directors has also adopted a written code of ethics
applicable to the chief executive officer and senior financial
officers, a copy of which is available on the Companys
website at
http://ir.middlebrookpharma.com,
and will be provided to stockholders without charge upon request
to our corporate secretary. We require our chief executive
officer and senior financial officers to resolve ethically any
actual or apparent conflicts of interest and to comply with all
generally accepted accounting principles, laws and regulations
designed to produce full, fair, accurate, timely and
understandable disclosure in all our SEC filings.
We intend to post amendments to or waivers from our codes of
conduct (to the extent applicable to our executive officers or
directors) at the investor relations section of our website
within the timeframe required by applicable SEC rules.
Compensation
of Directors
We currently pay each of our non-employee directors an annual
fee of $20,000 for serving on our board of directors. In
addition, we currently pay our directors $2,500 for each meeting
of the board attended in person, and $1,500 for each meeting of
the board attended telephonically and for each meeting of a
committee of the Board attended. At such times as we have a
non-employee chairman of the board, we pay such individual an
additional $10,000 annual fee. In 2008, each non-employee
chairman of the Nominating and Governance Committee,
Compensation Committee and Audit Committee was paid an
additional annual fee of $3,000, $5,000 and $7,000,
respectively. We also reimburse our non-employee directors for
reasonable expenses incurred to attend board and committee
meetings, as well as business meetings and functions attended on
our behalf. Directors who are also employed by us do not receive
any compensation for their services as a director, but we do
have other compensatory arrangements with them for services
other than as a director, which are described in the sections of
this proxy statement captioned Executive Compensation
and Other Matters.
In addition, our Stock Incentive Plan provides for the automatic
grant of an option to purchase 20,000 shares of common
stock to each of our non-employee directors, or an option to
purchase 30,000 shares of common stock to the chairman of
the board of directors if he or she is a non-employee director,
on the date of each annual meeting of stockholders, provided the
director continues to serve as a director following the meeting.
Each annual stock option grant vests in equal monthly
installments over a period of one year from the date of grant,
except that in the event of a change of control the option will
become fully vested. The plan also provides for the automatic
grant of an option to purchase 30,000 shares of common
stock to each non-employee director who is first elected or
appointed as a director after September 2, 2003. The
initial option vests in equal monthly installments over a period
of three years from the date of grant, except that in the event
of a change of control the option will become fully vested. All
of these options have an exercise price equal to the fair market
value of our common stock at the close of the market on the
business day preceding the date of the grant and are exercisable
on the grant date. Stock options exercised prior to vesting are
restricted shares until vesting occurs.
9
DIRECTOR
COMPENSATION TABLE
The following table shows the compensation earned by each of our
non-employee directors for their service as directors at any
time during the year ended December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid in Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
Meeting
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
|
|
Retainer
|
|
|
Fees
|
|
|
Awards
|
|
|
Compensation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
Lord James Blyth(2)
|
|
|
20,000
|
|
|
|
4,000
|
|
|
|
34,316
|
|
|
|
|
|
|
|
58,316
|
|
James H. Cavanaugh, Ph.D.(4)
|
|
|
22,000
|
|
|
|
33,000
|
|
|
|
47,657
|
|
|
|
|
|
|
|
102,657
|
|
R. Gordon Douglas, M.D.
|
|
|
30,000
|
|
|
|
44,500
|
|
|
|
71,485
|
|
|
|
|
|
|
|
145,985
|
|
Richard W. Dugan
|
|
|
27,000
|
|
|
|
37,000
|
|
|
|
47,657
|
|
|
|
|
|
|
|
111,657
|
|
Wayne T. Hockmeyer, Ph.D.
|
|
|
25,000
|
|
|
|
50,500
|
|
|
|
47,657
|
|
|
|
|
|
|
|
123,157
|
|
William C. Pate(3)
|
|
|
20,000
|
|
|
|
11,000
|
|
|
|
4,028
|
|
|
|
|
|
|
|
35,028
|
|
Mark R. Sotir(3)
|
|
|
20,000
|
|
|
|
7,000
|
|
|
|
4,028
|
|
|
|
|
|
|
|
31,028
|
|
Martin A. Vogelbaum(4)
|
|
|
20,000
|
|
|
|
38,500
|
|
|
|
51,136
|
|
|
|
|
|
|
|
109,636
|
|
Harold R. Werner(4)
|
|
|
20,000
|
|
|
|
31,000
|
|
|
|
47,657
|
|
|
|
|
|
|
|
98,657
|
|
|
|
|
(1)
|
|
Amount reflects the compensation cost for the year ended
December 31, 2008 for financial reporting purposes of each
directors options, calculated in accordance with
SFAS 123R using a Black-Scholes valuation model and
includes amounts from awards granted in and prior to 2008. Award
fair values have been determined based on the assumptions set
for in Note 17 Stock Option Plans in our Annual
Report on
Form 10-K
for the year ended December 31, 2008.
|
|
(2)
|
|
Lord Blyth was appointed to the board of directors on
October 17, 2008. We have entered into a consulting
agreement with Lord Blyth which is described in more detail in
this proxy statement under the section title
Certain
Relationships and Related Transactions Blyth
Consulting Agreement.
|
|
(3)
|
|
Messrs. Pate and Sotir were appointed to the board of
directors effective September 5, 2008.
|
|
(4)
|
|
In 2008, we formed an ad hoc special committee of directors to
assist in connection with our strategic review process. The
special committee consisted of Dr. Cavanaugh and
Messrs. Vogelbaum and Werner. The compensation shown above
includes fees paid to the members of the special committee.
|
The following table provides additional information about equity
awards granted to our non-employee directors during the year
ended December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
|
Grant Date
|
|
|
Option Awards
|
|
|
Fair Value
|
|
Name
|
|
#
|
|
|
#
|
|
|
$
|
|
|
Lord James Blyth
|
|
|
10/17/2008
|
|
|
|
30,000
|
(1)
|
|
|
27,000
|
|
|
|
|
10/17/2008
|
|
|
|
470,000
|
(2)
|
|
|
423,000
|
|
James H. Cavanaugh, Ph.D.
|
|
|
06/04/2008
|
|
|
|
20,000
|
|
|
|
60,000
|
|
R. Gordon Douglas, M.D.
|
|
|
06/04/2008
|
|
|
|
30,000
|
|
|
|
90,000
|
|
Richard W. Dugan
|
|
|
06/04/2008
|
|
|
|
20,000
|
|
|
|
60,000
|
|
Wayne T. Hockmeyer, Ph.D.
|
|
|
06/04/2008
|
|
|
|
20,000
|
|
|
|
60,000
|
|
William C. Pate
|
|
|
09/05/2008
|
|
|
|
30,000
|
(1)
|
|
|
41,400
|
|
Mark R. Sotir
|
|
|
09/05/2008
|
|
|
|
30,000
|
(1)
|
|
|
41,400
|
|
Martin A. Vogelbaum
|
|
|
06/04/2008
|
|
|
|
20,000
|
|
|
|
60,000
|
|
Harold R. Werner
|
|
|
06/04/2008
|
|
|
|
20,000
|
|
|
|
60,000
|
|
|
|
|
(1)
|
|
Lord Blyth was appointed to the board of directors on
October 17, 2008, and Messrs. Pate and Sotir were
appointed to the board of directors on September 5, 2008.
Each non-employee director that joins our board of directors
receives an option to purchase 30,000 shares of common
stock. This initial option vests and becomes
|
10
|
|
|
|
|
exercisable in equal monthly installments over a period of three
years from the date of grant, except that in the event of a
change of control the option will become fully vested.
|
|
(2)
|
|
As compensation for Lord Blyths services under his
consulting agreement, Lord Blyth received an option to purchase
470,000 shares of MiddleBrooks common stock. The
option has a term of three years and will fully vest one month
prior to the expiration of the consulting agreement. The board
may accelerate the vesting, or terminate the consulting
agreement prior to the vesting of Lord Blyths options, at
any time in the boards sole discretion based on a review
of Lord Blyths contribution to MiddleBrook. For additional
information regarding Lord Blyths consulting agreement,
see
Certain Relationships and Related
Transactions Blyth Consulting Agreement.
|
The aggregate number of options awards outstanding and held by
each non-employee director as December 31, 2008, is
indicated in the table below:
|
|
|
|
|
Name
|
|
Option Awards
|
|
|
Lord James Blyth
|
|
|
500,000
|
|
James H. Cavanaugh, Ph.D.
|
|
|
80,000
|
|
R. Gordon Douglas, M.D.
|
|
|
165,517
|
|
Richard W. Dugan
|
|
|
130,053
|
|
Wayne T. Hockmeyer, Ph.D.(1)
|
|
|
127,321
|
|
William C. Pate
|
|
|
30,000
|
|
Mark R. Sotir
|
|
|
30,000
|
|
Martin A. Vogelbaum
|
|
|
50,000
|
|
Harold R. Werner
|
|
|
80,000
|
|
|
|
|
(1)
|
|
Dr. Hockmeyer recently informed the board that he does not
intend to stand for re-election when his current term expires at
the 2009 Annual Meeting. Dr. Hockmeyer will continue to
serve as a director until the Annual Meeting. The board of
directors authorized the amendment of Dr. Hockmeyers
stock option grant agreements to provide that
Dr. Hockmeyers right to exercise vested stock options
shall continue for a period of
12-months
following termination of his service as a director rather than
six-months following termination of his service as a director
(as currently provided).
|
11
PROPOSALS TO
BE VOTED ON AT THE ANNUAL MEETING
ELECTION OF DIRECTORS
Our board of directors currently consists of ten directors,
divided into two classes of three directors each and one class
of four directors, with the directors in each class serving
three-year terms and with the terms of office of one class
expiring at each annual meeting of stockholders. Each
directors term is subject to the election and
qualification of his respective successor, or such
directors earlier death, resignation or removal. The term
of office of four of our current directors, Lord James Blyth,
Vice Chairman, James H. Cavanaugh, Ph.D.,
Wayne T. Hockmeyer, Ph.D., and John Thievon, will
expire at the annual meeting. Lord Blyth, Dr. Cavanaugh,
and Mr. Thievon are nominees for re-election to our board
of directors. In accordance with the recommendation of the
nominating and corporate governance committee, the board of
directors recommends that Lord Blyth, Dr. Cavanaugh and
Mr. Thievon be elected as directors at the annual meeting.
Each of the nominees has consented to being named in this proxy
statement and to serve if elected. If elected by the
stockholders, these nominees will hold office until our annual
meeting of stockholders in 2012 and until their successors are
duly elected and qualified or until their earlier death,
resignation or removal.
Dr. Hockmeyer recently informed the board that he does not
intend to stand for re-election when his current term expires at
the annual meeting. Dr. Hockmeyer will continue to serve as
a director until the annual meeting. The board of directors
authorized the amendment of Dr. Hockmeyers stock
option grant agreements to provide that
Dr. Hockmeyers right to exercise vested stock options
shall continue for a period of
12-months
following his termination of his service as a director rather
than six-months following termination of his service as a
director (as currently provided).
Directors are elected by a plurality of the votes cast. Shares
may not be voted cumulatively, and proxies cannot be voted for a
greater number of persons than the number of nominees named.
Shares voted prior to the annual meeting by the accompanying
proxy card will be voted for the election of the three nominees
recommended by the board of directors, unless the proxy card is
marked in such a manner as to withhold authority to vote or as
to vote for one or more alternate candidates. Votes withheld
will not affect the outcome of the election. If any nominee for
any reason is unable to serve or will not serve, the persons
named as proxies may vote for such substitute nominee as the
proxyholders may determine. We are not aware of any nominee who
will be unable to, or for good cause will not, serve as a
director.
The board of directors has proposed an amendment to our
certificate of incorporation and bylaws (See Proposal 2
below) that would declassify our board of directors and provide
for the annual election of directors. If Proposal 2 is
approved by our stockholders, as recommended by our board of
directors, the board of directors will implement a staggered
annual election of all directors over a three-year period ending
at the 2012 annual stockholders meeting and all directors will
then serve one-year terms rather than three-year terms.
Regardless of the stockholders vote on Proposal 2, at this
annual meeting, stockholders will vote on the election of the
three director nominees described below.
THE BOARD OF DIRECTORS RECOMMENDS THAT OUR STOCKHOLDERS VOTE
FOR PROPOSAL 1, THE ELECTION OF LORD JAMES
BLYTH, JAMES H. CAVANAUGH, PH.D., AND JOHN THIEVON, THE THREE
NOMINEES FOR DIRECTOR.
Information
Concerning Director Nominees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
|
Name
|
|
Age
|
|
Since
|
|
Position
|
|
Lord James Blyth
|
|
|
68
|
|
|
|
2008
|
|
|
Vice Chairman of the Board of Directors and Nominee
|
James H. Cavanaugh, Ph.D.
|
|
|
72
|
|
|
|
2000
|
|
|
Director and Nominee
|
John Thievon
|
|
|
41
|
|
|
|
2008
|
|
|
President, Chief Executive Officer, Director and Nominee
|
Lord James Blyth
joined our board as vice chairman in
October 2008. Lord Blyth was chairman of Diageo plc, a global
premium beverage company, from July 2000 through June 2008.
Previously, he served as a non-executive
12
director at Diageo plc since January 1999. He was formerly chief
executive and then chairman of The Boots Company PLC, a UK-based
retailer, drugstore chain and contract manufacturer. Lord Blyth
has held several leadership roles, including chief executive of
the Plessey Company, an electronics, defense, and
telecommunications company, and head of defense sales at the
United Kingdom Ministry of Defense. He is also a non-executive
director of Anixter Inc., a communications supplier and
distributer, in the U.S. and a senior adviser to
Greenhill & Co., Inc., an investment banking firm,
where he was previously a vice chairman.
James H. Cavanaugh, Ph.D.
has been a director since
our inception. Dr. Cavanaugh is a general partner of
HealthCare Partners V, L.P., HealthCare Partners VI, L.P.
and Healthcare Partners VII, L.P., which are the general
partners of HealthCare Ventures V, L.P., HealthCare
Ventures VI, L.P. and Healthcare Ventures VII, L.P.,
respectively. Dr. Cavanaugh was previously president of
SmithKline and French Laboratories U.S., Inc., the
pharmaceutical division of SmithKline Beckman Corporation, from
1985 to 1989 and president of SmithKline Clinical Laboratories,
SmithKline Beckmans clinical laboratories business, from
1981 to 1985. Dr. Cavanaugh serves as chairman of the Board
of Directors of Verenium Corporation. Dr. Cavanaugh
previously served on the Board of Directors of Shire
Pharmaceuticals Group PLC, the National Venture Capital
Association and as trustee emeritus of the California College of
Medicine. Dr. Cavanaugh holds a Ph.D. and an M.S. from the
University of Iowa and a B.S. from Fairleigh Dickinson
University.
John Thievon
has served as our President, Chief Executive
Officer and a Director since September 2008. Prior to joining
us, he held various positions at Adams Respiratory Therapeutics,
Inc., a pharmaceutical company, from January 1999 to February
2008, including Executive Vice President, Sales and Corporate
Accounts from July 2007 to February 2008; Executive Vice
President, Sales and Business Development from October 2006 to
June 2007; Executive Vice President, Commercial Operations from
May 2005 to October 2006; Vice President, Sales and Professional
Marketing from June 2000 to May 2005; and from January 1999 to
May 2000, Mr. Thievon held various positions with Adams,
including Northeast Regional Business Director and Director of
Marketing. From January 1995 to December 1998, he held various
positions with IMS Health Incorporated, a pharmaceutical
consulting and data services company, including Account Manager,
Account Director, and Director of Sales Training, and from 1990
to 1994, he served as a Sales Representative with Ortho
Pharmaceuticals Inc., a healthcare company. Mr. Thievon has
been a member of DaySpring Pharma, LLCs Board of Directors
since November 2007. DaySpring is a specialty pharmaceutical
company focused on acquiring, developing and commercializing
prescription and non-prescription products for specialty markets
in womens health and pediatrics. Mr. Thievon
graduated from Pace University with a Bachelor of Business
Administration degree, with a concentration in marketing.
Information
Regarding Directors Continuing in Office
Directors
Continuing in Office Whose Term Expires
at the Annual Meeting of Stockholders to be held in
2010
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Director Since
|
|
Position
|
|
R. Gordon Douglas, M.D.
|
|
|
75
|
|
|
|
2000
|
|
|
Chairman of the Board of Directors
|
Martin A. Vogelbaum
|
|
|
45
|
|
|
|
2007
|
|
|
Director
|
Harold R. Werner
|
|
|
60
|
|
|
|
2000
|
|
|
Director
|
R. Gordon Douglas, M.D.
has been a director since
our inception and was appointed to be our Chairman in February
2006. Dr. Douglas currently serves as consultant to the
Vaccine Research Center at the National Institute of Health.
Dr. Douglas was president of Merck Vaccines, a
pharmaceutical company, responsible for the research,
development, manufacturing and marketing of Merck Vaccines
vaccine products, from 1991 until 1999. From 1982 to 1990, he
was a professor of medicine and Chairman, Department of
Medicine, Cornell University Medical College and
physician-in-chief
at the New York Hospital. He also served as head of the
infectious disease unit at the University of Rochester School of
Medicine. Dr. Douglas serves on the Board of Directors of
Elusys Therapeutics, Inc., the Aeras Global TB Vaccine
Foundation (Chairman), VaxInnate, Inc. and Vical Incorporated
(Chairman). Dr. Douglas is a graduate of Princeton
University and Cornell University Medical College.
Martin A. Vogelbaum
was appointed a director in April
2007. Mr. Vogelbaum is a partner with Rho Ventures. Prior
to joining Rho, he spent five years as a general partner of
Apple Tree Partners, a life sciences venture capital
13
firm. Previously, he was a general partner of Oxford Bioscience
Partners, which he joined in 1993. Mr. Vogelbaum currently
serves on the Board of Directors of several privately-held
companies, including Gloucester Pharmaceuticals, and previously
served as a member of the Board of Directors of Nuvelo, Inc., a
publicly traded biopharmaceutical company. Mr. Vogelbaum
received an A.B. in biology and history from Columbia University.
Harold R. Werner
has been a director since our inception.
Mr. Werner is a general partner of HealthCare
Partners V, L.P., HealthCare Partners VI, L.P. and
Healthcare Partners VII, L.P., which are the general partners of
HealthCare Ventures V, L.P., HealthCare Ventures VI, L.P.
and Healthcare Ventures VII, L.P., respectively. Mr. Werner
has served as a director of over 30 public and private
companies. Prior to the formation of HealthCare Ventures in
1985, Mr. Werner was Director of New Ventures for
Johnson & Johnson Development Corporation. Before
joining Johnson & Johnson in 1980, Mr. Werner was
senior vice president of Robert S. First, Inc. and was
responsible for managing its European and, later,
U.S. health care management consulting business.
Mr. Werner currently serves on the Board of Directors of
TetraLogic Pharmaceutical Corporation, DecImmune Therapeutics,
Inc., Aciex, Inc., InfaCare Pharmaceutical Corp., Oriel
Therapeutics, Inc., Promedior, Inc., Xencor, Inc., and Stemgent,
Inc. Mr. Werner received his B.S. and M.S. degrees from
Princeton University and an M.B.A. from the Harvard Graduate
School of Business Administration.
Directors
Continuing in Office Whose Term Expires
at the Annual Meeting of Stockholders to be held in
2011
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Director Since
|
|
Position
|
|
Richard W. Dugan
|
|
|
67
|
|
|
|
2003
|
|
|
Director
|
William C. Pate
|
|
|
45
|
|
|
|
2008
|
|
|
Director
|
Mark R. Sotir
|
|
|
45
|
|
|
|
2008
|
|
|
Director
|
Richard W. Dugan
joined our Board of Directors in
September 2003. From 1976 to 2002, Mr. Dugan served as a
partner for Ernst & Young LLP, where he served in
various managing and senior partner positions including
Mid-Atlantic Area Senior Partner from 2001 to 2002, Mid-Atlantic
Area Managing Partner from 1989 to 2001 and Pittsburgh Office
Managing Partner from 1981 to 1989. Mr. Dugan retired from
Ernst & Young in 2002. Mr. Dugan currently serves
on the Board of Directors of Vanda Pharmaceuticals, Inc., a
publicly-traded company. Mr. Dugan received a B.S.B.A. from
Pennsylvania State University.
William C. Pate
has been a member of our Board of
Directors since September 2008. Mr. Pate currently is the
Chief Investment Officer and a Managing Director of Equity Group
Investments, L.L.C., or EGI, a privately-held investment firm,
and serves as a member of the board of directors of certain
private affiliates of EGI. He also serves as a director of the
Tribune Company, a diversified media company, since December
2007. Prior to joining EGI in 1994, Mr. Pate was an
associate with The Blackstone Group, a global asset management
and advisory services firm, and served in the mergers and
acquisitions group of Credit Suisse First Boston, a brokerage
services and investment banking provider. Mr. Pate serves
as a director of Covanta Holding Corporation, an owner and
operator of energy-from-waste and power generation projects, and
Exterran Holdings Inc., a provider of natural gas compression
technology. He received a Juris Doctorate degree from the
University of Chicago Law School and a Bachelors of Arts degree
from Harvard College.
Mark R. Sotir
has been a member of our Board of Directors
since September 2008. Mr. Sotir has served as a Managing
Director of EGI since November 2006. He currently manages a
number of EGIs investments, including Starwood Hotels; and
serves as a member of the board of directors of certain private
affiliates of EGI, including SIRVA, a moving and relocation
company, WRS Holding Company, an environmental remediation
company, VIA Wines Group, a Chilean wine producer and marketer,
and Rewards Network, Inc., an operator of dining rewards
programs. He recently served as the interim President of Tribune
Interactive, a division of the Tribune Company, a diversified
media company. Prior to joining EGI, he was the Chief Executive
Officer of Sunburst Technology Corporation, a leading
independent distributor of educational software to public
schools in the United States, from August 2003 to November 2006.
Prior to joining Sunburst, Mr. Sotir held various positions
with the Budget Group, Inc., a $3 billion car and truck
rental business with more than 13,000 employees, from 1995
to February 2003, including President and Chief Operating
Officer from 2000 to 2003. Mr. Sotir received a
Bachelors Degree in Economics from Amherst College and
holds a Masters Degree from Harvard Business School.
14
TO AMEND THE ARTICLES OF INCORPORATION AND BYLAWS TO
DECLASSIFY
THE BOARD OF DIRECTORS
As part of the EGI-MBRK, L.L.C. financing that closed
September 4, 2008, or the Closing, we agreed that, at the
first annual meeting of our stockholders following the Closing,
we would take all lawful action to solicit stockholder approval
to adopt amendments to our certificate of incorporation and
bylaws providing for the declassification of our board of
directors and the annual election of all directors. The board of
directors recommends approval of an amendment to
Article VI(A) of our seventh restated certificate of
incorporation, or the Certificate of Incorporation, and
Article III (3.3) of our bylaws, or the Bylaws, that would
declassify the board and cause each director to be elected
annually for a one-year term.
Article VI(A) of our Certificate of Incorporation and
Article III (3.3) of our Bylaws currently provide that our
board is divided into three classes as nearly equal in number as
possible, with each class being elected every three years and
with the term of one class expiring at each annual meeting of
stockholders. If the proposed amendments are approved by the
requisite vote of our stockholders, the classification of the
board of directors will be phased out as follows:
|
|
|
|
|
The term of office of those directors elected at the 2009 annual
meeting will end at the 2012 annual meeting, at which those
directors will be eligible to stand for re-election for a
one-year term.
|
|
|
|
Those continuing directors whose current terms expire at the
2010 or 2011 annual meetings, respectively, will serve the
remainder of their terms (
i.e.
, until the 2010 or 2011
annual meetings, respectively), and thereafter will be eligible
to stand for re-election for a one-year term.
|
|
|
|
Any director chosen as a result of a newly-created directorship
or to fill a vacancy on the board will hold office until the
next annual meeting, at which the director will be eligible to
stand for re-election for a one-year term.
|
If our stockholders do not approve these amendments, the board
will remain classified and the directors will continue to be
elected to serve three-year terms, subject to their earlier
death, resignation or removal. If approved, this proposal will
become effective upon the filing of restated certificate of
incorporation containing the amendment to the Certificate of
Incorporation with the Delaware Secretary of State, which we
intend to do promptly after the Annual Meeting, if stockholder
approval is obtained.
The board is committed to good corporate governance and has
periodically considered the advantages and disadvantages of
maintaining a classified board. In the past, the board has
concluded that a classified board structure was in the best
interests of MiddleBrook and its stockholders. A classified
board generally provides for continuity and stability, promotes
a long-term focus and may assist in the event of an unsolicited
takeover attempt because the acquirer, being unable to
unilaterally replace the entire board in a single election, may
be more likely to negotiate with the board on pricing and other
acquisition terms. As a part of the EGI transaction, we agreed
to solicit stockholder approval to adopt amendments to our
Certificate of Incorporation and Bylaws to provide for the
declassification of the board of directors and the annual
election of all directors. In this regard, the board recognizes
that many investors and commentators believe that the election
of directors is the primary means for stockholders to influence
corporate governance policies and hold management accountable
for implementing those policies. The board also takes note of
the fact that annual elections of directors are in line with
emerging corporate governance practices, providing stockholders
with the opportunity to register their views on the performance
of the entire board each year.
The board has unanimously approved the amendments and determined
to recommend that stockholders approve the amendment to
Article VI(A) of our Certificate of Incorporation and
Article III (3.3) of our Bylaws to provide for the
declassification of the board of directors. Copies of these
proposed amendments are attached to this Proxy Statement as
Appendix
A.
This proposal requires the affirmative
vote of
66
2
/
3
%
of the shares outstanding and entitled to vote generally in the
election of directors. For this vote, abstentions and broker
non-votes have the effect of a vote against this proposal.
The Board
of Directors recommends a vote FOR Proposal 2.
15
APPROVAL OF THE AMENDMENT TO THE MIDDLEBROOK PHARMACEUTICALS,
INC.
STOCK INCENTIVE PLAN
The board of directors adopted an amendment to the MiddleBrook
Pharmaceuticals, Inc. Stock Incentive Plan, or the Plan, on
February 11, 2009, subject to stockholder approval, to
increase the number of shares reserved for issuance thereunder
by 3,500,000 shares of our common stock, which would
increase the maximum number of shares of common stock reserved
for issuance under the Plan from 16,348,182 shares to
19,848,182 shares, or the Plan Amendment. We believe that
our ability to award incentive compensation based on equity in
MiddleBrook is critical to our continued success in attracting,
motivating and retaining key personnel and remaining competitive.
Our Board of Directors has unanimously approved the Plan
Amendment and has determined that it is advisable and in the
best interest of the stockholders and recommends that you vote
FOR Proposal 3.
The following is a summary of the material provisions of the
Plan. This summary is qualified in its entirety by reference by
the specific language of the Plan as proposed to be amended,
which is annexed to this Proxy Statement as
Appendix
B.
General
Shares Available under the Plan.
The number of
shares of common stock currently reserved for issuance under the
Plan is 16,348,182 shares. The Plan Amendment will, if
approved, increase the maximum number of shares of common stock
reserved for issuance under the Plan by 3,500,000 shares to
19,848,182 shares. If any award, or portion of an award,
under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated,
surrendered or canceled as to any shares, or if any shares of
common stock are repurchased at or below cost by us or
surrendered to us in connection with any award (whether or not
such surrendered shares were acquired pursuant to any award), or
if any shares are withheld by us, the shares subject to such
award and the repurchased, surrendered or withheld shares will
thereafter be available for further awards under the Plan. As of
April 25, 2009 the fair market value of a share of common
stock, determined by the closing bid price per share of common
stock on such date as quoted on the Nasdaq Global Market, was
$[ ].
The maximum number of shares of common stock currently subject
to awards of any combination that may be granted under the Plan
during any one fiscal year of the Company to any one individual
is limited to 3,000,000 shares.
Administration.
The Plan is administered by
the board of directors or the Compensation Committee of the
board of directors, but may be administered by a committee or
committees as the board of directors may appoint from time to
time. The administrator has full power and authority to take all
actions necessary to carry out the purpose and intent of the
Plan, including, but not limited to, the authority to:
(1) determine who is eligible for awards, and when such
awards will be granted; (2) determine the types of awards
to be granted; (3) except for automatic grants to
non-employee directors, determine the number of shares covered
by or used for reference purposes for each award;
(4) impose such terms, limitations, restrictions and
conditions upon any award as the administrator deems
appropriate; (5) modify, amend, extend, renew or reprice
outstanding awards, or accept the surrender of outstanding
awards and substitute new awards; (6) accelerate or
otherwise change the time in which an award may be exercised or
becomes payable and to waive or accelerate the lapse, in whole
or in part, of any restriction or condition with respect to an
award, including, but not limited to, any restriction or
condition on the vesting or exercisability of an award following
termination of any grantees employment or other
relationship with the Company; (7) establish objectives and
conditions, if any, for earning awards and determining whether
awards will be paid after the end of a performance period; and
(8) establish, amend modify, administer or terminate
sub-plans, and prescribe, amend and rescind rules and
regulations relating to such sub-plans.
In the event of a stock dividend, stock split or reverse stock
split affecting the common stock: (1) the maximum number of
shares as to which we may grant awards under the Plan and the
maximum number of shares with respect to which we may grant
awards during any one fiscal year to any individual,
(2) the number of shares subject to automatic director
grants, and (3) the number of shares covered by and the
exercise price and other terms of
16
outstanding awards, will be adjusted to reflect such event
unless the board of directors determines that no such adjustment
will be made.
Except as provided above, in the event of any change affecting
us or our common stock, or our capitalization, by reason of a
spin-off,
split-up,
dividend, recapitalization, merger, consolidation business
combination or exchange of shares and the like, the
administrator, in its discretion and without the consent of the
holders of the awards, will make: (1) appropriate
adjustments to the maximum number and kind of shares reserved
for issuance or with respect to which awards may be granted
under the Plan (in the aggregate and with respect to any
individual during any one fiscal year of the Company), and to
the number, kind and price of shares covered by outstanding
awards; and (2) any other adjustments in outstanding
awards, including but not limited to reducing the number of
shares subject to awards or providing or mandating alternative
settlement methods such as settlement of the awards in cash or
in shares of common stock or other securities of the Company or
of any other entity, or in any other matters which relate to
awards as the administrator determines in its discretion to be
necessary or appropriate.
Without the consent of award holders, the administrator may make
adjustments in the terms and conditions of, and the criteria
included in, awards in recognition of unusual or nonrecurring
events affecting us, or our financial statements or any
affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the administrator determines
that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan and outstanding
awards.
Participation.
Participation in the Plan is
open to all of our employees, officers, directors and other
individuals providing bona fide services to us or any of our
affiliates, as the administrator may select from time to time.
In addition, the administrator may also grant awards to
individuals in connection with hiring, retention, or otherwise
prior to the date the individual first performs services for the
us or an affiliate, provided that such awards will not become
vested or exercisable before the date the individual first
begins working. As of April 15, 2009, we had approximately
375 eligible participants under the Plan.
Transferability.
Except as otherwise
determined by the administrator, and in any event in the case of
an incentive stock option or a stock appreciation right granted
with respect to an incentive stock option, no award granted
under the Plan will be transferable by a grantee otherwise than
by will or the laws of descent and distribution.
Type of
Awards
The Plan allows for the grant of stock options, stock
appreciation rights, stock awards, phantom stock awards,
performance awards, performance-based stock awards and other
stock-based awards. The administrator may grant these awards
separately or in tandem with other awards. The administrator
will also determine the prices, expiration dates and other
material conditions governing the exercise of the awards, other
than automatic option grants to non-employee directors, which
are described below.
Stock Options.
The Plan allows the
administrator to grant either awards of incentive stock options,
as that term is defined in section 422 of the Internal
Revenue Code, or nonqualified stock options; provided, however,
that only our employees or employees of our subsidiaries may
receive incentive stock option awards. All incentive stock
options and nonqualified stock options granted will have an
exercise price at least equal to fair market value on the date
of grant. The option holder may pay the exercise price in cash,
by tendering shares of our common stock, by a combination of
cash and shares, a broker-assisted cashless exercise, or by any
other means the administrator approves.
Option Grants to Non-Employee
Directors.
Automatic option grants are made under
the Plan to non-employee directors as follows: (1) each
person who first becomes a non-employee director after
September 2, 2003 will be granted an option to purchase
30,000 shares of common stock on the date on which he or
she is initially elected or appointed to the board, and such
option will vest in 36 equal, monthly installments, in arrears,
beginning immediately following the grant date, and
(2) each non-employee director will be granted an
additional option to purchase 20,000 shares of common
stock, or an option to purchase 30,000 shares of common
stock to the chairman of the board of directors if he or she is
a non-employee director, on the date of each annual general
stockholders
17
meeting at which members of the board are elected or re-elected;
provided, however, that he or she continues to serve as a
non-employee director immediately following the meeting. Such
option will vest in 12 equal, monthly installments, in arrears,
beginning immediately following the grant date.
The exercise price per share for each such option will be the
common stocks fair market value on the date of grant of
the option. None of these options will become vested with
respect to any shares of common stock after the date on which
the non-employee director ceases to serve as a member of the
board. The options may be exercised from time to time, in whole
or in part, prior to the earlier of: (1) 180 days
after a grantee ceases to serve as a director (one year if the
grantee ceases to serve because of his or her death or permanent
and total disability); or (2) the tenth anniversary of the
date of grant. In the event of a change in control of
MiddleBrook (as defined in the Plan), any outstanding options
that were granted pursuant to these provisions prior to the date
of such change in control will be 100% vested and exercisable on
the date of, and immediately before, such change in control.
The options may be exercised by notice to us at our principal
executive offices. Payment of the exercise price may be made by
delivery of cash or check to the order MiddleBrook in an amount
equal to the exercise price, or to the extent permitted by the
us, by delivery to us of shares of our common stock already
owned that are mature shares under Generally
Accepted Accounting Principles of the United States and having a
fair market value equal in amount to the exercise price of the
option being exercised, or a combination thereof.
Stock Appreciation Rights.
The Plan allows the
administrator to grant awards of stock appreciation rights
(SARs) which entitle the holder to receive a payment
in cash, in shares of common stock, or in a combination of both,
having an aggregate value equal to the spread on the date of
exercise between the fair market value of the underlying shares
on that date and the base price of the shares specified in the
grant agreement.
Stock and Phantom Stock Awards.
The Plan
allows the administrator to grant restricted or unrestricted
stock awards, or awards denominated in stock-equivalent units to
eligible participants with or without payment of consideration
by the grantee. Stock awards and phantom stock awards may be
paid in cash, in shares of common stock, or in a combination of
both.
Performance-Based Stock Awards.
The
administrator may grant stock awards in a manner constituting
qualified performance-based compensation within the
meaning of Internal Revenue Code Section 162(m), to
preserve the tax-deductibility of such awards. The grant of, or
lapse of restrictions with respect to, performance-based stock
awards will be based upon one or more performance measures and
objective performance targets to be attained relative to those
performance measures, all as determined by the administrator.
Performance targets may include minimum, maximum and target
levels of performance, with the size of the performance-based
stock award or the lapse of restrictions with respect thereto
based on the level attained. Performance measures
means the criteria established by the administrator relating to
any of the following, as it may apply to an individual, one or
more business units, divisions or subsidiaries, or on a
Company-wide basis, and in either absolute terms or relative to
the performance of one or more comparable companies or an index
covering multiple companies: revenue; earnings before interest,
taxes, depreciation and amortization (EBITDA); income before
income taxes and minority interests; current value
shareholders equity; corporate liquidity; financing
activities; licensing transactions; joint ventures;
co-promotional partnerships; operating income; pre- or after-tax
income; cash flow; cash flow per share; net earnings; earnings
per share; return on equity; share price performance; total
stockholder return; relative performance to a group of companies
or relevant market indices comparable to the Company, and
strategic business criteria consisting of one or more objectives
based on the Company meeting specified goals relating to
revenue, market penetration, business expansion, costs or
acquisitions or divestitures. In addition, Internal Revenue Code
Section 162(m) requires that the material terms of the
performance criteria of the Plan be disclosed to and re-approved
by the Companys stockholders at least every five years
that the Plan continues in effect. The performance criteria
under the Plan would normally be resubmitted to the
Companys stockholders in 2012 because they were last
approved by the Companys stockholders in 2007. However,
given that the above-noted amendment to the Plan is being
submitted for stockholder approval, the board of directors has
deemed it advisable to submit the performance criteria under the
Plan to the Companys stockholders for re-approval now,
rather than waiting until 2012. The board of directors is not
proposing that any of the performance criteria under the Plan be
modified.
Performance Awards.
In addition to
qualified performance-based stock awards, the Plan
allows the administrator to grant performance awards which
become payable in cash, in shares of common stock, or in a
18
combination of both, on account of attainment of one or more
performance goals established by the administrator. The
administrator may establish performance goals based on our
operating income, or that of our affiliates, or one or more
other business criteria the administrator may select that
applies to an individual or group of individuals, a business
unit, or the Company or its affiliate as a whole, over such
performance period as the administrator may designate.
Other Stock-Based Awards.
The Plan allows the
administrator to grant stock-based awards which may be
denominated in cash, common stock, or other securities, stock
equivalent units, stock appreciation units, securities or
debentures convertible into common stock, or any combination of
the foregoing. These awards may be paid in common stock or other
securities, in cash, or in a combination of common stock, other
securities and cash.
Awards
Under the Plan
Because participation and the types of awards available for
grant under the Plan, except the automatic grants to
non-employee directors as described above, are subject to the
discretion of the administrator, the benefits or amounts that
any participant or groups of participants may receive if the
Plan Amendment is approved are not currently determinable.
The following table contains the number of awards made under the
Plan to the individuals and groups listed below during the year
ended December 31, 2008.
MiddleBrook
Pharmaceuticals, Inc. Stock Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
Number of Shares of
|
|
|
|
|
|
|
Common Stock
|
|
|
Grant Date Fair
|
|
|
|
Underlying Stock
|
|
|
Value of Stock
|
|
|
|
Options
|
|
|
Option Awards
|
|
Name and Position
|
|
(#)
|
|
|
($)(1)
|
|
|
John Thievon(2)
|
|
|
2,518,819
|
|
|
|
3,475,970
|
|
President, Chief Executive Officer and Director
|
|
|
|
|
|
|
|
|
David Becker(3)
|
|
|
1,959,082
|
|
|
|
2,703,533
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
|
|
|
|
|
Beth A. Burnside Ph.D.
|
|
|
80,000
|
|
|
|
164,800
|
|
Senior Vice President, Regulatory Affairs, Compliance &
|
|
|
216,000
|
|
|
|
257,040
|
|
Strategic Planning
|
|
|
|
|
|
|
|
|
Susan P. Clausen, Ph.D.
|
|
|
50,000
|
|
|
|
103,000
|
|
Senior Vice President, Clinical Research & Medical
Affairs
|
|
|
216,000
|
|
|
|
257,040
|
|
Donald J. Treacy, Ph.D.
|
|
|
75,000
|
|
|
|
154,500
|
|
Sr. Vice President, Pharmaceutical Development &
Quality
|
|
|
216,000
|
|
|
|
257,040
|
|
Edward M. Rudnic, Ph.D.(2)
|
|
|
200,000
|
|
|
|
412,000
|
|
Former President, Chief Executive Officer and Director
|
|
|
100,000
|
|
|
|
138,000
|
|
Robert C. Low, CPA(3)
|
|
|
60,000
|
|
|
|
123,600
|
|
Former Vice President, Finance, Chief Financial Officer and
Treasurer
|
|
|
|
|
|
|
|
|
Robert W. Bannon, CFA(4)
|
|
|
50,000
|
|
|
|
103,000
|
|
Former Vice President, Investor Relations and
Corporate Communications
|
|
|
|
|
|
|
|
|
Darren W. Buchwald(4)
|
|
|
30,000
|
|
|
|
61,800
|
|
Former Vice President, Commercial Development,
Sales and Marketing
|
|
|
|
|
|
|
|
|
Current Executive Officer Group
|
|
|
5,980,901
|
|
|
|
8,269,923
|
|
Non-Executive Officer Director Group
|
|
|
690,000
|
|
|
|
922,800
|
|
Non-Executive Officer Employee Group
|
|
|
2,477,100
|
|
|
|
3,120,580
|
|
|
|
|
(1)
|
|
Represents the fair value of each stock option as of the date it
was granted, in accordance with SFAS 123R and using a
Black-Scholes valuation model. See Note 18 in our annual
report on
Form 10-K
for the year ended
|
19
|
|
|
|
|
December 31, 2008 for a discussion of assumptions made by
us in determining SFAS 123R values and compensation costs
of our equity awards.
|
|
(2)
|
|
Dr. Rudnics employment with the Company terminated on
September 4, 2008. Pursuant to the consulting agreement
with Dr. Rudnic all options granted prior to his
termination of employment continue to vest during the term of
the consulting agreement. We also granted an option to purchase
100,000 shares to Dr. Rudnic, pursuant to the
consulting agreement. This additional grant vests upon
expiration of the original term of Dr. Rudnics
consulting agreement with MiddleBrook (September 4, 2010),
or earlier upon a material breach of the consulting agreement by
the Company. For additional information regarding
Dr. Rudnics consulting agreement, see
Certain Relationships and Related
Transactions Rudnic Consulting Agreement.
|
|
(3)
|
|
Mr. Lows employment with the Company terminated
September 4, 2008. Pursuant to the consulting agreement
with Mr. Low all options granted prior to his termination
of employment continue to vest during the term of the consulting
agreement. For additional information regarding
Mr. Lows consulting agreement, see
Certain
Relationships and Related Transactions Low
Consulting Agreement.
|
|
(4)
|
|
Mr. Bannons employment with the Company terminated on
November 15, 2008 and Mr. Buchwalds employment
with the Company terminated on September 8, 2008.
|
Amendment
and Termination
The board of directors may terminate, amend or modify the Plan
or any portion thereof at any time.
Duration
The plan will remain in effect unless earlier terminated. No
award will be granted under the Plan after October 6, 2013.
Federal
Income Tax Consequences
The following is a general summary of the current federal income
tax treatment of stock options, which would be authorized for
grants under the Plan as proposed, based upon the current
provisions of the Internal Revenue Code and regulations
promulgated thereunder.
Incentive Stock Options.
Incentive stock
options under the Plan are intended to meet the requirements of
Section 422 of the Internal Revenue Code. Generally, an
employee who is granted an incentive stock option does not
recognize taxable income at the time the option is granted or
upon its exercise. The option exercise, however, may be subject
to alternative minimum tax. Upon a disposition of the shares
more than two years after grant of the option and one year after
exercise of the option, any gain or loss is treated as long-term
capital gain or loss. If these holding periods are not
satisfied, however, the option holder will recognize ordinary
income at the time of disposition equal to the lesser of
(1) the excess of the fair market value of the shares on
the date of exercise over the purchase price, or (2) the
excess of the amount realized over the adjusted tax basis of the
shares. Any gain or loss recognized on such premature
disposition of the shares in excess of the amount treated as
ordinary income is treated as long-term or short-term capital
gain or loss, depending on the holding period. Any ordinary
income recognized by the option holder due to option exercise is
subject to tax withholding by the Company. The Company is
entitled to a deduction in the same amount as the ordinary
income recognized by the option holder.
Nonqualified Stock Options.
In general, a
grantee does not recognize any taxable income at the time the
grantee is granted a nonqualified stock option. Upon exercise,
the option holder recognizes taxable ordinary income generally
equal to the excess of the fair market value of the shares at
exercise over the purchase price. Any gain or loss recognized
upon disposition of the shares in excess of the amount treated
as ordinary income is treated as long-term or short-term capital
gain or loss, depending on the holding period. Any ordinary
income recognized by the option holder due to option exercise is
subject to tax withholding by the Company. The Company is
entitled to a deduction in the same amount as the ordinary
income recognized by the option holder.
Stock Appreciation Rights.
In general, a
grantee does not recognize any taxable income at the time the
grantee is granted SARs. Upon exercise, the grantee recognizes
ordinary income in an amount equal to the amount of any cash
received and the fair market value of any shares received. For
any shares received, any gain or loss
20
recognized upon disposition of the shares in excess of the
amount treated as ordinary income is treated as long-term or
short-term capital gain or loss, depending on the holding
period. Any ordinary income recognized by the grantee due to the
exercise is subject to tax withholding by the Company. The
Company is entitled to a deduction in the same amount as the
ordinary income recognized by the grantee.
Restricted Stock.
In general, a grantee does
not recognize any taxable income at the time the grantee is
granted restricted stock assuming the shares are granted subject
to restrictions resulting in a substantial risk of forfeiture.
If the restricted stock vests, the grantee recognizes ordinary
income in an amount equal to the fair market value of the shares
less the amount paid, if any, for the shares. Any gain or loss
recognized upon disposition of the shares in excess of the
amount treated as ordinary income is treated as long-term or
short-term capital gain or loss, depending on the holding
period. Any ordinary income recognized by the grantee is subject
to tax withholding by the Company. The Company is entitled to a
deduction in the same amount as the ordinary income recognized
by the grantee. If the grantee is granted restricted stock, the
grantee may make an election under Section 83(b) of the
Internal Revenue Code, to recognize as ordinary income in the
year that such restricted stock is granted, an amount equal to
the spread between the amount paid for such shares, if any, and
the fair market value on the date the restricted stock is
granted. The election must be made within 30 days from the
time the restricted stock is granted. If the election is made,
the grantee recognizes no further income upon the vesting of the
restricted stock and any gain or loss recognized upon
disposition of the shares in excess of the amount treated as
ordinary income is treated as long-term or short-term capital
gain or loss, depending on the holding period.
Stock and Phantom Stock Awards, Performance Awards, Other
Stock-Based Awards.
In general, a grantee does
not recognize any taxable income at the time of grant of stock
and phantom stock awards, performance awards and other
stock-based awards assuming the awards are granted subject to
restrictions resulting in a substantial risk of forfeiture. The
grantee recognizes ordinary income at the time, and to the
extent, cash or shares are delivered at the end of the period of
restriction or performance period, as the case may be, in an
amount equal to the amount of cash or fair market value of
shares earned. Any gain or loss recognized upon disposition of
the shares in excess of the amount treated as ordinary income is
treated as long-term or short-term capital gain or loss,
depending on the holding period. Any ordinary income recognized
by the grantee is subject to tax withholding by the Company. The
Company is entitled to a deduction in the same amount as the
ordinary income recognized by the grantee.
Disallowance of Deductions.
The
Section 162(m) of the Internal Revenue Code disallows
deductions by publicly held corporations for compensation in
excess of $1,000,000 paid to the corporations chief
executive officer and its four other most highly compensated
officers. However, compensation payable solely on account of
attainment of one or more performance goals is not subject to
this deduction limitation if the performance goals are
objective, pre-established and determined by a Compensation
Committee comprised solely of two or more outside directors, the
material terms under which the compensation is to be paid are
disclosed to the stockholders and approved by a majority vote,
and the Compensation Committee certifies that the performance
goals and other material terms were in fact satisfied before the
compensation is paid. Under this exception, the deduction
limitation does not apply to compensation otherwise deductible
on account of stock options and stock appreciation rights
granted at fair market value under a plan that limits the number
of shares that may be issued to any individual and which is
approved by the corporations stockholders. The Company may
approve compensation that will not meet these requirements. To
the extent compensation under the plan does not qualify as
performance-based compensation, it will be subject to the
deduction limit under Section 162(m).
Section 409A of the Internal Revenue
Code.
To the extent applicable, it is intended
that the Plan and any awards granted under the Plan comply with
the requirements of section 409A of the Internal Revenue
Code and any related regulations or other guidance promulgated
by the U.S. Department of Treasury or the Internal Revenue
Service.
21
New Hire
Stock Incentive Plan
In September 2008, our board of directors approved the New Hire
Stock Incentive Plan, or the New Hire Incentive Plan, for use in
making inducement grants of stock options to new employees
pursuant to the NASDAQ Marketplace Rule 4350(i)(1)(A)(iv)
as a material inducement for them to join MiddleBrook. The New
Hire Incentive Plan was based upon and is substantially similar
to the Plan as approved by stockholders, except that eligible
recipients are limited to prospective employees of MiddleBrook,
consistent with its purpose as an employment inducement tool.
The board of directors initially authorized
4,500,000 shares under the New Hire Incentive Plan, and as
of December 31, 2008, we had issued options to purchase
2,396,600 shares of our common stock pursuant to this plan.
Accordingly, as of January 1, 2009, 2,103,400 shares
remained available under the New Hire Incentive Plan. The
board of directors may increase shares available under the New
Hire Incentive Plan in its discretion.
This proposal requires the affirmative vote of a majority of the
shares present in person or represented by proxy at the meeting
and entitled to vote. For this vote, abstentions have the effect
of a vote against this proposal and broker non-votes will be
disregarded and will have no impact on the vote.
The Board
of Directors recommends a vote FOR approval of
Proposal 3.
22
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee has selected the firm of
PricewaterhouseCoopers LLP to serve as our independent
registered public accounting firm for the fiscal year ending
December 31, 2009. PricewaterhouseCoopers LLP has audited
our financial statements for the fiscal years ended
December 31, 2008 and 2007. A representative of
PricewaterhouseCoopers LLP is expected to be present at the
annual meeting and will have an opportunity to make a statement
if he or she desires to do so. The representative is expected to
be available to respond to appropriate questions from
stockholders. PricewaterhouseCoopers LLP currently serves as our
independent registered public accounting firm.
We are asking our stockholders to ratify the selection of
PricewaterhouseCoopers LLP as our independent registered public
accounting firm. Although ratification is not required by our
by-laws or otherwise, the board of directors is submitting the
selection of PricewaterhouseCoopers LLP to our stockholders for
ratification as a matter of good corporate practice. In the
event our stockholders fail to ratify the appointment, the Audit
Committee may reconsider this appointment. Even if the selection
is ratified, the Audit Committee in its discretion may select a
different registered public accounting firm at any time during
the year if it determines that such a change would be in the
best interests of MiddleBrook and its stockholders.
The affirmative vote of the majority of the shares present in
person or by proxy at the meeting and entitled to vote is
necessary for ratification of the selection of
PricewaterhouseCoopers LLP as our independent registered public
accounting firm. Broker non-votes are not considered shares
entitled to vote on the matter and therefore will not be taken
into account in determining the outcome of the vote on the
matter. Abstentions are considered shares entitled to vote on
the matter and therefore will have the effect of a vote against
the matter.
THE BOARD OF DIRECTORS RECOMMENDS THAT OUR STOCKHOLDERS VOTE
FOR PROPOSAL 4, THE RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP, AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2009.
23
AUDIT AND
NON-AUDIT FEES
Independent
Registered Public Accounting Firm Fees
The following table presents fees for professional audit
services rendered by PricewaterhouseCoopers LLP for the audit of
our annual financial statements for years ended
December 31, 2008 and 2007, and the fees for other services
rendered by PricewaterhouseCoopers LLP during those periods.
|
|
|
|
|
|
|
|
|
Types of Fees
|
|
2008
|
|
|
2007
|
|
|
Audit Fees(1)
|
|
$
|
457,105
|
|
|
$
|
364,608
|
|
Audit-Related Fees(2)
|
|
|
39,000
|
|
|
|
|
|
Tax Fees(3)
|
|
|
|
|
|
|
870
|
|
All Other Fees(4)
|
|
|
1,500
|
|
|
|
1,500
|
|
|
|
|
(1)
|
|
Audit Fees
Represents the aggregate fees and
expenses billed for the audit of our financial statements and
the audit of our internal control over financial reporting for
the year, the reviews of financial statements included in our
quarterly reports on
Form 10-Q,
professional services performed in connection with our
registration statements, and services provided in connection
with statutory and regulatory filings or engagements. The
increase in the basic audit fees from 2007 to 2008 is related to
the timing of the receipt of invoices for the work performed
during the periods.
|
|
(2)
|
|
Audit-Related Fees
These fees include
professional services for accounting and SEC consultations and
assistance with other transactions that are reasonably related
to the audit of the Companys annual financial statements.
PricewaterhouseCoopers LLP made no such audit related billings
in 2007.
|
|
(3)
|
|
Tax Fees
Includes fees and expenses billed
for professional services rendered for tax compliance in
connection with the review of our federal income tax return and
state tax returns.
|
|
(4)
|
|
All Other Fees
Represents the cost of
subscribing to an on-line library of authoritative accounting,
auditing and financial reporting guidance and literature.
|
The Audit Committee has considered whether the provision of
non-audit services is compatible with maintaining the
independence of our registered public accounting firm and has
concluded that the non-audit services provided by
PricewaterhouseCoopers LLP are compatible with maintaining
PricewaterhouseCoopers LLPs independence.
Pre-Approval
of Non-Audit Services
The Audit Committee has established a policy governing our use
of PricewaterhouseCoopers LLP for non-audit services. Under the
policy, management may use PricewaterhouseCoopers LLP for
non-audit services that are permitted under SEC rules and
regulations, provided that management obtains the Audit
Committees approval before such services are rendered.
During 2008 and 2007, all non-audit services were pre-approved
in accordance with this policy.
24
AUDIT
COMMITTEE REPORT
The information contained in this report shall not be deemed
to be soliciting material or to be filed
with the SEC, nor shall such information be incorporated by
reference into any filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934, except to the extent that
we specifically incorporate it by reference in such filing.
Management is responsible for the Companys financial
statements and the financial reporting process, including
internal control over financial reporting. The independent
registered public accounting firm is responsible for performing
an independent audit of the Companys financial statements
and of the Companys internal control over financial
reporting in accordance with the standards of the Public Company
Accounting Oversight Board, or PCAOB, and for issuing a report
thereon. The Audit Committees responsibility is to monitor
and oversee these processes.
In this context, the Audit Committee has met and held
discussions with management and PricewaterhouseCoopers LLP, the
Companys independent registered public accounting firm.
The Audit Committee has reviewed and discussed with management
our audited financial statements for the year ended
December 31, 2008, and the notes thereto. Management
represented to the Audit Committee that the Companys
financial statements were prepared in accordance with accounting
principles generally accepted in the United States. The Audit
Committee discussed with PricewaterhouseCoopers LLP the matters
required to be discussed by Statement on Auditing Standards
No. 61, as amended and as adopted by the PCAOB in
Rule 3200T. At regularly scheduled and special meetings
during 2008, the Audit Committee also reviewed and discussed
with both management and PricewaterhouseCoopers LLP their
reports and attestation on internal control over financial
reporting in accordance with Section 404 of the Sarbanes
Oxley Act of 2002.
The Audit Committee received the written disclosures and the
letter from PricewaterhouseCoopers LLP pursuant to the
applicable requirements of the PCAOB regarding
PricewaterhouseCoopers LLPs communications with the Audit
Committee concerning independence, and has discussed with
PricewaterhouseCoopers LLP its independence from the Company.
Based upon the Audit Committees discussion with management
and the independent registered public accounting firm and the
Audit Committees review of the representations of
management and the disclosures by the independent registered
public accounting firm to the Audit Committee, the Audit
Committee recommended to the Board of Directors that the
Companys audited financial statements be included in the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2008, for filing with the
Securities and Exchange Commission. The Audit Committee selected
PricewaterhouseCoopers LLP as the Companys independent
registered public accounting firm for 2009.
Audit Committee
Richard W. Dugan, Chairman
R. Gordon Douglas, M.D.
William C. Pate
25
MANAGEMENT
Our current executive officers are as follows:
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position(s)
|
|
John Thievon
|
|
|
41
|
|
|
President, Chief Executive Officer and Director
|
David Becker
|
|
|
42
|
|
|
Executive Vice President, Chief Financial Officer
|
Beth A. Burnside, Ph.D.
|
|
|
48
|
|
|
Senior Vice President, Regulatory Affairs, Compliance &
Strategic Planning
|
Susan P. Clausen, Ph.D.
|
|
|
44
|
|
|
Senior Vice President, Clinical Research & Medical Affairs
|
Brad Cole
|
|
|
41
|
|
|
Senior Vice President, General Counsel and Secretary
|
Frank Koos
|
|
|
47
|
|
|
Senior Vice President, Sales, Marketing & Business
Development
|
Timothy L. Miller
|
|
|
52
|
|
|
Senior Vice President, Sales Operations & Administration
|
Donald J. Treacy, Ph.D.
|
|
|
39
|
|
|
Senior Vice President, Development & Manufacturing
Operations
|
John Thievon
has served as our President, Chief Executive
Officer and a Director since September 2008. Please refer to the
biography of Mr. Thievon provided under
Proposal 1. Election of Directors
Information Concerning Director Nominees,
above.
David Becker
has been our Executive Vice President, Chief
Financial Officer since September 2008. Prior to joining us,
Mr. Becker served as an independent consultant to various
healthcare companies from March 2007 to June 2008, providing
them with chief financial officer
and/or
chief
executive officer services. In addition, Mr. Becker sat on
the board of directors of several of these healthcare companies.
From 2000 to 2007, he served as the Chief Financial Officer and
Treasurer of Adams Respiratory Therapeutics, Inc., a
pharmaceutical company, and served in various other capacities
with Adams over that period including Chief Financial and
Administrative Officer from October 2006 to February 2007, and
interim Chief Operating Officer from May 2003 to April 2004.
Prior to joining Adams, Mr. Becker was a Senior Manager in
the merger and acquisitions practice of Ernst & Young
LLP from November 1997 to September 2000. From January 1996 to
November 1997, Mr. Becker served as Controller for the Salt
Lake City-based
start-up
company RxAmerica LLC, a pharmacy benefit management and
mail-service pharmacy operation. From 1991 to 1995, he served as
a financial auditor with Ernst & Young LLP.
Mr. Becker began his professional career in 1990 as an
audit and tax accountant for the southern California-based
accounting firm of Glenn M. Gelman & Associates.
Mr. Becker earned a bachelors degree in accounting in
1990 from the University of Southern Mississippi and is a
certified public accountant and certified treasury professional.
Beth A. Burnside, Ph.D.
has served as our Senior
Vice President, Regulatory Affairs, Compliance &
Strategic Planning since May 2008. Dr. Burnside joined us
in August 2002 as Senior Director, Formulation Development, and
she was promoted to Vice President, Pharmaceutical Research in
August 2003 and Senior Vice President, Pharmaceutical Research
in October 2007. From 1993 to 2002, Dr. Burnside was
employed by Shire Laboratories Inc., a biopharmaceutical
company. While at Shire she held management positions with
increasing responsibilities in the pharmaceutics, pharmaceutical
development and the advanced drug delivery organizations. As
Vice President of the Advanced Drug Delivery division of Shire,
Dr. Burnside managed the development of the divisions
specialized controlled release and enhanced bioavailability oral
delivery formulation and product strategy. Prior to working at
Shire, Dr. Burnside gained additional experience at
Johnson & Johnson from 1991 to 1992 and at
Schering-Plough Research from 1989 to 1991. She received a B.S.
in chemistry/mathematics from Muhlenberg College in Allentown,
Pennsylvania and an M.S. in organic chemistry and a Ph.D. in
physical-organic chemistry from Drexel University.
Susan P. Clausen, Ph.D.
has served as our Senior
Vice President, Clinical Research and Medical Affairs since
September 2008. Dr. Clausen joined us as Senior Director,
Clinical Research in September 2003 and was promoted to Vice
President, Clinical Research and Regulatory Affairs in December
2004. From 1994 to 2003, Dr. Clausen
26
was employed at Shire Pharmaceutical Development, a
biopharmaceutical company. While at Shire, she held management
positions with increasing responsibilities in the
biopharmaceutical and clinical research organizations. As the
senior director of clinical research, Dr. Clausen was
responsible for clinical development programs in various
therapeutic areas including central nervous system, oncology,
virology and gastrointestinal disorders. Prior to working at
Shire, Dr. Clausen gained additional experience at TSI/
Mason Research Laboratories and at Harvard Medical School as a
post-doctoral research fellow. She received a B.S. (Hons) in
Chemistry from University College, Dublin, Ireland, an M.S. in
Forensic Science from Strathclyde University, Glasgow, Scotland
and a Ph.D. in Forensic Toxicology from the University of
Illinois at Chicago.
Brad Cole
has served as our Senior Vice President,
General Counsel and Secretary since September 2008. He was the
Associate General Counsel and Assistant Secretary at Adams
Respiratory Therapeutics, Inc., a pharmaceutical company, from
August 2004 to July 2008. From August 1999 to July 2004, he was
with the law firm of Holland & Knight LLP, in the
firms Tampa office and focused on corporate, securities
and M&A matters. He began his career in the financial
services industry and worked at several financial institutions
from 1991 to 1994. Mr. Cole earned a bachelors degree
from the University of Miami in 1990; his Juris Doctorate,
cum laude
, from Thomas M. Cooley Law School in 1998; and
a Masters of Laws in Securities and Financial Regulations,
with honors,
from the Georgetown University Law Center,
in May 1999.
Frank L. Koos
has served as our Senior Vice President,
Sales, Marketing and Business Development since November 2008.
Prior to joining us, Frank served as Vice President,
Professional Sales for Reckitt Benckiser Group PLC (formerly
Adams Respiratory Therapeutics, Inc.), a chemical and
pharmaceutical company, from September 2004 to October 2008.
From 1999 to 2004, he served as the Vice President Sales for
PharMetrics, Inc., a pharmaceutical market research company, and
from 1992 to 1999 Mr. Koos held various positions,
including Group Director, Sales and Service at IMS Health
Incorporated, a pharmaceutical market research company.
Mr. Koos started his career as a Sales Representative and a
Sales Trainer for the Ortho Pharmaceutical division of
Johnson & Johnson, and he served as a Lieutenant in
the United States Army. Mr. Koos received his Bachelor of
Arts Degree from Lehigh University.
Timothy L. Miller
has served as our Senior Vice
President, Sales Operations and Administration since September
2008. Prior to joining us, Mr. Miller served as the Vice
President Sales Operations & Training at Adams
Respiratory Therapeutics, Inc., a pharmaceutical company, from
September 2004 to July 2008. From 1986 to 2004, he held various
positions at Aventis Pharmaceuticals, a pharmaceutical company,
and its legacy companies, including Hoechst Marion Roussel,
Marion Merrell Dow, and Marion Labs. Mr. Millers
positions at Aventis and its legacy companies included Financial
Analyst, Manager Commercial Financial Services, Regional
Business Manager, Senior Manager Sales Information &
Incentives, and Director Sales Operations. Mr. Miller
graduated from Emporia State University in 1978 earning a
Bachelor of Science in Business, with a concentration in
accounting. He received his Master in Business Administration in
1983, with a concentration in finance, from Rockhurst
University, a Jesuit institution in Kansas City.
Donald J. Treacy, Ph.D.
has served as our Senior
Vice President, Development and Manufacturing Operations since
March 2008. Dr. Treacy joined us in March 2000 as Director
of Analytical Research and Development, was promoted to senior
director in March 2002, to Vice President, Analysis and
Pharmaceutical Quality in January 2004, and to Senior Vice
President, Pharmaceutical Development and Quality in October
2007. From 1993 to 2000, Dr. Treacy managed an analytical
sciences group at Shire Laboratories Inc., a biopharmaceutical
company. During his career, he held positions of increasing
responsibility in the areas of analytical development,
stability, preformulation, and chemistry portions of INDs, NDAs
and NDA supplements, as well as FDA inspections. Prior to his
career at Shire, Dr. Treacy was engaged in research at the
National Cancer Institute. Dr. Treacy received a
bachelors degree in chemistry from Roanoke College and his
Ph.D. in analytical chemistry from the University of Maryland.
27
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of
March 31, 2009, regarding the beneficial ownership of our
common stock by:
|
|
|
|
|
Each person, or group of affiliated persons, known to us to own
beneficially more than 5% of our outstanding common stock;
|
|
|
|
Each of our directors and nominees for director;
|
|
|
|
Each of our named executive officers; and
|
|
|
|
All of our directors and executive officers as a group.
|
Except as indicated by footnote, and except for community
property laws where applicable, we believe, based on information
provided to us, that the persons named in the table below have
sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them. The percentage
of beneficial ownership is based on 86,440,194 shares of
common stock deemed outstanding as of March 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
Beneficially Owned
|
|
Beneficial Owner(1)
|
|
Number(2)
|
|
|
Percent
|
|
|
Five Percent Stockholders:
|
|
|
|
|
|
|
|
|
EGI-MBRK, L.L.C.(3)
|
|
|
42,424,242
|
|
|
|
43.04
|
%
|
HealthCare Ventures group(4)
|
|
|
13,111,832
|
|
|
|
14.95
|
|
Rho Ventures group(5)
|
|
|
6,896,475
|
|
|
|
7.80
|
|
Tang Capital Partners, L.P.(6)
|
|
|
6,533,334
|
|
|
|
7.36
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
Lord James Blyth(7)
|
|
|
5,833
|
|
|
|
*
|
|
James H. Cavanaugh, Ph.D.(8)
|
|
|
13,232,239
|
|
|
|
15.07
|
|
R. Gordon Douglas, M.D.(9)
|
|
|
213,287
|
|
|
|
*
|
|
Richard W. Dugan(10)
|
|
|
133,386
|
|
|
|
*
|
|
Wayne T. Hockmeyer, Ph.D.(11)
|
|
|
139,314
|
|
|
|
*
|
|
William C. Pate(12)
|
|
|
6,667
|
|
|
|
*
|
|
Mark R. Sotir(13)
|
|
|
6,667
|
|
|
|
*
|
|
Martin A. Vogelbaum(14)
|
|
|
6,209,518
|
|
|
|
7.02
|
|
Harold R. Werner(15)
|
|
|
13,232,238
|
|
|
|
15.07
|
|
John Thievon(16)
|
|
|
133,200
|
|
|
|
*
|
|
David Becker(17)
|
|
|
133,200
|
|
|
|
*
|
|
Beth A. Burnside, Ph.D.(18)
|
|
|
246,471
|
|
|
|
*
|
|
Susan P. Clausen, Ph.D.(19)
|
|
|
208,291
|
|
|
|
*
|
|
Donald J. Treacy, Ph.D.(20)
|
|
|
223,212
|
|
|
|
*
|
|
Robert C. Low(21)
|
|
|
237,440
|
|
|
|
*
|
|
Edward M. Rudnic, Ph.D.(22)
|
|
|
1,025,409
|
|
|
|
1.17
|
|
Robert W. Bannon, CFA(23)
|
|
|
110,789
|
|
|
|
*
|
|
Darren W. Buchwald(24)
|
|
|
131,754
|
|
|
|
*
|
|
Directors and current executive officers as a group
(17 persons)(25)
|
|
|
21,054,191
|
|
|
|
23.14
|
|
|
|
|
*
|
|
Less than 1%
|
|
(1)
|
|
Unless otherwise indicated, the address of each stockholder is
c/o MiddleBrook
Pharmaceuticals, Inc., 7 Village Circle, Suite
100 Westlake, Texas 76262, or 20425 Seneca Meadows Parkway,
Germantown, Maryland 20876.
|
28
|
|
|
(2)
|
|
Beneficial ownership is determined in accordance with
Rule 13d-3
of the Exchange Act and generally includes voting and investment
power with respect to securities, subject to community property
laws, where applicable.
|
|
(3)
|
|
Includes: (i) 30,303,030 shares of common stock owned
by EGI-MBRK, L.L.C., and (ii) 12,121,212 shares of
common stock issuable upon the exercise of a warrant held by
EGI-MBRK, L.L.C. that are currently exercisable. The following
entities share the power to vote or dispose of the shares held
by EGI-MBRK, L.L.C.: EGI-Fund
(08-10)
Investors, L.L.C. (Fund
(08-10)),
which is the managing member of EGI-MBRK, L.L.C.; SZ
Investments, L.L.C. (SZI), which is the managing
member of Fund
(08-10);
and
Chai Trust Company, LLC (Trustee), which is the
trustee of the trusts (the Trusts) which indirectly
own SZI. The Trusts were established for the benefit of Samuel
Zell and members of his family. Samuel Zell is neither an
officer nor a director of the Trustee. The members of the board
of managers of Trustee are Bert Cohen, JoAnn Zell Gillis, Kellie
Zell Harper, Robert Levin, Donald J. Liebentritt, Leah Zell
Wagner and Matthew Zell. The address of EGI-MBRK, L.L.C. is
c/o Equity
Group Investments, L.L.C. 2 N. Riverside Plaza,
Chicago, Illinois 60606.
|
|
(4)
|
|
Includes: (i) 3,629,973 shares of common stock owned
by HealthCare Ventures V, L.P.;
(ii) 6,215,389 shares of common stock owned and
512,177 shares of common stock issuable upon exercise of
warrants by HealthCare Ventures VI, L.P.; and
(iii) 1,975,892 shares of common stock owned and
778,401 shares of common stock issuable upon exercise of
warrants by HealthCare Ventures VII, L.P. The address for the
HealthCare Ventures entities is 44 Nassau Street, Princeton, New
Jersey 08542.
|
|
(5)
|
|
Includes: (i) 4,330,391 shares of common stock owned
and 1,955,276 shares of common stock issuable upon exercise
of warrants held by funds managed by Rho Ventures;
(ii) 607,374 shares of common stock owned or managed
by Joshua Ruch by reason of his control over certain entities as
well as a trusteeship of a family trust; and
(iii) 1,717 shares owned by each of Habib Kairouz and
Mark Leschly. Each of the aforementioned entities and persons
disclaims beneficial ownership of the securities listed above
except to the extent of their pecuniary interest therein. The
address of Rho Ventures is Carnegie Hall Tower,
152 W. 57th Street, 23rd Floor, New York, NY
10019.
|
|
(6)
|
|
Based on a
Form S-3
filed on February 1, 2008, the number of shares includes
4,191,667 shares of Common Stock owned and
2,341,667 shares of Common Stock issuable upon exercise of
warrants by Tang Capital Partners, LP. The address for Tang
Capital Partners, LP is 4401 Eastgate Mall, San Diego, CA
92121.
|
|
(7)
|
|
Includes 5,833 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(8)
|
|
Dr. Cavanaugh is a general partner of HealthCare
Partners V, L.P., HealthCare Partners VI, L.P. and
HealthCare Partners VII, L.P., which are the general partners of
HealthCare Ventures V, L.P., HealthCare Ventures VI, L.P.
and HealthCare Partners VII, L.P., respectively. In such
capacity he may be deemed to share voting and investment power
with respect to 3,629,973 shares beneficially owned by
HealthCare Ventures V, L.P., 6,727,566 shares
beneficially owned by HealthCare Ventures VI, L.P. and
2,754,293 shares beneficially owned by HealthCare Ventures
VII, L.P., each of which is a venture capital investment
affiliate of HealthCare Ventures LLC. Dr. Cavanaugh
disclaims beneficial ownership of the shares owned by these
funds, except to the extent of his proportionate pecuniary
interest therein. Dr. Cavanaughs beneficially owned
shares also include 78,333 shares subject to stock options
currently exercisable or exercisable within 60 days of
March 31, 2009. Dr. Cavanaughs address is
c/o HealthCare
Ventures LLC, 44 Nassau Street, Princeton,
New Jersey 08542.
|
|
(9)
|
|
Includes 163,017 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(10)
|
|
Includes 128,386 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(11)
|
|
Includes 125,654 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(12)
|
|
Includes 6,667 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
29
|
|
|
(13)
|
|
Includes 6,667 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(14)
|
|
Mr. Vogelbaum is a member of the general partner of Rho
Ventures V, L.P. and a member of the managing member of Rho
Ventures V Affiliates, L.L.C. The number of shares includes
3,874,863 shares of Common Stock and warrants to purchase
1,797,459 shares of Common Stock owned by Rho
Ventures V, L.P. and 340,212 shares of Common Stock
and warrants to purchase 157,817 shares of Common Stock
owned by Rho Ventures V Affiliates, L.L.C. Mr. Vogelbaum
disclaims beneficial ownership of the shares owned by Rho
Ventures V, L.P. and Rho Ventures V Affiliates, L.L.C.
except to the extent of his proportionate pecuniary interest
therein. Also includes 39,167 shares subject to stock
options currently exercisable or exercisable within 60 days
of March 31, 2009. Mr. Vogelbaums address is
c/o Rho
Ventures, Carnegie Hall Tower, 152 W. 57th Street,
23rd Floor, New York, New York 10019.
|
|
(15)
|
|
Mr. Werner is a general partner of HealthCare
Partners V, L.P., HealthCare Partners VI, L.P. and
HealthCare Partners VII, L.P., which are the general partners of
HealthCare Ventures V, L.P., HealthCare Ventures VI, L.P.
and HealthCare Partners VII, L.P., respectively. In such
capacity he may be deemed to share voting and investment power
with respect to 3,629,973 shares beneficially owned by
HealthCare Ventures V, L.P., 6,727,566 shares
beneficially owned by HealthCare Ventures VI, L.P. and
2,754,293 shares beneficially owned by HealthCare Ventures
VII, L.P., each of which is a venture capital investment
affiliate of Healthcare Ventures LLC. Mr. Werner disclaims
beneficial ownership of the shares owned by these funds, except
to the extent of his proportionate pecuniary interest therein.
Mr. Werners beneficially owned shares also include
13,523 shares held by the Werner Family Investment Limited
Partnership and 78,333 shares subject to stock options
currently exercisable or exercisable within 60 days of
March 31, 2009. Mr. Werners address is
c/o HealthCare
Ventures LLC, 44 Nassau Street, Princeton, New Jersey 08542.
|
|
(16)
|
|
Includes 33,200 shares held by Thievon-Becker LLC.
|
|
(17)
|
|
Includes 33,200 shares held by Thievon-Becker LLC.
|
|
(18)
|
|
Includes 246,471 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(19)
|
|
Includes 208,291 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(20)
|
|
Includes 219,114 shares subject to stock options currently
exercisable or exercisable within 60 days of March 31,
2009.
|
|
(21)
|
|
Mr. Lows employment with us was terminated effective
September 4, 2008. Includes 202,350 shares subject to
stock options currently exercisable or exercisable within
60 days of March 31, 2009.
|
|
(22)
|
|
Dr. Rudnics employment with us was terminated
effective September 4, 2008. Includes 969,109 shares
subject to stock options currently exercisable or exercisable
within 60 days of March 31, 2009.
|
|
(23)
|
|
Mr. Bannons employment with us was terminated
effective November 15, 2008. Includes 109,920 shares
subject to stock options currently exercisable or exercisable
within 60 days of March 31, 2009.
|
|
(24)
|
|
Mr. Buchwalds employment with us was terminated
effective September 8, 2008. Includes 129,754 shares
subject to stock options currently exercisable or exercisable
within 60 days of March 31, 2009.
|
|
(25)
|
|
Includes 13,111,832 shares beneficially owned by HealthCare
Ventures group that are attributed to Dr. Cavanaugh and
Mr. Werner and 6,170,351 shares beneficially owned by
Rho Ventures group that are attributed to Mr. Vogelbaum.
Also includes 1,305,933 shares subject to stock options
currently exercisable or exercisable within 60 days of
March 31, 2009.
|
30
EXECUTIVE
COMPENSATION AND OTHER MATTERS
Compensation
Discussion and Analysis
This Compensation Discussion and Analysis
(CD&A) describes how our compensation program
is designed and how it operates with respect to the following
individuals, whom we refer to as our named executive officers:
|
|
|
|
|
our current President and Chief Executive Officer, John Thievon
(current CEO);
|
|
|
|
our former President and Chief Executive Officer, Edward M.
Rudnic, Ph.D. (former CEO);
|
|
|
|
our current Executive Vice President, Chief Financial Officer,
David Becker (current CFO);
|
|
|
|
our former Vice President, Finance, Chief Financial Officer and
Treasurer, Robert C. Low, CPA (former CFO);
|
|
|
|
our three other most highly paid executives:
|
|
|
|
|
|
Beth A. Burnside, Ph.D., Senior Vice President, Regulatory
Affairs, Compliance & Strategic Planning;
|
|
|
|
Susan P. Clausen, Ph.D., Senior Vice President, Clinical
Research & Medical Affairs;
|
|
|
|
Donald P. Treacy, Ph.D., Senior Vice President,
Development & Manufacturing;
|
|
|
|
|
|
two additional executive officers whose employment terminated
prior to the end of our fiscal year:
|
|
|
|
|
|
Robert W. Bannon, CFA, former Vice President, Investor Relations
and Corporate Communications; and
|
|
|
|
Darren W. Buchwald, former Vice President, Commercial
Development, Sales and Marketing.
|
As a result of the closing of a significant financing in
September 2008, our CD&A first describes the impact the
transaction had on our management team and executive
compensation. Our CD&A then describes our executive
compensation philosophy and how we design our compensation
program, with a discussion focusing on the main components of
our compensation program. We then describe the process for the
determination of the compensation of our named executive
officers in 2008, our incentive compensation targets for 2009
and several of our key executive compensation policies. In a
subsequent section, we set forth in a series of tables specific
information about the compensation for our named executive
officers in 2008.
EGI
Transaction
On July 1, 2008, we entered into a securities purchase
agreement with EGI-MBRK, L.L.C. (EGI), an affiliate
of Equity Group Investments, L.L.C., pursuant to which we agreed
to sell, and EGI agreed to purchase, 30,303,030 shares of
our common stock, and a warrant to purchase an aggregate of
12,121,212 shares of our common stock for an aggregate
purchase price of $100 million (the EGI
Transaction). As a condition to the closing of the EGI
Transaction on September 4, 2008, Mr. John Thievon
replaced Dr. Edward M. Rudnic as the Companys
President and Chief Executive Officer and Mr. David Becker
replaced Mr. Robert C. Low as the Companys Chief
Financial Officer.
Messrs. Thievon and Becker commenced full-time employment
with the Company, and Dr. Rudnic and Mr. Low
terminated employment with the Company, coincident with the
completion of the EGI Transaction. Pursuant to the terms of
their employment agreements, Dr. Rudnic and Mr. Low
received severance payments in the amount of $1,056,785 and
$326,598, respectively. In addition, two other members of our
management team, Mr. Robert W. Bannon and Mr. Darren
W. Buchwald, also terminated employment with the Company in
connection with the EGI Transaction. Pursuant to the terms of
their employment contracts, Mr. Bannon and
Mr. Buchwald received severance payments of $288,414 and
$270,486, respectively.
Upon the closing of the EGI transaction, we entered into a
consulting agreement with each of Dr. Rudnic and
Mr. Low. Under the terms of the consulting agreements, we
agreed to pay Dr. Rudnic and Mr. Low for certain
services to be provided to the Company over the term of the
agreements. Dr. Rudnic was also granted an option to
purchase 100,000 shares of our common stock pursuant to his
consulting agreement. In addition, we agreed to extend the
vesting of various stock options held by Dr. Rudnic and
Mr. Low. For more information regarding the
31
terms of the consulting agreements, see
Certain
Relationships and Related Transactions Rudnic
Consulting Agreement
and
Certain
Relationships and Related Transactions Low
Consulting Agreement.
We entered into employment agreements with Mr. Thievon and
Mr. Becker on July 1, 2008, to become effective upon
completion of the EGI Transaction. The terms of those agreements
are described elsewhere in this proxy statement. In order to
assist our Compensation Committee in determining appropriate
compensation for Messrs. Thievon and Becker, the
Compensation Committee retained Towers, Perrin,
Forster & Crosby, Inc. (Towers Perrin), an
independent compensation consultant. In addition, in order to
obtain the services of Messrs. Thievon and Becker while the
EGI Transaction was pending, on July 1, 2008, we entered
into a consulting agreement with each Mr. Thievon and
Mr. Becker. The consulting agreements with Mr. Thievon
and Mr. Becker terminated upon the completion of the EGI
transaction on September 4, 2008.
Executive
Compensation Philosophy
Our compensation philosophy is designed to:
|
|
|
|
|
promote the Companys ability to successfully attract and
retain highly qualified and motivated executives;
|
|
|
|
to provide compensation levels and programs that are competitive
with comparably sized pharmaceutical and biotechnology companies
across the U.S.;
|
|
|
|
to align the interests of executives with stockholders; and
|
|
|
|
to reward executives with incentives that are closely linked to
a balance of the Companys short- and long-term performance
goals.
|
Our executive compensation philosophy is based on two core
elements: to pay for performance and to provide a competitive
compensation package.
Pay for performance
:
We structure our
compensation program to align the interests of our executives
with the interests of our stockholders. We believe that an
employees compensation should be tied directly to helping
us achieve our mission and deliver value to our stockholders.
Therefore, a significant part of each executives pay
depends on his or her individual performance against key
objectives. The Compensation Committee (or the full Board in the
case of our CEO) assesses the individual performance of each
executive in making compensation decisions related to cash
bonuses and equity awards. The assessment of individual
performance is inherently subjective. Essentially, the
Compensation Committee (or the Board in the case of our CEO)
assesses how well an executive fulfilled his or her obligations
in the past year. This assessment includes consideration of how
well the operations or functions for which an executive is
responsible performed during the year. One factor that the
Compensation Committee (or the Board in the case of our CEO)
evaluates in making assessments of individual performance is how
well an executive performed against the performance goals set
for such executive for the relevant year. Performance goals for
each named executive officer typically include such areas as:
financial performance, organizational development/human
resources, corporate strategy/business development,
innovation/R&D, quality/regulatory, operational excellence,
board relations/governance, investor relations and leadership.
Competitive compensation
:
We believe
that a competitive compensation program is an important tool to
help attract and retain talented employees capable of leading
our business in the highly complex and competitive environment
in which we operate. We aim to pay our executives at
approximately the median level of pay of our peer group when
targeted levels of performance are achieved. By providing
compensation that is competitive with our peer companies, we
believe we can reduce the risk that our executives will be
successfully recruited by other companies.
Compensation
Program Design and Process
This section describes how we determine the design of our
executive compensation program. We believe our executive
compensation program is reasonable and appropriate because it is
aligned with our business goals to deliver value to our
stockholders.
32
Compensation
Committee
The Compensation Committee is responsible for providing
oversight of our executive compensation program for the named
executive officers as well as other members of our senior
management. The Compensation Committee reviews and evaluates the
executive compensation program on an annual basis to ensure that
the program is aligned with our compensation philosophy.
Role of
Compensation Consultant
The Compensation Committee periodically retains an independent
compensation consulting firm to provide advisory services.
Towers Perrin assisted the Compensation Committee by providing
the following services in 2008:
|
|
|
|
|
Provided competitive benchmarking and market data analysis,
including data used for reviewing the compensation of our CEO,
CFO and other named executive officers;
|
|
|
|
Reviewed and advised on certain materials provided to the
Compensation Committee for discussion and approval; and
|
|
|
|
Attended telephonically certain of the Compensation
Committees meetings in 2008.
|
Towers Perrin was also retained prior to the EGI Transaction to
provide the Compensation Committee competitive benchmarking and
market data analysis for assistance in determining the
compensation of Messrs. Thievon and Becker.
The members of the Towers Perrin team providing advice to the
Compensation Committee do not provide any other services to our
Company. Towers Perrin follows internal guidelines and practices
to guard against any conflict of interest and to ensure the
objectivity of their advice.
Role of
Company Management
The CEO makes recommendations to the Compensation Committee
concerning the compensation of the other named executive
officers and other senior management. In addition, the CEO is
involved in setting the business goals that are used as the
performance goals for the bonus incentive plan, subject to
Compensation Committee approval. The CEO works closely with the
Compensation Committee to ensure that the Compensation Committee
is provided with the appropriate information to make its
decisions, to propose recommendations for Compensation Committee
consideration and to communicate those decisions to management
for implementation.
Benchmarking
and Use of Peer Group Data
Our executive compensation program seeks to provide total
compensation at the median of the pay levels of executives with
similar roles at comparable companies when targeted levels of
performance are achieved. Use of survey data from
MiddleBrooks peers plays a significant role in the
structure of the compensation program as it is a primary input
in setting target levels for base salaries, cash bonuses and
equity awards and helps us to ensure that the compensation is
market competitive in order to retain and attract talent.
The Company participates in compensation surveys conducted by
Radford Surveys (a part of Aon Consulting) each year. The
Company has access to the resulting Radford reports, which are
specific to the pharmaceutical and biotech industry, which
provide data on salaries, bonuses, and option grants, for
specific job positions. The Company utilizes this information
when reviewing the salaries for all of its employees including
the named executive officers.
As indicated above, the Compensation Committee has, in certain
years, retained Towers Perrin, an independent consulting firm,
to conduct a study of peer companies for the purpose of
reviewing the compensation levels of our executive officers,
including the named executive officers. We use data from
companies that the Compensation Committee has selected as
comparable companies to help identify a reasonable starting
point for base salaries, cash bonuses and equity awards and then
analyze company and individual performance to determine whether
it is appropriate to move away from this baseline. Peer group
data also plays a role in what non-cash compensation is
33
paid to the named executive officers as the market data we
obtained regarding companies in our peer group helps determine
what types and amounts of non-cash compensation are appropriate
for competitive purposes. MiddleBrooks use of peer group
data is consistent among the named executive officers in that
the baseline (
i.e.
, percentile target) that is set for an
element of compensation applies to all officers regardless of
position.
Early in 2008, the Compensation Committee retained Towers Perrin
to conduct a competitive benchmarking analysis on compensation
for 2008. The report compared our executive compensation with
that of a sample of biotech companies that generally meet some
or all of the following criteria: market capitalization of
$100 million to $250 million, with between 50 and
200 employees (including near-commercial and commercial
companies), that have been public for more than two years. This
group of peer companies (the February Peer Group)
was composed of the following 27 companies:
|
|
|
|
|
|
|
|
|
Depomed Inc.
|
|
CollaGenex Pharmaceuticals Inc.
|
|
ISTA Pharmaceuticals Inc.
|
|
ImmunoGen Inc.
|
|
Vivus Inc
|
Tercica Inc.
|
|
Cerus Corp.
|
|
Trimeris Inc.
|
|
Anadys Pharmaceuticals Inc.
|
|
GenVec Inc.
|
GTx Inc.
|
|
Acadia Pharmaceuticals Inc.
|
|
Rigel Pharmaceuticals Inc.
|
|
Vical Inc.
|
|
Immunomedics Inc.
|
AVI BioPharma Inc.
|
|
Novavax Inc.
|
|
Discovery Laboratories Inc.
|
|
Genitope Corp.
|
|
Pozen Inc.*
|
BioCryst Pharmaceuticals Inc.*
|
|
Columbia Laboratories Inc.*
|
|
Barrier Therapeutics Inc.*
|
|
EPIX Pharmaceuticals Inc.*
|
|
Antigenics Inc.*
|
Panacos Pharmaceuticals Inc.*
|
|
StemCells Inc.*
|
|
|
|
|
|
|
The companies noted with a * were added in 2008 to the peer
group used in 2007 to reflect the updated benchmark criteria.
The following companies were removed in 2008 from the peer group
used in 2007: Indevus Pharmaceuticals, Momenta Pharmaceuticals,
CoTherix Inc., Idenix Pharmaceuticals, Durect Corporation,
Renovis, Array BioPharma, Genta, Avant Immunotherapeutics, and
Diversa.
When evaluating the compensation for the incoming CEO and CFO in
connection with the EGI Transaction in the summer of 2008, the
criteria for the peer group was updated to include commercial
biotechnology companies that had a market capitalization between
$200 million and $1 billion, with revenues between
$25 million and $300 million, and at least one
marketed product with a majority of revenues coming from the
companys own commercial organization. This group of peer
companies (the July Peer Group) was composed of the
following 12 companies:
|
|
|
|
|
|
|
Alkermes Inc.
|
|
Cubist Pharmaceuticals Inc.
|
|
Acorda Therapeutics Inc.
|
|
ViroPharma Incorporated
|
InterMune Inc.
|
|
CV Therapeutics Inc.
|
|
Vivus Inc.
|
|
Pozen Inc.
|
Enzon Pharmaceuticals Inc.
|
|
Durect Corporation
|
|
Omrix Biopharmaceuticals Inc.
|
|
Noven Pharmaceutials Inc.
|
Elements
of Executive Compensation in 2008
The main components of our executive compensation program are:
|
|
|
|
|
Base salary;
|
|
|
|
Annual cash incentive bonus; and
|
|
|
|
Long-term incentives equity awards.
|
We do not provide a retirement program to our employees. Below
we explain how the amounts for each executive compensation
element are determined.
Base
Salaries
Base salaries are paid in order to provide a fixed component of
compensation for the named executive officers. For 2008, base
salary target levels for all named executive officers, except
our current CFO, were set within a range that is competitive
with the 50 th percentile of salaries paid to comparable
officers at companies in our peer group. The Compensation
Committee selected the 50 th percentile as the positioning for
base salaries because, as they are the only fixed component of
compensation, they are less appropriately used to motivate
performance and thus, the Compensation Committee determined to
set them at a reasonably competitive mid-point.
The Compensation Committee sets actual individual base salaries
higher or lower than targeted base salaries for any reason that
the Compensation Committee deems relevant. Factors that the
Compensation Committee may
34
consider relevant for adjusting the targeted base salaries
include how long an officer has been at the Company and in his
or her current role, the impact of his or her position on the
Companys results and how such officers role fits
within the hierarchy of the organization.
At the Compensation Committee meeting of February 13, 2008,
the committee established the base salaries of the named
executive officers (other than our current CEO and current CFO,
who joined us later in the year, and our former CEO). For each
of these officers, the Compensation Committee concluded that the
existing base salary was generally in line with the 50 th
percentile of salaries paid to comparable officers at companies
in our February Peer Group, with the exception of an adjustment
for inflation. Accordingly, base salaries for each of these
officers were increased in 2008 by a cost of living adjustment,
which was 4.0 percent. At the Board of Directors meeting
held on February 13, 2008, the Board concluded that the
existing base salary for our former CEO was generally in line
with the
50
th
percentile
of salaries paid to comparable officers at companies in our
February Peer Group, and made a similar cost of living
adjustment. The new salaries became effective March 1, 2008.
Pursuant to his employment agreement, Mr. Thievons
base salary was set at an annual rate of $500,000. The Board of
Directors concluded that this base salary was generally in line
with the
50
th
percentile of salaries paid to CEOs at companies in our July
Peer Group. Pursuant to his employment agreement,
Mr. Beckers base salary was set at an annual rate of
$400,000. The Compensation Committee concluded that while this
base salary was higher than the salaries generally paid to CFOs
at companies in the July Peer Group, it was appropriate in light
of Mr. Beckers background and experience.
In September 2008, Susan P. Clausen was promoted from Vice
President Clinical Research and Regulatory Affairs
to Senior Vice President Clinical Research and
Medical Affairs. Dr. Clausens salary was modified so
that it would be comparable to her peers within the Company.
Annual
Cash Incentive Bonuses
Cash incentive bonuses are intended to reward Company and
individual performance by providing officers with an opportunity
to receive additional cash compensation based on both the
Companys performance relative to the financial targets
described above and the Compensation Committees assessment
of how well an officer performed his or her role during the
applicable year.
Target
Setting for 2008
Target bonus levels and benchmarking.
For
2008, cash bonus targets, expressed as a percentage of base
salary, for all named executive officers were set within a range
that is competitive with the
50
th
percentile of cash bonuses paid to comparable officers at
companies in the February Peer Group. The Compensation Committee
has the discretion to adjust each officers target as it
deems appropriate. Potential reasons for adjusting cash bonus
targets include how long an officer has been in his or her
current role, how the officers role fits within the
hierarchy of the organization, the impact of his or her position
on the Companys results and how the officers base
salary, upon which the bonus is based, has increased
historically. The February Peer Group data suggested that the
targets would maintain cash compensation within the broad middle
range of expected competitive pay given median peer performance,
so no adjustments were necessary. The 2008 targets for the
positions held by the named executive officers were as follows:
Former CEO: 50% of base salary
Senior Vice Presidents: 30% of base salary
Vice Presidents: 25% of base salary
Pursuant to their employment agreements, the target amounts for
our current CEOs and current CFOs annual cash
bonuses were as follows:
Current CEO: 55% of base salary
Current CFO: 45% of base salary
The Board of Directors concluded based on the July Peer Group
data that these bonus targets were generally in line with the 50
th percentile of bonus targets of comparable officers at
companies in our July Peer Group.
35
Elements of Bonus.
Each cash bonus target
consists of two elements: A Company performance element and an
individual performance element. For the named executive
officers, the weighting of these elements for each position is
as follows:
CEO: 100% Company performance, zero percent individual
performance
Senior Vice Presidents: 66% Company performance, 34% individual
performance
Vice Presidents: 50% Company performance, 50% individual
performance
Performance Goals for 2008.
The Companys
focus in early 2008 was to pursue a process to develop and
evaluate various strategic alternatives to enhance stockholder
value.
Determination
of Actual Cash Bonus Payouts for 2008
Achievement of Performance Goals.
On
September 4, 2008, the Company closed the EGI Transaction
and completed its strategic process. As a result, the
Companys strategic focus shifted to developing its
commercial operations, building a sales force and launching
Moxatag. The Compensation Committee therefore determined to
develop a new bonus plan with targets aligned with the
Companys new strategic focus and to cut off the
performance period and pay out, on a pro rata basis, bonuses
under the prior bonus plan, all effective September 30,
2008.
Actual Bonus Levels.
On September 30,
2008, the Company paid partial bonuses to certain members of our
management based on the targets in the plan, pro rated for the
nine-month rather than twelve-month performance period.
Specifically, the cash bonuses for Dr. Burnside,
Dr. Treacy, and Dr. Clausen were adjusted downward to
50% of target and pro rated for the nine-month period for which
bonuses were being paid. Dr. Rudnic, Mr. Low,
Mr. Bannon and Mr. Buchwald were paid 100% of their
pro-rated bonuses at the time of their termination, as provided
for in their employment agreements. In addition, no bonuses were
paid to Mr. Thievon and Mr. Becker.
Target
Setting for October 2008 through December 2009
As a result of the achievement of the Companys corporate
goal for 2008 through the EGI Transaction and the resulting
shift in our strategic focus, the Compensation Committee
determined that it was in the best interest of the Company to
establish a new bonus program for the remainder of fiscal year
2008 through the end of fiscal year 2009.
Target bonus levels and benchmarking.
For the
period from October 2008 through December 2009, cash bonus
targets, expressed as a percentage of base salary, for all named
executive officers (except our current CEO and current CFO) were
set to remain in line with the cash bonus targets of the
previous year. For the same period, the cash bonus targets,
expressed as a percentage of base salary, for our current CEO
and CFO were set within a range that is competitive with the
50
th
percentile
of cash bonuses paid to comparable officers at companies in the
July Peer Group. The Compensation Committee has the discretion
to adjust each officers target as it deems appropriate.
Potential reasons for adjusting cash bonus targets include how
long an officer has been in his or her current role, how the
officers role fits within the hierarchy of the
organization, the impact of his or her position on the
Companys results and how the officers base salary,
upon which the bonus is based, has increased historically. The
2009 targets for the positions held by the named executive
officers are as follows:
CEO: 55% of base salary
CFO: 45% of base salary
Senior Vice Presidents: 30% of base salary
Elements of Bonus.
Each cash bonus target
consists of two elements, a Company performance element and an
individual performance element. For the named executive
officers, the weighting of these elements for each position is
as follows:
CEO: 100% Company performance, zero percent individual
performance
CFO: 100% Company performance, zero percent individual
performance
Senior Vice Presidents: 85% Company performance, 15% individual
performance
36
Performance Goals.
In December 2008, the
Compensation Committee recommended and the board approved the
following four corporate goals and the relative weighting of
each goal for the purpose of awarding incentive compensation at
the end of 2009 as indicated below.
|
|
|
|
|
|
|
Goal #1: Moxatag
|
|
|
|
Achieve monthly market share of a
specified amount
|
|
Relative Weight: 60%
|
|
|
|
|
Gross consumption
sales in excess of a specified amount
|
|
|
Goal #2: Net Sales
|
|
|
|
Combined
Moxatag
tm
and
Keflex
®
net factory sales of a specified amount
|
|
Relative Weight: 10%
|
Goal #3: Working Capital
|
|
|
|
Working Capital Balance in excess of a specified amount
|
|
Relative Weight: 25%
|
Goal #4: R&D
|
|
|
|
Achievement of specified R&D milestones
|
|
Relative Weight: 5%
|
The bonus program for October 2008 through December 2009 has
various payout levels depending on our performance against the
goals. If the corporate goals are achieved, the payout is based
on a sliding scale. If we achieve 90% of our goal, 90% of the
amount attributable to the goal will be funded. The amount
funded increases proportionally up to a maximum of 200% of the
amount associated with the goal, upon reaching 200% of target.
The board has set a minimum achievement of 90% of the goal in
order to fund any bonus amount for the performance goal,
although it may, in its discretion, adjust the payout levels. We
believe that in order to achieve an overall competitive pay
program, including salary plus incentives, we need to allow for
above target incentives for achieving our goals. We feel that
this type of structure motivates executives to challenge their
teams to not only meet but exceed goals that add value to our
stockholders.
Long Term
Incentives Equity Awards
Equity awards have the potential to be a significant component
of each named executive officers compensation package. We
emphasize equity awards to motivate our named executive officers
to drive the long-term performance of the Company and to align
their interests with those of our stockholders. We believe this
emphasis is appropriate as these officers have the greatest role
in establishing the Companys direction and should have a
significant proportion of their compensation aligned with the
long-term interests of stockholders.
Structure
of Equity Compensation Program
The Compensation Committee utilizes stock options as an annual
grant to recognize that it is in the best interest of the
Company to provide a certain amount of equity to officers that
will vest as long as the officer continues to serve at
MiddleBrook, and will only have value as long as
MiddleBrooks market value increases from the date of
grant. For 2008, stock option awards, expressed as a percentage
of base salary, for our named executive officers, except for our
current CEO and current CFO, were set within a range that is
competitive with the 50th percentile of equity awards
granted to comparable officers at companies in the February Peer
Group. The annual stock option awards for our current CEO and
current CFO, expressed as a percentage of common shares
outstanding, were established by their employment agreements and
set within a range that is competitive with the 50th to
75th percentile of equity awards granted to comparable
officers at companies in the July Peer Group. The Compensation
Committee has the discretion to adjust each officers award
as it deems appropriate. Potential reasons for adjusting stock
option awards include how long an officer has been in his or her
current role, how the officers role fits within the
hierarchy of the organization, the impact of his or her position
on the Companys results and how the officers stock
options awards have increased historically.
2008
Equity Grants
In order to determine the size of equity grants to be awarded to
each named executive officer during the 2008 annual grant
process, the Compensation Committee reviewed market data on how
much equity similarly situated officers were receiving at
companies in the February Peer Group. This review focused on how
much equity should be granted to each officer in order to be
competitive with the 50th percentile of equity awards
provided to officers at companies in the February Peer Group.
The Compensation Committee approved stock option grants to the
named
37
executive officers, other than our former CEO, our current CEO,
and current CFO, on February 13, 2008, including 60,000
options to Mr. Low, 80,000 options to Dr. Burnside,
50,000 to Dr. Clausen, and 75,000 options to
Dr. Treacy. On February 13, 2008, the Board of
Directors approved, upon recommendation from the Compensation
Committee, a grant of 200,000 options to Dr. Rudnic. In
determining the actual amounts of the grants, the Compensation
Committee (or the Board in the case of Dr. Rudnic) used its
discretion to determine each named executive officers 2008
option grant.
As provided in the Companys employment agreement with
Mr. Thievon, on September 5, 2008, immediately
following the commencement of his employment, the Company
granted Mr. Thievon options to purchase
2,518,819 shares of common stock, an amount equal to 2.25%
of all the then issued and outstanding common stock plus shares
of common stock underlying all the then issued and outstanding
warrants of the Company calculated immediately following the
closing of the EGI transaction. The options vest over four
years, with 25% of such options vesting at the first anniversary
of the commencement of Mr. Thievons employment and an
additional 2.0833% of such options vesting at the end of each
month thereafter for a period of 36 months. Pursuant to his
employment agreement, Mr. Thievon is also eligible to
receive awards under the equity-based incentive compensation
plans adopted by the Company for which senior executives are
generally eligible. The specific amount, terms and conditions of
any such future award, if any, shall be determined in the sole
discretion of the Company, but with an annual target numbering
between 0.2% and 0.3% of the common stock of the Company plus
shares of common stock underlying issued and outstanding
warrants calculated at the time of the award.
As provided in the Companys employment agreement with
Mr. Becker, on September 5, 2008, immediately
following the commencement of his employment, the Company
granted Mr. Becker options to purchase
1,959,082 shares of common stock, an amount equal to 1.75%
of all issued and outstanding common stock plus shares of common
stock underlying all issued and outstanding warrants of the
Company calculated immediately following the closing of the EGI
transaction. The options vest over four years, with 25% of such
options vesting at the first anniversary of the commencement of
Mr. Beckers employment and an additional 2.0833% of
such options vesting at the end of each month thereafter for a
period of 36 months. Pursuant to his employment agreement,
Mr. Becker is also eligible to receive awards under the
equity-based incentive compensation plans adopted by the Company
for which senior executives are generally eligible. The specific
amount, terms and conditions of any such future award, if any,
shall be determined in the sole discretion of the Company, but
with an annual target numbering between 0.15% and 0.25% of the
common stock of the Company plus shares of common stock
underlying issued and outstanding warrants calculated at the
time of the award.
On September 10, 2008, in recognition of the important role
they are expected to play in connection with the future
development of our product candidates, the Board of Directors
approved the grant of an additional 216,000 stock options to
each of Dr. Burnside, Dr. Clausen and Dr. Treacy.
Other
Elements of Compensation
Severance
and change in control benefits
The Company has adopted a
change-in-control
severance pay program for nearly all employees of the Company,
including the named executive officers. The program is intended
to preserve employee morale and productivity and encourage
retention in the face of the disruptive impact of an actual or
rumored change in control of the Company. In addition, for
executives, the program is intended to align executive and
stockholder interests by enabling executives to consider
corporate transactions that are in the best interests of the
stockholders and other constituents of the Company without undue
concern over whether the transactions may jeopardize the
executives own employment. Because this program is guided
by different objectives than the regular compensation program,
decisions made under this program do not affect the regular
compensation program.
Although there are some differences in benefit levels depending
on the employees job level and seniority, the basic
elements of the program for severance benefits in connection
with a change in control are comparable for all employees:
|
|
|
|
|
Double trigger.
Unlike single
trigger plans that pay out immediately upon a change in
control, the MiddleBrook program generally requires a
double trigger a change in control
followed by an
|
38
|
|
|
|
|
involuntary or constructive loss of employment within one year
thereafter. This is consistent with the purpose of the program,
which is to provide executives with a guaranteed level of
financial protection upon loss of employment.
|
|
|
|
|
|
Covered terminations.
Executives are eligible
for payments if, within one year of the change in control, their
employment is terminated or deemed to be terminated
(i) without cause by the Company or (ii) for good
reason by the employee, each as is defined in the program.
|
|
|
|
One-year protection.
Executives who suffer a
covered termination receive up to one year (two years, in the
case of Mr. Thievon and 18 months for Mr. Becker)
of pay and benefit protection. The purpose of these provisions
is to assure employees a reasonable period of protection of
their income and core employee benefits upon which they depend
for financial security.
|
|
|
|
Severance payment.
Executives are all eligible
for one years (two years, in the case of Mr. Thievon
and 18 months for Mr. Becker) base salary plus
pro-rata cash bonus (with bonus established as the then-current
years target bonus).
|
|
|
|
Benefit continuation.
Basic employee benefits
such as health and life insurance would be continued for up to
one year following termination of employment. All executives,
including named executive officers, are entitled to one
years benefit continuation (two years, in the case of
Mr. Thievon and 18 months for Mr. Becker), with
reimbursement of the cost of benefits continuation under the
Consolidated Omnibus Benefits Reconciliation Act
(COBRA) payable by the Company over the period of
such entitlement.
|
|
|
|
Restrictive Covenants.
The executives are
required to maintain the confidentiality of the Companys
proprietary information after termination. In addition, for a
period of one year after the termination of employment, the
executives have agreed to refrain from directly or indirectly
competing with the Company, from soliciting any of the
Companys customers, partners, collaborators, or suppliers,
and from employing or engaging any of the Companys
employees.
|
|
|
|
Accelerated vesting of equity awards.
Any
unvested equity awards at the time of a change in control would
become vested.
|
|
|
|
Excise tax.
In some circumstances, the
payments or other benefits received by the employee in
connection with a change in control may exceed certain limits
established under Section 280G of the Internal Revenue
Code. The employee would then be subject to an excise tax on top
of normal federal income tax. Because of the way the excise tax
is calculated, it can impose a large burden on some employees
while similarly compensated employees will not be subject to the
tax. The costs of this excise tax would be borne by the employee.
|
For further discussion of these agreements, including the
estimated amounts that would be payable assuming a termination
date of December 31, 2008, see the
Estimated
Payments and Benefits Upon Termination or
Change-in-Control
section of this Proxy Statement.
Other
benefits
Our executives are eligible to participate in all of our
employee benefit plans, such as medical, dental, vision, group
life and disability insurance and our 401(k) plan, in each case
on the same basis as our other employees. There are no special
benefits or perquisites provided to any executive officer in
2008.
Retirement
and Other Benefits
The Company does not maintain a pension program or a deferred
compensation plan for executives or for any other employees.
MiddleBrook does offer a 401(k) Plan to any employee who wishes
to participate. However, the Company has discretion in making an
employer contribution to the 401(k) Plan and has never done so.
The named executive officers participate in the same medical and
dental benefit programs as other employees.
39
Corporate
Policies Covering Executive Compensation
Share
Ownership and Retention Guidelines
The Company does not have share ownership or retention
guidelines for its named executive officers or other employees.
Equity
Incentive Grant Mechanics and Timing
The Compensation Committee approves all grants for equity
incentives, including grants to named executive officers. Awards
granted to the CEO must be approved by the Compensation
Committee and then recommended by the committee to the Board of
Directors, which must have at least 75% of the independent
(non-management) directors of the Board approve it.
For annual awards, the grant date is the date during the first
calendar quarter when the Compensation Committee and the full
Board of Directors meet. The Compensation Committees
procedure for timing of equity grants assures that grant timing
is not being manipulated for employee gain. This date, which is
typically in late January or early to mid February, is
established by the Compensation Committee well in advance. This
first quarter grant date timing coincides with the
Companys
calendar-year-based
performance management cycle, allowing managers to deliver the
equity awards close in time to performance appraisals, which
increases the impact of the awards by strengthening the link
between pay and performance. The Company has not made any annual
equity grants during 2009 and currently does not intend to do so.
The Compensation Committee has pre-approved within certain
parameters the grants by our current CEO of new hire equity
awards and other off-cycle grants to employees below the
assistant vice president level. These grants became effective at
the end of the month during which the grant is made. The
Compensation Committee approves any grants to those employees
ranking above the assistant vice president level, including new
hire grants. Grants approved by the Compensation Committee
became effective on the date of such approval or at the end of
the month that the grant is approved.
The grant price for all awards is the fair market value of the
Companys common stock on the effective date of the grant.
The fair market value of the Companys common stock as of
any particular date is defined as the closing price of the
Companys common stock on the last trading day immediately
preceding the date in question.
Policy
Against Repricing Stock Options
The Company has a consistent policy against the repricing of
stock options.
Executive
Compensation Recovery Policy
An executive may be terminated for cause, due to dishonesty,
embezzlement, theft or fraudulent misconduct or for other
reasons. In such a case, any unpaid incentive awards as of the
date of termination would be forfeited. The Compensation
Committee has not adopted an executive compensation recovery
policy that would address the potential recovery of incentive
compensation (cash or equity) paid in previous periods that was
based on intentional misconduct and the effect of the wrongdoing
was to increase the amount of bonus or incentive compensation.
However, each executives employment agreement includes a
specific enforcement clause, in which an injunction or other
relief in court may be sought by the Company, should the
employee violate the confidentiality, work product, and
non-compete provisions of the agreement. In addition, the
Company could bring an action, either in law or equity, or seek
arbitration, in order to obtain a remedy.
40
COMPENSATION
COMMITTEE REPORT
We have reviewed and discussed the Compensation Discussion and
Analysis with management. Based on such review and discussions,
we recommended to the board of directors that the Compensation
Discussion and Analysis be incorporated by reference into
MiddleBrooks annual report on
Form 10-K
and included in this proxy statement on Schedule 14A.
Compensation Committee
Wayne T. Hockmeyer, Ph.D. (Chair)
Lord James Blyth
Mark R. Sotir
41
COMPENSATION
TABLES
Summary
Compensation Table
The following table contains summary information concerning
annual compensation for the fiscal years ended December 31,
2008, 2007 and 2006 for our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
John Thievon(4)
|
|
|
2008
|
|
|
|
159,295
|
|
|
|
|
|
|
|
252,931
|
|
|
|
90,705
|
|
|
|
502,931
|
|
President, Chief Executive
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer and Director
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Becker(5)
|
|
|
2008
|
|
|
|
127,436
|
|
|
|
|
|
|
|
196,724
|
|
|
|
72,564
|
|
|
|
396,724
|
|
Executive Vice President,
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beth A. Burnside Ph.D.
|
|
|
2008
|
|
|
|
268,667
|
|
|
|
30,420
|
|
|
|
120,048
|
|
|
|
|
|
|
|
419,135
|
|
Senior Vice President, Regulatory Affairs,
|
|
|
2007
|
|
|
|
243,655
|
|
|
|
97,500
|
|
|
|
91,352
|
|
|
|
|
|
|
|
432,507
|
|
Compliance & Strategic Planning
|
|
|
2006
|
|
|
|
229,167
|
|
|
|
53,419
|
|
|
|
160,842
|
|
|
|
|
|
|
|
443,428
|
|
Susan P. Clausen, Ph.D.(6)
|
|
|
2008
|
|
|
|
247,330
|
|
|
|
30,420
|
|
|
|
131,643
|
|
|
|
|
|
|
|
409,393
|
|
Senior Vice President,
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical Research & Medical Affairs
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald J. Treacy, Ph.D.
|
|
|
2008
|
|
|
|
268,667
|
|
|
|
30,420
|
|
|
|
128,442
|
|
|
|
|
|
|
|
427,529
|
|
Senior Vice President,
|
|
|
2007
|
|
|
|
242,289
|
|
|
|
97,500
|
|
|
|
85,308
|
|
|
|
|
|
|
|
425,097
|
|
Pharmaceutical Development & Quality
|
|
|
2006
|
|
|
|
227,260
|
|
|
|
53,015
|
|
|
|
139,855
|
|
|
|
|
|
|
|
420,130
|
|
Edward M. Rudnic, Ph.D.(7)
|
|
|
2008
|
|
|
|
292,309
|
|
|
|
|
|
|
|
346,497
|
|
|
|
1,056,785
|
|
|
|
1,695,591
|
|
Former President, Chief Executive
|
|
|
2007
|
|
|
|
413,333
|
|
|
|
260,000
|
|
|
|
395,301
|
|
|
|
|
|
|
|
1,068,634
|
|
Officer and Director
|
|
|
2006
|
|
|
|
397,467
|
|
|
|
170,000
|
|
|
|
777,873
|
|
|
|
|
|
|
|
1,345,340
|
|
Robert C. Low, CPA(8)
|
|
|
2008
|
|
|
|
175,667
|
|
|
|
|
|
|
|
131,220
|
|
|
|
326,598
|
|
|
|
633,484
|
|
Former Vice President, Finance,
|
|
|
2007
|
|
|
|
248,333
|
|
|
|
78,125
|
|
|
|
103,191
|
|
|
|
|
|
|
|
429,649
|
|
Chief Financial Officer and Treasurer
|
|
|
2006
|
|
|
|
239,115
|
|
|
|
55,500
|
|
|
|
136,113
|
|
|
|
|
|
|
|
430,728
|
|
Robert W. Bannon, CFA(9)
|
|
|
2008
|
|
|
|
194,824
|
|
|
|
|
|
|
|
39,831
|
|
|
|
270,486
|
|
|
|
505,141
|
|
Former Vice President, Investor Relations and
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Communications
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darren W. Buchwald(10)
|
|
|
2008
|
|
|
|
162,302
|
|
|
|
|
|
|
|
48,485
|
|
|
|
288,414
|
|
|
|
499,201
|
|
Former Vice President, Commercial
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development, Sales and Marketing
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Officer salaries are typically set for the period from
March 1st through February 28th of the following year.
|
|
(2)
|
|
Amount reflects the compensation cost for the year ended
December 31, 2008 for financial reporting purposes of the
named executive officers stock options, calculated in
accordance with SFAS 123R using a Black-Scholes valuation
model and includes amounts from awards granted in and prior to
2008. See Note 18 in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2008 for a discussion of
assumptions made by the Company in determining SFAS 123R
values and compensation costs of our equity awards.
|
|
(3)
|
|
Set forth below is additional information regarding amounts
disclosed in the All Other Compensation Column.
|
|
(4)
|
|
Mr. Thievon replaced Dr. Rudnic as our President,
Chief Executive Officer and Director on September 5, 2008.
|
|
(5)
|
|
Mr. Becker replaced Mr. Low as our Chief Financial
Officer on September 5, 2008.
|
|
(6)
|
|
Dr. Clausen became a named executive officer in 2008.
|
|
(7)
|
|
Dr. Rudnic was replaced by Mr. Thievon as our
President, Chief Executive Officer and Director on
September 5, 2008. Additional information regarding
Dr. Rudnics severance is set forth below in the table
titled
All Other Compensation
2008.
Additionally, we entered into a consulting
agreement with Dr. Rudnic that extends the vesting of his
pre-termination stock options in return for his consulting
services and granted an option to purchase 100,000 additional
shares to Dr. Rudnic. For more information regarding
|
42
|
|
|
|
|
Dr. Rudnics consulting agreement see
Certain
Relationships and Related Transactions Rudnic
Consulting Agreement.
|
|
(8)
|
|
Mr. Low was replaced by Mr. Becker as our Chief
Financial Officer on September 5, 2008. Additional
information regarding Mr. Lows severance is set forth
below in the table titled
All Other
Compensation 2008.
Additionally, we
entered into a consulting agreement with Mr. Low that
extends the vesting of his pre-termination stock options in
return for his consulting services. For more information
regarding Mr. Lows consulting agreement see
Certain Relationships and Related
Transactions Low Consulting Agreement.
|
|
(9)
|
|
Mr. Bannon was terminated on November 15, 2008 and was
not deemed to be a named executive officer prior to 2008.
Additional information regarding Mr. Bannons
severance is set forth below in the table titled
All
Other Compensation 2008.
|
|
(10)
|
|
Mr. Buchwald was terminated on September 8, 2008 and
was not deemed to be a named executive officer prior to 2008.
Additional information regarding Mr. Buchwalds
severance is set forth below in the table titled
All
Other Compensation 2008.
|
All Other
Compensation 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro-rata
|
|
|
Pro-rata
|
|
|
|
|
|
|
Consulting
|
|
|
Salary
|
|
|
Accrued/Unpaid
|
|
|
Accrued/Unpaid
|
|
|
Health & Welfare
|
|
Name and Principal Position
|
|
Fees
|
|
|
Severance
|
|
|
Vacation
|
|
|
Bonus
|
|
|
Benefits
|
|
|
John Thievon(1)
|
|
|
90,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Chief Executive
Officer and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Becker(2)
|
|
|
72,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President,
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward M. Rudnic, Ph.D.(3)
|
|
|
|
|
|
|
843,053
|
|
|
|
28,288
|
|
|
|
180,000
|
|
|
|
5,444
|
|
Former President, Chief Executive Officer and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert C. Low, CPA(4)
|
|
|
|
|
|
|
256,499
|
|
|
|
12,250
|
|
|
|
54,087
|
|
|
|
3,762
|
|
Former Vice President,
Finance, Chief Financial
Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert W. Bannon, CFA(5)
|
|
|
|
|
|
|
213,872
|
|
|
|
7,488
|
|
|
|
47,320
|
|
|
|
1,806
|
|
Former Vice President, Investor Relations and Corporate
Communications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darren W. Buchwald(5)
|
|
|
|
|
|
|
234,317
|
|
|
|
9,135
|
|
|
|
39,527
|
|
|
|
5,434
|
|
Former Vice President, Commercial Development, Sales and
Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Mr. Thievon provided consulting services to MiddleBrook
from July 1, 2008 to September 4, 2008 and received
$90,750 of compensation for such services.
|
|
(2)
|
|
Mr. Becker provided consulting services to MiddleBrook from
July 1, 2008 to September 4, 2008 and received $75,564
of compensation for such services.
|
|
(3)
|
|
Dr. Rudnic was replaced by Mr. Thievon on
September 5, 2008, and received these amounts pursuant to
the terms of his employment agreement.
|
|
(4)
|
|
Mr. Low was replaced by Mr. Becker on
September 5, 2008 and received these amounts pursuant to
the terms of his employment agreement.
|
|
(5)
|
|
Mr. Bannon and Mr. Buchwalds employment with the
Company terminated on November 15, 2008 and
September 8, 2008, respectively. Each received the amounts
indicated above pursuant to the terms of their employment
agreements.
|
43
Grants of
Plan-Based Awards Table
The following table sets forth each equity award granted to our
named executive officers during the year ended December 31,
2008. No stock options were repriced or materially modified
during the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Grant Date Fair
|
|
|
|
|
|
|
Securities
|
|
|
Base Price of
|
|
|
Value of
|
|
|
|
|
|
|
Underlying
|
|
|
Stock Option
|
|
|
Stock Option
|
|
|
|
|
|
|
Stock Options
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
Grant Date
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)(1)
|
|
|
John Thievon
|
|
|
09/05/2008
|
|
|
|
2,518,819
|
|
|
|
2.06
|
|
|
|
3,475,970
|
|
David Becker
|
|
|
09/05/2008
|
|
|
|
1,959,082
|
|
|
|
2.06
|
|
|
|
2,703,533
|
|
Beth A. Burnside, Ph.D.
|
|
|
09/10/2008
|
|
|
|
216,000
|
|
|
|
1.77
|
|
|
|
164,800
|
|
|
|
|
02/13/2008
|
|
|
|
80,000
|
|
|
|
3.08
|
|
|
|
257,040
|
|
Susan P. Clausen, Ph.D.
|
|
|
09/10/2008
|
|
|
|
216,000
|
|
|
|
1.77
|
|
|
|
103,000
|
|
|
|
|
02/13/2008
|
|
|
|
50,000
|
|
|
|
3.08
|
|
|
|
257,040
|
|
Donald J. Treacy, Ph.D.
|
|
|
09/10/2008
|
|
|
|
216,000
|
|
|
|
1.77
|
|
|
|
154,500
|
|
|
|
|
02/13/2008
|
|
|
|
75,000
|
|
|
|
3.08
|
|
|
|
257,040
|
|
Edward M. Rudnic, Ph.D.(2)
|
|
|
09/05/2008
|
|
|
|
100,000
|
|
|
|
2.06
|
|
|
|
412,000
|
|
|
|
|
02/13/2008
|
|
|
|
200,000
|
|
|
|
3.08
|
|
|
|
138,000
|
|
Robert C. Low, CPA(3)
|
|
|
02/13/2008
|
|
|
|
60,000
|
|
|
|
3.08
|
|
|
|
123,600
|
|
Robert W. Bannon, CFA(4)
|
|
|
02/13/2008
|
|
|
|
50,000
|
|
|
|
3.08
|
|
|
|
103,000
|
|
Darren W. Buchwald(4)
|
|
|
02/13/2008
|
|
|
|
30,000
|
|
|
|
3.08
|
|
|
|
61,800
|
|
|
|
|
(1)
|
|
Represents the fair value of each stock option as of the date it
was granted, in accordance with SFAS 123R and using a
Black-Scholes valuation model. See Note 18 in our Annual
Report on
Form 10-K
for the year ended December 31, 2008 for a discussion of
assumptions made by us in determining SFAS 123R values and
compensation costs of our equity awards.
|
|
(2)
|
|
Dr. Rudnic was replaced by Mr. Thievon on
September 5, 2008. Pursuant to the consulting agreement
with Dr. Rudnic all options granted prior to his
termination of employment continue to vest during the term of
the consulting agreement. We also granted an option to purchase
100,000 shares to Dr. Rudnic, pursuant to the
consulting agreement. This additional grant vests upon
expiration of the original term of Dr. Rudnics
consulting agreement with MiddleBrook (September 4, 2010),
or earlier upon a material breach of the consulting agreement by
us. For additional information regarding Dr. Rudnics
consulting agreement, see
Certain Relationships and
Related Transactions Rudnic Consulting
Agreement.
|
|
(3)
|
|
Mr. Low was replaced by Mr. Becker on
September 5, 2008. Pursuant to the consulting agreement
with Mr. Low all options granted prior to his termination
of employment continue to vest during the term of the consulting
agreement. For additional information regarding
Mr. Lows consulting agreement, see
Certain
Relationships and Related Transactions Low
Consulting Agreement.
|
|
(4)
|
|
Mr. Bannon and Mr. Buchwalds employment with us
terminated on November 15, 2008 and September 8, 2008,
respectively.
|
44
Outstanding
Equity Awards at Fiscal Year-End Table
The following table sets forth information regarding each
unexercised stock option held by each of our named executive
officers as of December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Stock Option
|
|
|
|
|
|
|
Stock Options
|
|
|
Stock Options
|
|
|
Exercise
|
|
|
Stock Option
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
John Thievon
|
|
|
|
|
|
|
2,518,819
|
(4)
|
|
|
2.06
|
|
|
|
9/4/2018
|
|
David Becker
|
|
|
|
|
|
|
1,959,082
|
(4)
|
|
|
2.06
|
|
|
|
9/4/2018
|
|
Beth A. Burnside, Ph.D.
|
|
|
24,639
|
|
|
|
|
(1)
|
|
$
|
1.41
|
|
|
|
9/1/2013
|
|
|
|
|
50,000
|
|
|
|
|
(2)
|
|
$
|
8.45
|
|
|
|
2/24/2014
|
|
|
|
|
50,000
|
|
|
|
|
(2)
|
|
$
|
4.05
|
|
|
|
1/23/2015
|
|
|
|
|
26,458
|
|
|
|
13,542
|
(2)
|
|
$
|
1.48
|
|
|
|
1/24/2016
|
|
|
|
|
23,958
|
|
|
|
26,042
|
(2)
|
|
$
|
2.47
|
|
|
|
1/23/2017
|
|
|
|
|
16,666
|
|
|
|
63,334
|
(2)
|
|
$
|
3.08
|
|
|
|
2/13/2018
|
|
|
|
|
13,500
|
|
|
|
202,500
|
(2)
|
|
$
|
1.77
|
|
|
|
9/9/2018
|
|
Susan P. Clausen, Ph.D.
|
|
|
30,000
|
|
|
|
|
(2)
|
|
$
|
8.40
|
|
|
|
9/14/2014
|
|
|
|
|
50,000
|
|
|
|
|
(2)
|
|
$
|
4.05
|
|
|
|
1/23/2015
|
|
|
|
|
36,457
|
|
|
|
13,543
|
(2)
|
|
$
|
1.48
|
|
|
|
1/24/2016
|
|
|
|
|
28,750
|
|
|
|
31,250
|
(2)
|
|
$
|
2.47
|
|
|
|
1/23/2017
|
|
|
|
|
10,417
|
|
|
|
39,583
|
(2)
|
|
$
|
3.08
|
|
|
|
2/13/2018
|
|
|
|
|
13,500
|
|
|
|
202,500
|
(2)
|
|
$
|
1.77
|
|
|
|
9/9/2018
|
|
Donald J. Treacy, Ph.D.
|
|
|
10,928
|
|
|
|
|
(2)
|
|
$
|
10.00
|
|
|
|
10/15/2013
|
|
|
|
|
50,000
|
|
|
|
|
(2)
|
|
$
|
8.45
|
|
|
|
2/24/2014
|
|
|
|
|
50,000
|
|
|
|
|
(2)
|
|
$
|
4.05
|
|
|
|
1/23/2015
|
|
|
|
|
11,457
|
|
|
|
13,543
|
(2)
|
|
$
|
1.48
|
|
|
|
1/24/2016
|
|
|
|
|
26,354
|
|
|
|
28,646
|
(2)
|
|
$
|
2.47
|
|
|
|
1/23/2017
|
|
|
|
|
15,624
|
|
|
|
59,376
|
(2)
|
|
$
|
3.08
|
|
|
|
2/13/2018
|
|
|
|
|
13,500
|
|
|
|
202,500
|
(2)
|
|
$
|
1.77
|
|
|
|
9/9/2018
|
|
Edward M. Rudnic, Ph.D.(7)
|
|
|
40,984
|
|
|
|
|
(1)
|
|
$
|
0.62
|
|
|
|
6/3/2013
|
|
|
|
|
400,000
|
|
|
|
|
(2)
|
|
$
|
10.00
|
|
|
|
10/15/2013
|
|
|
|
|
150,000
|
|
|
|
|
(2)
|
|
$
|
8.45
|
|
|
|
2/24/2014
|
|
|
|
|
150,000
|
|
|
|
|
(2)
|
|
$
|
4.55
|
|
|
|
1/27/2015
|
|
|
|
|
70,833
|
|
|
|
29,167
|
(2)
|
|
$
|
1.79
|
|
|
|
2/1/2016
|
|
|
|
|
68,750
|
|
|
|
81,250
|
(2)
|
|
$
|
2.93
|
|
|
|
1/31/2017
|
|
|
|
|
41,666
|
|
|
|
158,334
|
(2)
|
|
$
|
3.08
|
|
|
|
2/13/2018
|
|
|
|
|
|
|
|
|
100,000
|
(6)
|
|
$
|
2.06
|
|
|
|
9/4/2018
|
|
Robert C. Low, CPA(7)
|
|
|
6,831
|
|
|
|
|
(1)
|
|
$
|
1.41
|
|
|
|
9/1/2013
|
|
|
|
|
30,000
|
|
|
|
|
(2)
|
|
$
|
8.40
|
|
|
|
9/14/2014
|
|
|
|
|
25,000
|
|
|
|
5,000
|
(2)
|
|
$
|
4.80
|
|
|
|
5/24/2015
|
|
|
|
|
20,000
|
|
|
|
|
(3)
|
|
$
|
0.93
|
|
|
|
9/6/2015
|
|
|
|
|
15,416
|
|
|
|
4,584
|
(2)
|
|
$
|
1.36
|
|
|
|
10/25/2015
|
|
|
|
|
36,457
|
|
|
|
13,543
|
(2)
|
|
$
|
1.48
|
|
|
|
1/24/2016
|
|
|
|
|
13,541
|
|
|
|
11,459
|
(2)
|
|
$
|
4.67
|
|
|
|
10/16/2016
|
|
|
|
|
19,166
|
|
|
|
20,834
|
(2)
|
|
$
|
2.47
|
|
|
|
1/23/2017
|
|
|
|
|
12,500
|
|
|
|
47,500
|
(2)
|
|
$
|
3.08
|
|
|
|
2/13/2018
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Stock Option
|
|
|
|
|
|
|
Stock Options
|
|
|
Stock Options
|
|
|
Exercise
|
|
|
Stock Option
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
Robert W. Bannon, CFA(8)
|
|
|
16,400
|
|
|
|
|
(2)
|
|
$
|
8.45
|
|
|
|
2/24/2014
|
|
|
|
|
20,000
|
|
|
|
|
(2)
|
|
$
|
2.81
|
|
|
|
10/31/2014
|
|
|
|
|
10,000
|
|
|
|
|
(3)
|
|
$
|
0.93
|
|
|
|
9/6/2015
|
|
|
|
|
11,249
|
|
|
|
|
(2)
|
|
$
|
1.36
|
|
|
|
10/25/2015
|
|
|
|
|
12,374
|
|
|
|
|
(2)
|
|
$
|
1.48
|
|
|
|
1/24/2016
|
|
|
|
|
13,020
|
|
|
|
|
(2)
|
|
$
|
4.67
|
|
|
|
10/16/2016
|
|
|
|
|
17,499
|
|
|
|
|
(2)
|
|
$
|
2.47
|
|
|
|
1/23/2017
|
|
|
|
|
9,378
|
|
|
|
|
(2)
|
|
$
|
3.08
|
|
|
|
2/13/2018
|
|
Darren W. Buchwald(8)
|
|
|
15,049
|
|
|
|
|
(1)
|
|
$
|
1.41
|
|
|
|
9/1/2013
|
|
|
|
|
20,000
|
|
|
|
|
(2)
|
|
$
|
8.45
|
|
|
|
2/24/2014
|
|
|
|
|
43,749
|
|
|
|
|
(2)
|
|
$
|
4.05
|
|
|
|
1/23/2015
|
|
|
|
|
7,000
|
|
|
|
|
(5)
|
|
$
|
0.93
|
|
|
|
9/6/2015
|
|
|
|
|
32,291
|
|
|
|
|
(2)
|
|
$
|
1.48
|
|
|
|
1/24/2016
|
|
|
|
|
7,915
|
|
|
|
|
(2)
|
|
$
|
2.47
|
|
|
|
1/23/2017
|
|
|
|
|
3,750
|
|
|
|
|
(2)
|
|
$
|
3.08
|
|
|
|
2/13/2018
|
|
|
|
|
(1)
|
|
Stock option vests 25% on each of the four anniversaries of the
grant date, assuming continued employment.
|
|
(2)
|
|
Stock option vests at the rate of 1/48th of the shares each
month from the date of grant, assuming continued employment.
|
|
(3)
|
|
Stock option vested one year from date of grant.
|
|
(4)
|
|
Stock option vests 25% on the first anniversary and then at the
rate of 1/48th of the shares each month from the first
anniversary of the grant date.
|
|
(5)
|
|
Stock option vests at the rate of 1/12th of the shares each
month from the date of grant.
|
|
(6)
|
|
Stock option vests upon expiration of the original term of
Dr. Rudnics consulting agreement with MiddleBrook
(September 4, 2010), or earlier upon a material breach of
the consulting agreement by us. For additional information
regarding Dr. Rudnics consulting agreement, see
Certain Relationships and Related
Transactions Rudnic Consulting Agreement.
|
|
(7)
|
|
Dr. Rudnic and Mr. Low were employed through
September 4, 2008, and were replaced by John Thievon and
David Becker. Pursuant to the consulting agreements with
Dr. Rudnic and Mr. Low all options granted prior to
the termination of their employment will continue to vest until
the expiration of their consulting agreements. For additional
information regarding these consulting agreements, see
Certain Relationships and Related
Transactions Rudnic Consulting Agreement,
and
Certain Relationships and Related
Transactions Low Consulting Agreement.
|
|
(8)
|
|
Mr. Bannon and Mr. Buchwalds employment with us
terminated on November 15, 2008 and September 8, 2008,
respectively.
|
46
Option
Exercises and Stock Vested Table
The following table shows the number of shares acquired upon
exercise of stock options by each named executive officer during
the year ended December 31, 2008. We have not issued shares
of restricted stock to the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
Stock Option Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized on
|
|
|
|
Acquired on Exercise
|
|
|
Exercise
|
|
Name
|
|
(#)
|
|
|
($)(1)
|
|
|
John Thievon
|
|
|
|
|
|
|
|
|
David Becker
|
|
|
|
|
|
|
|
|
Beth A. Burnside, Ph.D.
|
|
|
92,766
|
|
|
|
290,964
|
|
Susan P. Clausen, Ph.D.
|
|
|
67,321
|
|
|
|
197,851
|
|
Donald J. Treacy, Ph.D.
|
|
|
25,000
|
|
|
|
60,593
|
|
Edward M. Rudnic, Ph.D.
|
|
|
|
|
|
|
|
|
Robert C. Low, CPA
|
|
|
|
|
|
|
|
|
Robert W. Bannon, CFA
|
|
|
|
|
|
|
|
|
Darren W. Buchwald
|
|
|
56,200
|
|
|
|
166,791
|
|
|
|
|
(1)
|
|
Value realized represents market value of the stock on the date
of exercise less the exercise price paid.
|
Estimated
Payments and Benefits upon Termination or
Change-in-Control
The tables below indicate the estimated amount of compensation
payable by MiddleBrook to each current named executive officer
upon termination for-cause, termination due to death,
termination due to disability, voluntary termination,
involuntary without cause, and termination following a change in
control, assuming that such termination was effective as of
December 31, 2008. With respect to the terminated named
executive officers, we have included the actual amounts paid
during 2008, pursuant to their involuntary terminations without
cause under their employment agreements. The tables do not
include certain amounts that the named executive officer would
be entitled to receive under certain plans or arrangements that
do not discriminate in scope, terms or operation, in favor of
our executive officers and that are generally available to all
salaried employees, such as our 401(k) plan. It also does not
include values of awards that were vested normally as of
December 31, 2008, or the date of termination for those
named executive officers that were terminated in 2008.
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Related to
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Without
|
|
|
Change in
|
|
|
|
Termination(1)
|
|
|
Death
|
|
|
Disability
|
|
|
Termination
|
|
|
Cause(2)
|
|
|
Control(3)
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
John Thievon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,572
|
|
|
|
15,572
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,015,572
|
|
|
|
1,015,572
|
|
David Becker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
600,000
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,679
|
|
|
|
11,679
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
611,679
|
|
|
|
611,679
|
|
Beth A. Burnside, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270,400
|
|
|
|
270,400
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
271
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,386
|
|
|
|
8,386
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
278,786
|
|
|
|
279,057
|
|
Susan P. Clausen, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270,000
|
|
|
|
270,000
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
271
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,786
|
|
|
|
7,786
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
277,786
|
|
|
|
278,057
|
|
Donald J. Treacy, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270,400
|
|
|
|
270,400
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
271
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,786
|
|
|
|
7,786
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
278,186
|
|
|
|
278,457
|
|
Edward Rudnic, Ph.D.(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
843,053
|
|
|
|
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,444
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
848,497
|
|
|
|
|
|
Robert Low(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
256,499
|
|
|
|
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,762
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
260,261
|
|
|
|
|
|
Robert W. Bannon, CFA(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
213,872
|
|
|
|
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,806
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
215,678
|
|
|
|
|
|
Darren W. Buchwald(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
234,317
|
|
|
|
|
|
Options(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,434
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239,751
|
|
|
|
|
|
|
|
|
(1)
|
|
For Cause means (i) dishonesty, embezzlement,
theft or fraudulent misconduct; (ii) abuse of a controlled
substance that materially impairs the performance of the
employees duties to MiddleBrook; (iii) conduct
adverse to the business, interests, or reputation of
MiddleBrook; (iv) material breach of any of the terms of
the employment agreement or of any agreement between MiddleBrook
and employee (including, but not limited to, terms relating to
non-disclosure, non-competition and invention assignment) which,
if curable, remain uncured 30 days after the employee
receives written notice of such breach; or (v) commission
of a felony by employee.
|
|
(2)
|
|
For all named executive officers, except Messrs. Becker and
Thievon, the compensation payable would include:
(i) severance payments of one times base annual salary, and
(ii) Company paid premiums for group health plan
|
48
|
|
|
|
|
coverage for the benefit of named executive officers and their
spouses and dependents for one year following the date of
termination. Mr. Beckers compensation payable would
include: (i) severance payment of one and one-half times
his base annual salary, and (ii) Company paid premiums for
group health plan coverage for the benefit of Mr. Becker,
his spouse and dependents for one and one-half years following
the date of termination. Mr. Thievons compensation
payable would include: (i) severance payment of two times
his base salary, and (ii) Company paid premiums for group
health plan coverage for the benefit of Mr. Thievon, his
spouse and dependents for two years following the date of
termination.
|
|
(3)
|
|
Change-in-control
benefits are paid on a double trigger meaning that
benefits are paid only if the employment of the executive is
terminated by us or our successor without cause or by the
executive for good reason during a specified period before or
after the change in control.
|
|
(4)
|
|
Options are calculated using $1.50, the closing price of our
common stock on December 31, 2008, which was the last
trading day in calendar 2008.
|
|
(5)
|
|
Dr. Rudnics employment with the Company was
terminated effective September 4, 2008. Pursuant to a
two-year consulting agreement entered into with Dr. Rudnic,
effective September 5, 2008, Dr. Rudnic is paid $3,000
per day or $1,500 per
half-day,
plus reasonable travel expenses for consulting services, if and
when requested by the Company. During 2008, no fees were paid to
Dr. Rudnic pursuant to his consulting agreement.
|
|
(6)
|
|
Mr. Lows employment with the Company was terminated
effective September 4, 2008. Pursuant to a two-year
consulting agreement we entered into with Mr. Low,
effective September 5, 2008, Mr. Low is paid $1,500
per day or $750 per
half-day,
plus reasonable travel expenses for consulting services, if and
when requested by the Company. During 2008 no fees were paid to
Mr. Low pursuant to his consulting agreement.
|
|
(7)
|
|
Mr. Bannons employment with the Company was
terminated effective November 15, 2008.
|
|
(8)
|
|
Mr. Buchwalds employment with the Company was
terminated effective September 8, 2008.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
General
The board of directors has adopted written policies and
procedures for the review and approval of transactions involving
MiddleBrook and related parties, such as directors, executive
officers and their immediate family members. These policies are
included in our Code of Ethics and in the Audit Committees
Charter. All transactions involving MiddleBrook and related
parties are subject to approval or ratification in accordance
with the following procedures:
|
|
|
|
|
Management will be responsible for determining whether a
transaction is a transaction requiring review under this policy,
in which case the transaction shall be disclosed to the Audit
Committee.
|
|
|
|
The Audit Committee shall review the relevant facts and
circumstances, including, for example, whether the transaction
is on terms no less favorable than terms generally available to
an unaffiliated third party under the same or ordinary
circumstances and the related partys interest in the
transaction.
|
|
|
|
In the event MiddleBrook becomes aware of a related party
transaction that has not been approved, the Audit Committee
shall evaluate all options available to MiddleBrook, including
ratification, revision, or termination of such transaction and
take such course of action as the Audit Committee deems
appropriate under the circumstances.
|
|
|
|
No director shall participate in any discussion or approval of a
transaction for which he or she is a related party.
|
The Companys Board of Directors reviewed and approved the
following related party transactions in 2008 in accordance with
our policies:
49
Indemnification
Agreements
We have entered into indemnification agreements with each of our
directors and executive officers. These agreements, among other
things, require us to indemnify each director and executive
officer to the fullest extent permitted by Delaware law,
including indemnification of expenses such as attorneys
fees, judgments, fines and settlement amounts incurred by the
director or officer in any action or proceeding including any
action or proceeding by or in right of us, arising out of the
persons services as a director or officer.
Deerfield
Transaction
On November 7, 2007, we entered into a series of agreements
with Deerfield Management, or Deerfield, a healthcare investment
fund and one of our largest equity stockholders (at that time),
which provided for a potential capital raise of up to
$10.0 million in cash. As more fully described in
Note 13 to the Consolidated Financial Statements included
in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2007, we sold certain
assets, including product inventories, and assigned certain
intellectual property rights, relating to its existing,
non-PULSYS cephalexin business, to certain Deerfield affiliates,
including Kef Pharmaceuticals, Inc., or Kef, and Lex
Pharmaceuticals, Inc., or Lex (collectively, the Deerfield
Entities),in exchange for net cash proceeds of
$7 million, after deduction of certain transaction-related
expenses as well as the right to repurchase the assets and
rights sold and licensed by MiddleBrook to Deerfield. Deerfield
also granted us the right to repurchase all of the assets and
rights sold and licensed by us to Deerfield by purchasing all of
the outstanding capital stock of both Kef and Lex on or before
June 30, 2008. In accordance with the terms of the
agreement, upon payment of a $1.35 million extension fee,
the right to repurchase the assets was extended to
December 31, 2008.
Termination of Deerfield Agreements and Redemption of
Deerfield Warrants.
On September 4, 2008,
pursuant to an agreement, dated as of July 1, 2008, or the
Deerfield Agreement, by and among the MiddleBrook and Deerfield
and certain Deerfield affiliates, including the Deerfield
Entities, MiddleBrook repurchased, for approximately
$11.0 million in cash (the $1.35 million extension fee
was applied against the purchase price), its non-PULSYS Keflex
assets previously sold to those certain Deerfield entities in
November 2007 and terminated our ongoing royalty obligations to
those certain Deerfield entities.
In connection with the repurchase of the Keflex assets, the
agreements by and among MiddleBrook and the Deerfield Entities
were terminated. The agreements that we terminated with the
Deerfield Entities were: the Asset Purchase Agreement, dated
November 7, 2007, by and between MiddleBrook and Kef; the
Asset Purchase Agreement, dated November 7, 2007, by and
between MiddleBrook and Lex; the Stock Purchase Agreement, dated
November 7, 2007, among MiddleBrook, Kef, the Deerfield
Entities and Deerfield Management; the Stock Purchase Agreement,
dated November 7, 2007, among MiddleBrook, Lex, the
Deerfield Entities and Deerfield Management; the Inventory
Consignment Agreement, dated November 7, 2007, by and
between MiddleBrook and Kef; the Registration and Trademark
License Agreement, dated November 7, 2007, by and between
MiddleBrook and Lex; the Regulatory Responsibility Agreement,
dated November 7, 2007, by and between MiddleBrook and Lex;
the Keflex Products Transition Agreement, dated November 7,
2007, by and between MiddleBrook and Kef; the Contingent
Manufacturing Assignment, dated November 7, 2007, between
MiddleBrook and Lex; and the Registration Rights Agreement,
dated November 7, 2007.
In addition, each of the applicable Deerfield Entities exercised
its option to require us to redeem warrants to purchase
3,000,000 shares of our common stock, or the Deerfield
Warrants. We redeemed the Deerfield Warrants for an aggregate
redemption price of approximately $8.8 million on
September 4, 2008.
We funded the repurchase of the Keflex assets and the redemption
of the Deerfield Warrants from the $100 million raised in
the EGI Transaction.
Additional information regarding the repurchase of the Keflex
assets may be found in our current report on
Form 8-K
filed with the SEC on July 8, 2008. A description of the
transactions pursuant to which the Keflex assets were sold to
the Deerfield Entities in November 2007 is contained in the
Companys current report on
Form 8-K
filed with the SEC on November 13, 2007.
50
Consulting
Agreements
Blyth Consulting Agreement.
On
October 17, 2008, the board appointed Lord James Blyth to
the board and elected him its vice chairman. In connection with
his new appointment, we entered into a consulting agreement with
Lord Blyth. Pursuant to the consulting agreement, Lord Blyth
will provide strategic guidance in late-stage development and
commercialization of MiddleBrooks research and development
efforts. The term of the agreement is for 36 months from
the October 17, 2008. As compensation for his services
under the consulting agreement, Lord Blyth received an option
under the MiddleBrook Stock Incentive Plan to purchase
470,000 shares of MiddleBrooks common stock with an
exercise price of $1.34 per share, equal to the closing price of
MiddleBrooks common stock on the Nasdaq Global Market on
October 16, 2008. The option will have a term of three
years and will vest 100% one month prior to the expiration of
the consulting agreement. The board may accelerate the vesting,
or terminate the consulting agreement prior to the vesting of
the option, at any time in the boards sole discretion
based on a review of Lord Blyths contribution to
MiddleBrook. Lord Blyth will not be eligible to participate in
any benefit programs that MiddleBrook maintains for its
employees. MiddleBrook will not reimburse Lord Blyth for any
expenses except for reasonable travel expenses incurred in
connection with his performance of his consulting services,
unless otherwise agreed by MiddleBrook.
Rudnic Consulting Agreement.
On June 27,
2008, we entered into a consulting agreement with Edward M.
Rudnic, Ph.D., which became effective on September 5,
2008 and has a term of 24 months, subject to renewal for
additional
12-month
periods by mutual agreement of the parties. Under the consulting
agreement, Dr. Rudnic has agreed to be available on a
mutually agreeable schedule to provide such consulting services
with respect to our business as we reasonably request. The fees
for the services of Dr. Rudnic under the consulting
agreement shall be $3,000 per day or $1,500 per
half-day,
plus reasonable travel expenses. During 2008, we did not make
any payments to Dr. Rudnic pursuant to his consulting
agreement. We also granted to Dr. Rudnic, on
September 5, 2008, a stock option pursuant to the terms of
MiddleBrooks stock incentive plan to purchase
100,000 shares of our common stock with an exercise price
of $2.06, equal to the fair market value of our common stock on
the close of the market on September 4, 2008. This option
vests, in its entirety, upon expiration of the original term of
the consulting agreement or, if earlier, upon a material breach
of the consulting agreement by MiddleBrook. With respect to
other stock options held on September 5, 2008, or the Prior
Employment Options, by Dr. Rudnic, Dr. Rudnics
obligations to provide consulting services under the consulting
agreement shall constitute continued Service with
MiddleBrook (as described in MiddleBrooks stock incentive
plan and any applicable stock option agreement) so that
(i) such Prior Employment Options shall continue to vest
during the term of the consulting agreement (including any
additional terms following the original term), and (ii) the
exercisability of such Prior Employment Options shall be
determined as if such Service continued until the expiration of
the term of the consulting agreement (including any additional
terms following the original term).
Low Consulting Agreement.
On June 30,
2008, we entered into a consulting agreement with
Mr. Robert C. Low, which became effective on
September 5, 2008 and has a term of 24 months, subject
to renewal for additional
12-month
periods by mutual agreement of the parties. Under the consulting
agreement, Mr. Low has agreed to be available to provide
such consulting services with respect to our business as we
reasonably request. The fees for the services of Mr. Low
under the consulting agreement shall be $1,500 per day or $750
per
half-day,
plus reasonable travel expenses. During 2008, we did not make
any payments to Mr. Low pursuant to his consulting
agreement. We have agreed that with respect to Prior Employment
Options held by Mr. Low, Mr. Lows obligations to
provide consulting services under the consulting agreement shall
constitute continued Service with us (as described
in MiddleBrooks stock incentive plan and any applicable
stock option agreement) so that (i) such Prior Employment
Options shall continue to vest during the term of the Consulting
Agreement (including any additional terms following the original
term), and (ii) the exercisability of such Prior Employment
Options shall be determined as if such Service continued until
the expiration of the term of the consulting agreement
(including any additional terms following the original term).
51
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the
Companys executive officers and directors, and persons who
own more than ten percent of a registered class of the
Companys equity securities, file reports of ownership and
changes in ownership with the SEC and provide the Company with
copies of such reports. We have reviewed such reports received
by us and written representations from our directors and
executive officers. Based upon such review we believe that all
reports required during the year ended December 31, 2008,
were filed on a timely basis except for one report that included
one transaction for each of the following individuals James H.
Cavanaugh, Ph.D., R. Gordon Douglas, M.D., Richard W.
Dugan, Wayne T. Hockmeyer, Ph.D., Donald J.
Treacy, Ph.D., Martin A. Vogelbaum and Harold R. Werner.
2008
ANNUAL REPORT ON
FORM 10-K
On March 13, 2009, we filed with the SEC our Annual Report
on
Form 10-K
for the year ended December 31, 2008. Copies of our 2008
Annual Report on
Form 10-K
may be obtained without charge by writing to: MiddleBrook
Pharmaceuticals, Inc., 7 Village Circle, Suite 100,
Westlake, Texas 76262, Attention: Investor Relations; by
accessing the investor relations section of our website at
http://ir.middlebrookpharma.com;
or by accessing the SEC EDGAR database at www.sec.gov.
STOCKHOLDER
PROPOSALS
The proxy rules adopted by the Securities and Exchange
Commission provide that certain stockholder proposals must be
included in the proxy statement for our Annual Meeting. For a
proposal to be considered for inclusion in next years
proxy statement, it must be submitted in writing to the Company
no later than December 31, 2009, and otherwise in
accordance with the requirements of the SEC and our by-laws.
Pursuant to the Companys Amended and Restated By-Laws, any
stockholder proposal or director nomination for our 2010 annual
meeting that is submitted will be considered
untimely if we receive it before February 23,
2010, or after March 25, 2010 and thus, may be excluded
from consideration at our 2009 Annual Meeting.
OTHER
BUSINESS
The board of directors does not know of any matters, other than
those referred to in the accompanying notice for the meeting, to
be presented at the annual meeting for action by our
stockholders. However, if any matters are properly brought
before the meeting or any adjournments thereof, it is intended
that votes will be case with respect to such matters pursuant to
the proxies, in accordance with the best judgment of the proxy
holder.
By Order of the Board of Directors
Brad Cole
Secretary
Westlake, Texas
April 30, 2008
52
EIGHTH
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MIDDLEBROOK PHARMACEUTICALS, INC.
* * * * * *
MiddleBrook Pharmaceuticals, Inc., a corporation organized and
existing under the laws of the State of Delaware, hereby
certifies as follows:
1. The name of the Corporation is MiddleBrook
Pharmaceuticals, Inc. A Certificate of Incorporation of the
Corporation originally was filed by the Corporation with the
Secretary of the State of Delaware on December 16, 1999
under the name of Advanced Pharma, Inc. A Restated Certificate
of Incorporation of the Corporation was filed by the Corporation
with the Secretary of the State of Delaware on January 7,
2000. A Second Restated Certificate of Incorporation was filed
by the Corporation with the Secretary of the State of Delaware
on November 13, 2000. A Third Restated Certificate of
Incorporation was filed by the Corporation with the Secretary of
the State of Delaware on April 24, 2001. A Certificate of
Amendment to the Third Restated Certificate of Incorporation was
filed by the Corporation with the Secretary of the State of
Delaware on July 16, 2001. A Certificate of Amendment to
the Third Restated Certificate of Incorporation was filed by the
Corporation with the Secretary of the State of Delaware on
July 20, 2001. A Fourth Restated Certificate of
Incorporation was filed by the Corporation with the Secretary of
the State of Delaware on October 25, 2001. A Certificate of
Amendment to the Fourth Restated Certificate of Incorporation
was filed by the Corporation with the Secretary of the State of
Delaware on February 4, 2002. A Fifth Restated Certificate
of Incorporation was filed by the Corporation with the Secretary
of the State of Delaware on July 1, 2003. A Certificate of
Amendment to the Fifth Restated Certificate of Incorporation was
filed by the Corporation with the Secretary of the State of
Delaware on July 25, 2003. A Second Certificate of
Amendment to the Fifth Restated Certificate of Incorporation was
filed by the Corporation with the Secretary of the State of
Delaware on October 7, 2003. A Sixth Restated Certificate
of Incorporation was filed by the Corporation with the Secretary
of the State of Delaware on October 22, 2003. A Seventh
Restated Certificate of Incorporation was filed by the
Corporation with the Secretary of the State of Delaware on
June 28, 2007.
2. This Amended and Restated Certificate of Incorporation
restates and integrates and further amends the Certificate of
Incorporation of this corporation by amending ARTICLE VI,
Directors.
3. The text of the Certificate of Incorporation as amended
or supplemented heretofore is further amended hereby to read as
herein set forth in full:
ARTICLE I
Name
The name of the corporation is MiddleBrook Pharmaceuticals, Inc.
ARTICLE II
Purpose
The Corporation is organized to engage in any lawful act or
activity for which a corporation may be organized under the
General Corporation Law.
A-1-1
ARTICLE III
Capital
Stock
The total number of shares which the Corporation shall have
authority to issue is 250,000,000 consisting of
225,000,000 shares of Common Stock, par value $0.01 per
share (the
Common Stock
), and
25,000,000 shares of Preferred Stock, par value $0.01 per
share (the
Preferred Stock
).
The Board of Directors of the Corporation (the
Board
) is authorized, subject to any
limitations prescribed by law, to provide for the issuance of
shares of Preferred Stock in series, and to establish from time
to time the number of shares to be included in each such series,
and to fix the designation, powers, preferences, and rights of
the shares of each such series and any qualifications,
limitations or restrictions thereof.
Each outstanding share of Common Stock shall entitle the holder
thereof to one vote on each matter properly submitted to the
stockholders of the Corporation for their vote;
provided
,
however
, that, except as otherwise required by law,
holders of Common Stock shall not be entitled to vote on any
amendment to this Eighth Amended and Restated Certificate of
Incorporation (including any certificate of designation of
Preferred Stock relating to any series of Preferred Stock) that
relates solely to the terms of one or more outstanding series of
Preferred Stock if the holders of such affected series are
entitled, either separately or together as a class with the
holders of one or more other such series, to vote thereon by law
or pursuant to this Eighth Amended and Restated Certificate of
Incorporation (including any certificate of designation of
Preferred Stock relating to any series of Preferred Stock).
ARTICLE IV
Registered
Agent
The address of the registered office of the Corporation in the
State of Delaware is Corporation Service Company, 2711
Centerville Road, Wilmington, Delaware 19808. The name of the
registered agent of the Corporation at such address is
Corporation Service Company.
ARTICLE V
Management
of the Affairs of the Corporation
A. The business and affairs of the Corporation shall be
managed by or under the direction of the Board. In addition to
the powers and authority expressly conferred upon them by
statute or by this Eighth Amended and Restated Certificate of
Incorporation or the Bylaws of the Corporation, the directors
are hereby empowered to exercise all such powers and do all such
acts and things as may be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by
written ballot unless the Bylaws so provide.
C. Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly
called annual or special meeting of stockholders of the
Corporation and may not be effected by any consent in writing by
such stockholders.
D. Special meetings of stockholders of the Corporation may
be called only by the Chairman of the Board, the Chief Executive
Officer or by the Board acting pursuant to a resolution adopted
by a majority of the Whole Board, and any power of stockholders
to call a special meeting is specifically denied. Only such
business shall be considered at a special meeting of
stockholders as shall have been stated in the notice for such
meeting. For purposes of this Eighth Amended and Restated
Certificate of Incorporation, the term
Whole
Board
shall mean the total number of authorized
directors of the Corporation whether or not there exist any
vacancies in previously authorized directorships.
A-1-2
ARTICLE VI
Directors
A. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified
circumstances, the number of directors shall be fixed from time
to time exclusively by the Board pursuant to a resolution duly
adopted by a majority of the Board. Subject to the provisions of
Section C of this Article VI, the directors, other
than those who may be elected by the holders of any series of
Preferred Stock under specified circumstances, shall be
classified, with respect to the time for which they severally
hold office, into three classes, as nearly equal in number as
possible, one class to be originally elected for a term expiring
at the annual meeting of stockholders to be held in 2004,
another class to be originally elected for a term expiring at
the annual meeting of stockholders to be held in 2005, and
another class to be originally elected for a term expiring at
the annual meeting of stockholders to be held in 2006, with each
class to hold office until its successor is duly elected and
qualified. Subject to the provisions of Section C of this
Article VI, at each succeeding annual meeting of
stockholders, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at
the third succeeding annual meeting of stockholders after their
election.
B. Subject to the rights of the holders of any series of
Preferred Stock then outstanding and the provisions of
Section C of this Article VI, and unless the Board
otherwise determines, newly created directorships resulting from
any increase in the authorized number of directors or any
vacancies in the Board resulting from death, resignation,
retirement, disqualification, removal from office or other cause
shall, unless otherwise provided by law or by resolution of the
Board, be filled only by a majority vote of the directors then
in office, whether or not less than a quorum, and directors so
chosen shall hold office for a term expiring at the annual
meeting of stockholders at which the term of office of the class
to which they have been chosen expires. No reduction in the
authorized number of directors shall have the effect of removing
any director before such directors term of office expires.
C. Notwithstanding anything contained in Section A and
B of this Article VI to the contrary, beginning at the 2010
annual meeting of stockholders, directors shall be elected
annually for terms of one year, except that any director whose
term expires at the 2011 annual meeting of stockholders or the
2012 annual meeting of stockholders shall continue to hold
office until the end of the term for which such director was
elected or appointed and until such directors successor
shall have been elected and qualified, subject, however, to
prior death, resignation, retirement, disqualification or
removal from office. Accordingly, (i) at the 2010 annual
meeting of stockholders, the directors whose terms expire at
that meeting shall be elected to hold office for a one-year term
expiring at the 2011 annual meeting of stockholders;
(ii) at the 2011 annual meeting of stockholders, the
directors whose terms expire at that meeting shall be elected to
hold office for a one-year term expiring at the 2012 annual
meeting of stockholders; and (iii) at the 2012 annual
meeting of Stockholders, the directors whose terms expire at
that meeting shall be elected to hold office for a one-year term
expiring at the 2013 annual meeting of stockholders. Subject to
the rights of the holders of any series of Preferred Stock then
outstanding and unless the Board otherwise determines, newly
created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board
resulting from death, resignation, retirement, disqualification,
removal from office or other cause shall, unless otherwise
provided by law or by resolution of the Board, be filled only by
a majority vote of the directors then in office, whether or not
less than a quorum, and directors so chosen shall hold office
for a term expiring at the annual meeting of stockholders. No
reduction in the authorized number of directors shall have the
effect of removing any director before such directors term
of office expires.
D. Advance notice of stockholder nominations for the
election of directors and of business to be brought by
stockholders before any meeting of the stockholders of the
Corporation shall be given in the manner provided in the Bylaws
of the Corporation.
E. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, unless otherwise restricted by
statute, by the Eighth Amended and Restated Certificate of
Incorporation or the Bylaws of the Corporation, any director, or
all of the directors, may be removed from the Board, but only
for cause and only by the affirmative vote of the holders of at
least
66
2
/
3
%
of the voting power of all of the then outstanding shares of
capital stock of the Corporation then entitled to vote in the
election of directors, voting together as a single class.
A-1-3
ARTICLE VII
Bylaws
The Board is expressly empowered to adopt, amend or repeal any
of the Bylaws of the Corporation. Any adoption, amendment or
repeal of the Bylaws of the Corporation by the Board shall
require the approval of a majority of the Whole Board. The
stockholders shall also have power to adopt, amend or repeal the
Bylaws of the Corporation; provided, however, that, in addition
to any vote of the holders of any class or series of stock of
the Corporation required by law or by this Eighth Amended and
Restated Certificate of Incorporation, the affirmative vote of
the holders of at least
66
2
/
3
%
of the voting power of the then outstanding shares of voting
stock entitled to vote generally in the election of directors,
voting together as a single class, shall be required to adopt,
amend or repeal all or any portion of the following portions of
the Bylaws of the Corporation: Article II,
Section 3.2, Section 3.3, Section 3.4,
Section 3.14, Article VI or Article IX.
ARTICLE VIII
Limitation
of Liability
No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach
of his or her fiduciary duty as director;
provided
,
however
, that nothing contained in this Article VIII
shall eliminate or limit the liability of a director:
(a) for any breach of the directors duty of loyalty
to the Corporation or its stockholders;
(b) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law;
(c) under Section 174 of the General Corporation
Law; or
(d) for any transaction from which the director derived
improper personal benefit.
If the General Corporation Law or any other statute of the State
of Delaware hereafter is amended to authorize the further
elimination or limitation of the liability of directors of the
Corporation, then the liability of a director of the Corporation
shall be limited to the fullest extent permitted by the statutes
of the State of Delaware, as so amended, and such elimination or
limitation of liability shall be in addition to, and not in lieu
of, the limitation on the liability of a director provided by
the foregoing provisions of this Article VIII.
No amendment to or repeal of this Article VIII shall
eliminate or limit the liability of any director of the
Corporation for or with respect to any act or omission occurring
prior to the date when such amendment or repeal becomes
effective.
ARTICLE IX
Indemnification
The Corporation shall, to the maximum extent permitted from time
to time under the laws of the State of Delaware, indemnify and
upon request shall advance expenses to any person who is or was
a party or is threatened to be made a party to any threatened,
pending or completed action, suit, proceeding or claim, whether
civil, criminal, administrative or investigative, by reason of
the fact that he is or was or has agreed to be a director or
officer of the Corporation or while a director or officer is or
was serving at the request of the Corporation as a director,
officer, employer or agent of any corporation, partnership,
joint venture, trust or other enterprise, including service with
respect to employee benefit plans, against any and all expenses
(including attorneys fees and expenses), judgments, fines,
penalties and amounts paid in settlement or incurred in
connection with the investigation, preparation to defend or
defense of such action, suit, proceeding or claim. Such rights
arising under any bylaw, agreement, vote of directors or
stockholders or otherwise shall inure to the benefit of the
heirs and legal representatives of such person. Any repeal or
modification of the foregoing provisions of this Article IX
shall not adversely affect any right or protection of a director
or officer of this Corporation existing at the time of such
repeal or modification.
A-1-4
ARTICLE X
Amendments
and Repeal
The Corporation reserves the right to amend or repeal any
provision contained in this Eighth Amended and Restated
Certificate of Incorporation in the manner prescribed by the
laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation;
provided
,
however
, that, notwithstanding any other
provision of this Eighth Amended and Restated Certificate of
Incorporation, or any provision of law that might otherwise
permit a lesser vote or no vote, but in addition to any vote of
the holders of any class or series of the stock of this
Corporation required by law or by this Eighth Amended and
Restated Certificate of Incorporation, the affirmative vote of
the holders of at least
66
2
/
3
%
of the voting power of the then outstanding shares of voting
stock entitled to vote generally in the election of directors,
voting together as a single class, shall be required to amend or
repeal this Article X, Article V, Article VI,
Article VII, Article VIII or Article IX.
4. This Amended and Restated Certificate of Incorporation
was duly adopted by vote of the Stockholders and the Board of
Directors in accordance with Section 242 and 245 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, MiddleBrook Pharmaceuticals, Inc. has caused
this Eighth Amended and Restated Certificate of Incorporation to
be signed by John Thievon, its President and Chief Executive
Officer, this day of June, 2009.
John Thievon
President and Chief Executive Officer
A-1-5
AMENDED AND RESTATED BYLAWS
OF
MIDDLEBROOK PHARMACEUTICALS, INC.
(A Delaware
Corporation)
Adopted June , 2009
AMENDED
AND RESTATED BYLAWS
OF
MIDDLEBROOK PHARMACEUTICALS, INC.
(the
Corporation
)
ARTICLE I
CORPORATE
OFFICES
1.1 REGISTERED
OFFICE
The address of the registered office of the Corporation in the
State of Delaware is Corporation Service Company, 2711
Centerville, Suite 400, , Wilmington, Delaware 19808. The
name of its registered agent at such address is Corporation
Service Company.
1.2 OTHER
OFFICES
The Board of Directors of the Corporation (the
Board
) may at any time establish other
offices at any place or places where the Corporation is
qualified to do business.
ARTICLE II
MEETINGS OF
STOCKHOLDERS
2.1 PLACE
OF MEETINGS
Meetings of stockholders shall be held at any place, within or
outside the State of Delaware, as designated by the Board. In
the absence of any such designation, stockholders meetings
shall be held at the registered office of the Corporation.
2.2 ANNUAL
MEETING
The annual meeting of stockholders shall be held each year on a
date and at a time designated by the Board. At the annual
meeting, directors shall be elected and any other proper
business may be transacted.
2.3 SPECIAL
MEETING
Subject to the rights of the holders of any series of Preferred
Stock then outstanding, special meetings of the stockholders may
be called at any time only by the Board acting pursuant to a
resolution duly adopted by a majority of the Whole Board (as
defined below), the Chairman of the Board or the Chief Executive
Officer. Only such business shall be considered at a special
meeting of stockholders as shall have been stated in the notice
for such meeting. The term Whole Board shall mean
the total number of authorized directors of the Corporation
whether or not there exist any vacancies in previously
authorized directorships.
2.4 NOTICE
OF STOCKHOLDERS MEETINGS; EXCEPTION TO REQUIREMENTS OF
NOTICE
All notices of meetings with stockholders shall be in writing
and shall be sent or otherwise given in accordance with
Section 2.5 of these Bylaws not less than ten (10) nor
more than sixty (60) calendar days before the date of the
meeting to each stockholder entitled to vote at such meeting.
The notice shall specify the place, date and hour of the
meeting, the means of remote communications, if any, by which
stockholders and proxy holders may be deemed to be present in
person and vote at such meeting (as authorized by the Board in
its sole discretion pursuant to Section 211(a)(2) of the
Delaware General Corporation Law), and, in the case of a special
meeting, the purpose or purposes for which the meeting is
called. Any previously scheduled meeting of stockholders may be
postponed, and, unless the Eighth Amended and Restated
Certificate of Incorporation of the Corporation, as the same may
be amended
and/or
restated from time to time (as so amended and restated, the
Certificate
) provides otherwise, any
special meeting of the stockholders may be cancelled by
resolution duly adopted by a majority of the Board members then
in office upon public notice given prior to the date previously
scheduled for such meeting of stockholders.
A-2-1
Whenever notice is required to be given, under the Delaware
General Corporation Law, the Certificate or these Bylaws, to any
person with whom communication is unlawful, the giving of such
notice to such person shall not be required and there shall be
no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action
or meeting which shall be taken or held without notice to any
such person with whom communication is unlawful shall have the
same force and effect as if such notice had been duly given. In
the event that the action taken by the Corporation is such as to
require the filing of a certificate with the Secretary of State
of Delaware, the certificate shall state, if such is the fact
and if notice is required, that notice was given to all persons
entitled to receive notice except such persons with whom
communication is unlawful.
Whenever notice is required to be given, under any provision of
the Delaware General Corporation Law, the Certificate or these
Bylaws, to any stockholder to whom (a) notice of two
(2) consecutive annual meetings, or (b) all, and at
least two (2) payments (if sent by first-class mail) of
dividends or interest on securities during a twelve
(12) month period, have been mailed addressed to such
person at such persons address as shown on the records of
the Corporation and have been returned undeliverable, the giving
of such notice to such person shall not be required. Any actions
or meeting which shall be taken or held without notice to such
person shall have the same force and effect as if such notice
had been duly given. If any such person shall deliver to the
Corporation a written notice setting forth such persons
then current address, the requirement that notice be given to
such person shall be reinstated. In the event that the action
taken by the Corporation is such as to require the filing of a
certificate with the Secretary of State of Delaware, the
certificate need not state that the Corporation did not give
notice to persons not required to be given notice pursuant to
Section 230(b) of the Delaware General Corporation Law.
The exception in subsection (a) of the above paragraph to
the requirement that notice be given shall not be applicable to
any notice returned as undeliverable if the notice was given by
electronic transmission.
2.5 MANNER
OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders, if mailed, is
given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his, her or its address as it
appears on the records of the Corporation and otherwise is given
when delivered. An affidavit of the Secretary or an Assistant
Secretary, the transfer agent or other agent of the Corporation
that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.
2.6 QUORUM
The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business, except as
otherwise provided by statute or the Certificate. If, however,
such quorum is not present or represented at any meeting of the
stockholders, then a majority of the stockholders entitled to
vote thereat, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is
present or represented. At such adjourned meeting at which a
quorum is present or represented, any business may be transacted
that might have been transacted at the meeting as originally
noticed. The stockholders present at a duly called meeting at
which quorum is present may continue to transact business until
adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
2.7 ADJOURNED
MEETING; NOTICE
When a meeting is adjourned to another time or place, unless
these Bylaws otherwise require, notice need not be given of the
adjourned meeting if the time and place thereof, and the means
of remote communications, in any, by which stockholders and
proxy holders may be deemed to be present in person and vote at
such adjourned meeting (as authorized by the Board in its sole
discretion pursuant to Section 211(a)(2) of the Delaware
General Corporation Law), are announced at the meeting at which
the adjournment is taken. At the adjourned meeting, the
Corporation may transact any business that might have been
transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting. The Chairman of the
A-2-2
meeting shall have the power to adjourn any meeting of
stockholders for any reason and the stockholders shall have the
power to adjourn any meeting of stockholders in accordance with
Section 2.6 of these Bylaws.
2.8 VOTING
The stockholders entitled to vote at any meeting of stockholders
shall be determined in accordance with the provisions of
Section 2.11 of these Bylaws, subject to the provisions of
Sections 217 and 218 of the Delaware General Corporation
Law (relating to voting rights of fiduciaries, pledgors and
joint owners of stock and to voting trusts and other voting
agreements).
Except as otherwise provided in the provisions of
Section 213 of the Delaware General Corporation Law
(relating to the fixing of a date for determination of
stockholders of record), or as may be otherwise provided in the
Certificate, each stockholder shall be entitled to one
(1) vote for each share of capital stock held by such
stockholder.
In all matters, other than the election of directors and except
as otherwise required by law, the affirmative vote of the
majority of shares present or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the
act of the stockholders. Directors shall be elected by a
plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the
election of directors.
2.9 WAIVER
OF NOTICE
Whenever notice is required to be given under any provision of
the Delaware General Corporation Law, the Certificate or these
Bylaws, a written waiver thereof, signed by the person entitled
to notice, or a waiver by electronic transmission by the person
entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special
meeting of the stockholders need be specified in any written
waiver of notice, or any waiver by electronic transmission,
unless so required by the Certificate or these Bylaws.
2.10 NO
STOCKHOLDER ACTION BY WRITTEN CONSENT
Upon the Corporation becoming subject to the Securities Exchange
Act of 1934, as amended, and any successor thereto (the
Exchange Act
), any action required or
permitted to be taken by the stockholders of the Corporation
must be effected at a duly called annual or special meeting of
such holders and may not be effected by any consent in writing
by such holders.
2.11 RECORD
DATE FOR STOCKHOLDER NOTICE
In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of
any dividend or other distribution or allotment of any rights,
or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other
lawful action, the Board may fix, in advance, a record date,
which such date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board and
which such date shall not be more than sixty (60) nor less
than ten (10) calendar days before the date of such
meeting, nor more than sixty (60) days prior to any other
action.
If the Board does not so fix a record date:
(a) The record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at
the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting
is held.
(b) The record date for determining stockholders for any
other purpose shall be at the close of business on the day on
which the Board adopts the resolution relating thereto.
A-2-3
A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board
may fix a new record date for the adjourned meeting.
2.12 PROXIES
Each stockholder entitled to vote at a meeting of stockholders
may authorize another person or persons to act for him, her or
it by a written proxy, signed by the stockholder and filed with
the Secretary of the Corporation, but no such proxy shall be
voted or acted upon after three (3) years from its date,
unless the proxy provides for a longer period. A stockholder may
authorize another person or persons to act for him, her or it as
proxy in the manner(s) provided under Section 212(c) of the
General Corporate Law of Delaware or as otherwise provided under
Delaware law. The revocability of a proxy that states on its
face that it is irrevocable shall be governed by the provisions
of Section 212(e) of the Delaware General Corporation Law.
2.13 LIST
OF STOCKHOLDERS ENTITLED TO VOTE; STOCK LEDGER
The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten
(10) calendar days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address
of each stockholder and the number of shares registered in the
name of each stockholder. Nothing contained in this Section
shall require the Corporation to include electronic mail
addresses or other electronic contact information on such list.
Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting: (a) on a reasonably
accessible electronic network, provided that the information
required to gain access to such list is provided with the notice
of the meeting, or (b) for a period of at least ten
(10) calendar days prior to the meeting during ordinary
business hours at the principal place of business of the
Corporation.
In the event that the Corporation determines to make the list
available on an electronic network, the Corporation may take
reasonable steps to ensure that such information is available
only to the stockholders of the Corporation. The list shall be
produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder
who is present.
2.14 NOMINATIONS
AND PROPOSALS BY STOCKHOLDERS AT ANNUAL MEETING
Nominations of persons for election to the Board and the
proposal of business to be considered by the stockholders may be
made at an annual meeting of stockholders (a) pursuant to
the Corporations notice with respect to such meeting,
(b) by or at the direction of the Board, or (c) by any
stockholder of record of the Corporation who was a stockholder
of record at the time of the giving of the notice provided for
in these Bylaws, who is entitled to vote at the meeting and who
has complied with the notice procedures set forth in this
Section 2.14.
For nominations or other proposals of business to be properly
brought before an annual meeting by a stockholder pursuant to
clause (c) of the preceding paragraph, (i) the
stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation (as provided in the third
paragraph below), (ii) such business must be a proper
matter for stockholder action under the General Corporation Law
of the State of Delaware, (iii) if the stockholder, or the
beneficial owner on whose behalf any such proposal or nomination
is made, has (1) provided the Corporation with a
Solicitation Notice (as defined below), (2) such
stockholder or beneficial owner must, in the case of a proposal,
have delivered a proxy statement and form of proxy to holders of
at least the percentage of the Corporations voting shares
required under applicable law to carry any such proposal, or, in
the case of a nomination(s), have delivered a proxy statement
and form of proxy to holders of a percentage of the
Corporations voting shares reasonably believed by such
stockholder or beneficial holder to be sufficient to elect the
nominee(s) proposed to be nominated by such stockholder, and
must, in either case, have included in such materials the
Solicitation Notice, and (iv) if no Solicitation Notice
relating thereto has been timely provided pursuant to this
Section 2.14, the stockholder or beneficial owner proposing
such business or nomination must not have solicited a number of
proxies sufficient to have required the delivery of such a
Solicitation Notice under this Section.
To be timely, a stockholders notice shall be delivered to
the Secretary at the principal executive offices of the
Corporation (a) not later than the close of business on the
ninetieth
(90
th
)
calendar day, nor earlier than the close of
A-2-4
business on the one hundred and twentieth
(120
th
)
calendar day, prior to the first anniversary of the preceding
years annual meeting, or (b) not later than the close
of business on the forty-fifth
(45
th
)
calendar day, nor earlier than the close of business on the
seventy-fifth
(75
th
)
calendar day, prior to the first anniversary (the
Anniversary
) of the date on which the
Corporation first mailed its proxy materials for the preceding
years annual meeting, whichever period described in
clause (a) or (b) of this sentence occurs first;
provided, however, that if the date of the annual meeting is
advanced more than thirty (30) calendar days prior to, or
delayed by more than sixty (60) calendar days after, the
anniversary of the preceding years annual meeting, and in
respect of nominations to be brought before a special meeting,
where permitted, notice by the stockholder to be timely must be
so delivered not earlier than the close of business on the one
hundred and twentieth
(120
th
)
calendar day prior to such meeting and not later than the close
of business on the later of (i) the ninetieth
(90
th
)
calendar day prior to such annual meeting, and (ii) the
tenth
(10
th
)
calendar day following the day on which Public Announcement (as
defined below) of the date of such meeting is first made. Such
stockholders notice shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or
reelection as a director, all information relating to such
person as would be required to be disclosed in solicitations of
proxies for the election of such nominee(s) as directors
pursuant to Regulation 14A under the Exchange Act and such
nominees written consent to be named in the proxy
statement as a nominee and to serve as a director if elected, as
well as a written statement executed by such person
acknowledging that as a director of the Corporation, such person
will owe a fiduciary duty under the Delaware General Corporation
Law exclusively to the Corporation and its stockholders,
(b) as to any other business that the stockholder proposes
to bring before the meeting, a brief description of such
business, the reasons for conducting such business at the
meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf
the proposal is made, and (c) as to the stockholder giving
the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made (i) the name and address of
such stockholder, as they appear on the Corporations
books, and of such beneficial owner, (ii) the class and
number of shares of the Corporation that are owned beneficially
and of record by such stockholder and such beneficial owner, and
(iii) whether either such stockholder or beneficial owner
intends to deliver a proxy statement and form of proxy to
holders of, in the case of a proposal, at least the percentage
of the Corporations voting shares required under
applicable law to carry the proposal or, in the case of a
nomination(s), a sufficient number of holders of the
Corporations voting shares to elect such nominee(s) (an
affirmative statement of such intent, a
Solicitation
Notice
).
Notwithstanding anything in the first sentence of the third
paragraph of this Section 2.14 to the contrary, in the
event that the number of directors to be elected to the Board is
increased and there is no Public Announcement naming all of the
nominee(s) for director or specifying the size of the increased
Board made by the Corporation at least fifty-five
(55) calendar days prior to the Anniversary, a
stockholders notice required by this Bylaw shall also be
considered timely, but only with respect to nominee(s) for any
new positions created by such increase, if it shall be delivered
to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the tenth
(10
th
)
calendar day following the day on which such Public Announcement
is first made by the Corporation.
Only such persons nominated in accordance with the procedures
set forth in this Section 2.14 shall be eligible to serve
as directors and only such business shall be conducted at an
annual meeting of stockholders as shall have been brought before
the meeting in accordance with the procedures set forth in this
Section. The Chairman of the meeting shall have the power and
the duty to determine whether a nomination or any business
proposed to be brought before the meeting has been made in
accordance with the procedures set forth in these Bylaws and, if
any proposed nomination or business is not in compliance with
these Bylaws, to declare that such defective proposed business
or nomination shall not be presented for stockholder action at
the annual meeting and shall be disregarded.
Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting
pursuant to the Corporations notice of meeting.
Nominations of persons for election to the Board may be made at
a special meeting of stockholders at which directors are to be
elected pursuant to the Corporations notice (as provided
in Section 2.3 above) of meeting (a) by or at the
direction of the Board, or (b) by any stockholder of record
of the Corporation who is a stockholder of record at the time of
giving of notice provided for in this paragraph, who shall be
entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 2.14. Nominations by
stockholders of persons for election to the Board, where
permitted, may be made at such a special meeting of stockholders
if the stockholders notice required by the third paragraph
of this Section 2.14
A-2-5
shall be delivered to the Secretary at the principal executive
offices of the Corporation not earlier than the close of
business on the one hundred and twentieth
(120
th
)
calendar day prior to the special meeting and not later than the
close of business on the later of (a) the ninetieth
(90
th
)
calendar day prior to such special meeting, and (ii) the
tenth
(10
th
)
calendar day following the day on which Public Announcement is
first made of the date of the special meeting and of the
nominee(s) proposed by the Board to be elected at such meeting.
For purposes of this Section 2.14,
Public
Announcement
shall mean disclosure in a press
release reported by the Dow Jones News Service, Associated Press
or a comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange
Commission (the
Commission
) pursuant
to Section 13, 14 or 15(d) of the Exchange Act. In no event
shall the Public Announcement of an adjournment of stockholders
meeting commence a new time period for the giving of
stockholders notice as described above.
Notwithstanding the foregoing provisions of this
Section 2.14, a stockholder shall also comply with all
applicable requirements of the Exchange Act and the rules and
regulations thereunder with respect to matters set forth in this
Section 2.14. Nothing in this Section 2.14 shall be
deemed to affect any rights of stockholders to request inclusion
of proposals in the Corporations proxy statement pursuant
to
Rule 14a-8
under the Exchange Act.
2.15 ORGANIZATION
Meetings of stockholders shall be presided over by (a) the
Chief Executive Officer or, in the absence thereof,
(b) such person as the Chief Executive Officer shall
appoint or, in the absence thereof or in the event that the
Chief Executive Officer shall fail to make such appointment,
(c) such person as the Chairman of the executive committee
of the Corporation shall appoint or, in the absence thereof or
in the event that the Chairman of the executive committee of the
Corporation shall fail to make such appointment, any officer of
the Corporation elected by the Board. In the absence of the
Secretary of the Corporation, the secretary of the meeting shall
be such person as the Chairman of the meeting appoints.
The Board shall, in advance of any meeting of stockholders,
appoint one (1) or more inspector(s), who may include
individual(s) who serve the Corporation in other capacities,
including without limitation as officers, employees or agents,
to act at the meeting of stockholders and make a written report
thereof. The Board may designate one (1) or more persons as
alternate inspector(s) to replace any inspector, who fails to
act. If no inspector or alternate has been appointed or is able
to act at a meeting of stockholders, the Chairman of the meeting
shall appoint one (1) or more inspector(s) to act at the
meeting. Each inspector, before discharging his or her duties,
shall take and sign an oath to faithfully execute the duties of
inspector with strict impartiality and according to the best of
his or her ability. The inspector(s) or alternate(s) shall have
the duties prescribed pursuant to Section 231 of the
General Corporate Laws of Delaware or other applicable law.
The Board shall be entitled to make such rules or regulations
for the conduct of meetings of stockholders as it shall deem
necessary, appropriate or convenient. Subject to such rules and
regulations, if any, the Chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and
procedures and to do all acts as, in the judgment of such
Chairman, are necessary, appropriate or convenient for the
proper conduct of the meeting, including without limitation
establishing an agenda of business of the meeting, rules or
regulations to maintain order, restrictions on entry to the
meeting after the time fixed for commencement thereof and the
fixing of the date and time of the opening and closing of the
polls for each matter upon which the stockholders will vote at a
meeting (and shall announce such at the meeting).
2.16 NOTICE
BY ELECTRONIC TRANSMISSION
Without limiting the manner by which notice otherwise may be
given effectively to stockholders, any notice to stockholders
given by the Corporation under any provision of the Delaware
General Corporation Law, the Certificate or these Bylaws shall
be effective if given by a form of electronic transmission
previously consented to by the stockholder to whom the notice is
given. Any such consent shall be revocable by the stockholder by
written notice to the Corporation. Any such consent shall be
deemed revoked if (a) the Corporation is unable to deliver
by electronic transmission two (2) consecutive notices
given by the Corporation in accordance with such consent, and
(b) such inability becomes known to the Secretary or an
Assistant Secretary of the Corporation, the transfer agent or
A-2-6
other person responsible for the giving of notice; provided,
however, the inadvertent failure to treat such inability as a
revocation shall not invalidate any meeting or other action.
Notice given pursuant to the above paragraph shall be deemed
given (a) if by facsimile telecommunication, when directed
to a number at which the stockholder has consented to receive
notice, (b) if by electronic mail, when directed to an
electronic mail address at which the stockholder has consented
to receive notice, (c) if by a posting on an electronic
network together with a separate notice to the stockholder of
such specific posting, upon the later of (i) such posting,
and (ii) the giving of such separate notice, and
(d) if by any other form of electronic transmission, when
directed to the stockholder. An affidavit of the Secretary or
Assistant Secretary, the transfer agent or other agent of the
Corporation that the notice has been given by a form of
electronic transmission shall in the absence of fraud, be prima
facie evidence of the facts stated therein.
For purposes of these Bylaws, electronic
transmission means any form of communication, not directly
involving the physical transmission of paper, that creates a
record that may be retained, retrieved and reviewed by a
recipient thereof, and that may be directly reproduced in paper
form by such a recipient through an automated process. This
Section 2.16 shall not apply to Section 164 (failure
to pay for stock; remedies), Section 296 (adjudication of
claims; appeal), Section 311 (revocation of voluntary
dissolution), Section 312 (renewal, revival, extension and
restoration of certificate of incorporation) or Section 324
(attachment of shares of stock) of the Delaware General
Corporation Law.
ARTICLE III
DIRECTORS
3.1 POWERS
The business and affairs of the Corporation shall be managed by
or under the direction of the Board. In addition to the power
and authorities these Bylaws expressly confer upon them, the
Board may exercise all such powers of the Corporation and do all
such lawful acts and things as are not required by statute, the
Certificate or these Bylaws to be exercised or done by the
stockholders.
3.2 NUMBER
OF DIRECTORS; TERM OF OFFICE
Subject to the rights of the holders of any Preferred Stock of
the Corporation to elect additional directors under specified
circumstances, the authorized number of directors of the
Corporation shall be fixed from time to time exclusively by the
Board pursuant to a resolution duly adopted by a majority of the
Board members then in office.
No reduction of the authorized number of directors shall have
the effect of removing any director before such directors
term of office expires.
3.3 ELECTION
AND QUALIFICATION OF DIRECTORS
Directors shall have terms of office as provided in the
Certificate. .
Directors need not be stockholders unless so required by the
Certificate or these Bylaws, wherein other qualifications for
directors may be prescribed. Elections of directors at all
meetings of the stockholders at which directors are to be
elected shall be by ballot and, subject to the rights of the
holders of any Preferred Stock of the Corporation to elect
additional directors under specified circumstances, a plurality
of the votes cast thereat shall elect directors. The ballot
shall state the name of the stockholder or proxy voting or such
other information as may be required under the procedure
established by the Chairman of the meeting. If authorized by the
Board, such requirement of a ballot shall be satisfied by a
ballot submitted by electronic transmission provided that any
such electronic transmission must either set forth or be
submitted with information from which it can be determined that
the electronic submission was authorized.
3.4 RESIGNATION
AND VACANCIES
Any director may resign at any time upon written notice or by
electronic transmission to the Corporation.
A-2-7
Subject to the rights of the holders of any series of Preferred
Stock of the Corporation then outstanding and unless the Board
otherwise determines, newly created directorships resulting from
any increase in the authorized number of directors, or any
vacancies on the Board resulting from the death, resignation,
retirement, disqualification, removal from office or other
cause, shall be filled only by a majority vote of the directors
then in office, whether or not less than a quorum, and directors
so chosen shall hold office for a term expiring at the next
annual meeting of stockholders.
3.5 PLACE
OF MEETINGS; MEETINGS BY TELEPHONE
The Board may hold meetings, both regular and special, either
within or outside the State of Delaware.
Unless otherwise restricted by the Certificate or these Bylaws,
members of the Board, or any committee designated by the Board,
may participate in a meeting of the Board, or any committee, by
means of conference telephone or other communications equipment
by means of which all persons participating in the meeting can
hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
3.6 FIRST
MEETINGS
The first meeting of each Board, including newly elected
directors, shall be held immediately after, and at the same
location as, the annual meeting of stockholders, unless the
Board shall fix another time and place and give notice thereof
(or obtain waivers of notice thereof) in the manner required
herein for special meetings of directors, and no notice of such
meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting, except as provided in
this Section 3.6 and provided that a quorum shall be
present.
3.7 REGULAR
MEETINGS
Regular meetings of the Board may be held without notice at such
time and at such place as shall from time to time be determined
by the Board.
3.8 SPECIAL
MEETINGS; NOTICE
Special meetings of the Board for any purpose(s) may be called
at any time by the Chairman of the Board, the Chief Executive
Officer, the President or a majority of the members of the Board
then in office. The person(s) authorized to call special
meetings of the Board may fix the place and time of the meetings.
The Secretary shall give notice of any special meeting to each
director personally or by telephone, or sent by first-class
mail, overnight mail, courier service or telegram, postage or
charges prepaid, addressed to each director at that
directors address as it is shown on the records of the
Corporation. If the notice is mailed, it shall be deposited in
the United States mail at least four (4) calendar days
before the time of the holding of the meeting. If the notice is
delivered by telegram, overnight mail or courier, it shall be
deemed adequately delivered when the telegram is delivered to
the telegraph company or the notice is delivered to the
overnight mail or courier service company at least forty-eight
(48) hours before such meeting. If by facsimile
transmission, such notice shall be deemed adequately delivered
when the notice is transmitted at least twelve (12) hours
before such meeting. If by telephone or hand delivery the notice
shall be given at least twelve (12) hours prior to the time
set for the meeting. Any oral notice given personally or by
telephone may be communicated either to the director or to a
person at the office of the director who the person giving the
notice has reason to believe will promptly communicate it to the
director. The notice need not specify the purpose or the place
of the meeting, if the meeting is to be held at the principal
executive office of the Corporation.
3.9 QUORUM
At all meetings of the Board, a majority of the Whole Board
shall constitute a quorum for all purposes and the act of a
majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board, except as may be
otherwise specifically provided by statute or by the
Certificate. The directors present at a duly organized meeting
may continue to transact business until adjournment
notwithstanding the withdrawal of enough directors to leave less
than quorum.
A-2-8
3.10 WAIVER
OF NOTICE
Whenever notice is required to be given under any provisions of
the Delaware General Corporation Law of the Certificate or these
Bylaws, a written waiver thereof, signed by the person entitled
to notice, or a waiver by electronic transmission by the person
entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special
meeting of the directors, or members of a committee of
directors, need be specified in any written waiver of notice or
any waiver by electronic transmission unless so required by the
Certificate or these Bylaws.
3.11 ADJOURNED
MEETING; NOTICE
If a quorum is not present at any meeting of the Board, then a
majority of the directors present thereat may adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.
3.12 BOARD
ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the Certificate or these Bylaws,
any action required or permitted to be taken at any meeting of
the Board, or of any committee thereof, may be taken without a
meeting if all members of the Board or committee, as the case
may be, consent thereto in writing or by electronic transmission
and the writing(s) or electronic transmission(s) are filed with
the minutes of proceedings of the Board or committee. Such
filing shall be in paper form if the minutes are maintained in
paper form and shall be in electronic form if the minutes are
maintained in electronic form.
3.13 FEES
AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the Certificate or these Bylaws,
the Board shall have the authority to fix the compensation of
directors.
3.14 REMOVAL
OF DIRECTORS
Subject to the rights of the holders of any series of Preferred
Stock of the Corporation then outstanding, unless otherwise
restricted by statute, the Certificate or these Bylaws, any
director, or all of the directors, may be removed from the
Board, but only for cause and only by the affirmative vote of
the holders of at least sixty-six and two-thirds percent a
(66
2
/
3
%)
of the voting power of all the then outstanding shares of
capital stock of the Corporation then entitled to vote at the
election of directors, voting together as a single class. No
reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such
directors term of office.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES
OF DIRECTORS
The Board may from time to time, by resolution passed by a
majority of the Whole Board, designate one (1) or more
committees of the Board, with such lawfully delegable powers and
duties as it thereby confers, with each committee to consist of
one (1) or more of the directors of the Corporation. The
Board may designate one (1) or more directors as alternate
members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the
absence or disqualification of a member of a committee, the
member(s) thereof present at any meeting and not disqualified
from voting, whether or not such member(s) constitute a quorum,
may unanimously appoint another member of the Board to act at
the meeting in the place of any such absent or disqualified
member.
A-2-9
4.2 COMMITTEE
MINUTES
Each committee shall keep regular minutes of its meetings and
report the same to the Board when required.
4.3 MEETINGS
AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and
held and taken in accordance with, the provisions of
Article III of these Bylaws, Section 3.5 (place of
meetings and meetings by telephone), Section 3.7 (regular
meetings), Section 3.8 (special meetings and notice),
Section 3.9 (quorum), Section 3.10 (waiver of notice),
Section 3.11 (adjournment and notice of adjournment), and
Section 3.12 (action without a meeting), with such changes
in the context of those Bylaws as are necessary to substitute
the committee and its members for the Board and its members;
provided, however, that the time of regular and special meetings
of committees may also be called by resolution of the Board. The
Board may adopt rules for the government of any committee not
inconsistent with the provisions of these Bylaws.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the Corporation shall be a President and a
Secretary. The Corporation may also have, at the discretion of
the Board, a Chairman of the Board, a Vice Chairman of the
Board, a Chief Executive Officer, a Chief Financial Officer, a
Treasurer, one or more Vice Presidents, Assistant Vice
Presidents, Assistant Secretaries, and Assistant Treasurers, and
any such other officers as may be appointed in accordance with
the provisions of Section 5.3 of these Bylaws. Any number
of offices may be held by the same person.
5.2 ELECTION
OF OFFICERS
The officers of the Corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3
of these Bylaws, shall be chosen by the Board, which shall
consider such subject at its first meeting after every annual
meeting of stockholders, subject to the rights, if any, of an
officer under any contract of employment. Each officer shall
hold office until his or her successor is elected and qualified
or until his or her earlier resignation or removal. A failure to
elect officers shall not dissolve or otherwise affect the
Corporation.
5.3 SUBORDINATE
OFFICERS
The Board may appoint, or empower the Chief Executive Officer
or, in the absence of a Chief Executive Officer, the President,
to appoint, such other officers as the business of the
Corporation may require, each of whom shall hold office for such
period, have such authority, and perform such duties as are
provided in these Bylaws or as the Board may from time to time
determine.
5.4 REMOVAL
AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under contract of
employment, any officer may be removed, either with or without
cause, by an affirmative vote of the majority of the Board at
any regular or special meeting of the Board.
Any officer may resign at any time by giving written notice to
the Corporation. Any resignation shall take effect at the date
of the receipt of that notice or at any later time specified in
that notice. Unless otherwise specified in such notice, the
acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights,
if any, of the Corporation under any contract to which the
officer is a party.
5.5 VACANCIES
IN OFFICES
Any vacancy occurring in any office of the Corporation shall be
filled by the Board.
A-2-10
5.6 CHAIRMAN
OF THE BOARD
The Chairman of the Board, if such an officer be elected, shall,
if present, preside at meetings of the Board and exercise and
perform such other powers and duties as may from time to time be
assigned to him or her by the Board or as may be prescribed by
these Bylaws. If there is no Chief Executive Officer or
President, then the Chairman of the Board shall also be the
Chief Executive Officer of the Corporation and as such shall
also have the powers and duties prescribed in Section 5.7
of these Bylaws.
5.7 CHIEF
EXECUTIVE OFFICER
Subject to such supervisory powers, if any, as the Board may
give to the Chairman of the Board, the Chief Executive Officer,
if any, shall, subject to the control of the Board, have general
supervision, direction, and control of the business and affairs
of the Corporation and shall report directly to the Board. All
other officers, officials, employees and agents shall report
directly or indirectly to the Chief Executive Officer. The Chief
Executive Officer shall see that all orders and resolutions of
the Board are carried into effect. The Chief Executive Officer,
or his designee, shall serve as chairperson of and preside at
all meetings of the stockholders. In the absence of a Chairman
of the Board, the Chief Executive Officer shall preside at all
meetings of the Board.
5.8 PRESIDENT
In the absence or disability of the Chief Executive Officer, the
President shall perform all the duties of the Chief Executive
Officer. When acting as the Chief Executive Officer, the
President shall have all the powers of, and be subject to all
the restrictions upon, the Chief Executive Officer. The
President shall have such other powers and perform such other
duties as from time to time may be prescribed for him by the
Board, these bylaws, the Chief Executive Officer or the Chairman
of the Board.
5.9 VICE
PRESIDENT
In the absence or disability of the President, the Vice
President(s), if any, in order of their rank as fixed by the
Board or, if not ranked, a Vice President designated by the
Board, shall perform all the duties of the President and, when
so acting, shall have all the powers of, and be subject to all
the restrictions upon, the President. The Vice President(s)
shall have such other powers and perform such other duties as
from time to time may be prescribed for them respectively by the
Board, these Bylaws, the Chairman of the Board, the Chief
Executive Officer or, in the absence of a Chief Executive
Officer, the President.
5.10 SECRETARY
The Secretary shall keep or cause to be kept, at the principal
executive office of the Corporation or such other place as the
Board may direct, a book of minutes of all meetings and actions
of directors, committees of directors, and stockholders. The
minutes shall show the time and place of each meeting, whether
regular or special (and, if special, how authorized and the
notice given), the names of those present at directors
meetings or committee meetings, the number of shares present or
represented at stockholders meetings, and the proceedings
thereof.
The Secretary shall keep, or cause to be kept, at the principal
executive office of the Corporation or at the office of the
Corporations transfer agent or registrar, as determined by
resolution of the Board, a share register, or a duplicate share
register, showing the names of all stockholders and their
addresses, the number and classes of shares held by each, the
number and date of certificates evidencing such shares, and the
number and date of cancellation of every certificate surrendered
for cancellation. Such share register shall be the stock
ledger for purposes of Section 2.13 of these Bylaws.
The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and of the Board, or committee of
the Board, required to be given by law or by these Bylaws. He or
she shall keep the seal of the Corporation, if one be adopted,
in safe custody and shall have such other powers and perform
such other duties as may be prescribed by the Board or by these
Bylaws.
A-2-11
5.11 CHIEF
FINANCIAL OFFICER
The Chief Financial Officer shall keep and maintain, or cause to
be kept and maintained, adequate and correct books and records
of accounts of the properties and business transactions of the
Corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital and retained
earnings.
The Chief Financial Officer shall deposit all money and other
valuables in the name and to the credit of the Corporation with
such depositaries as may be designated by the Board or Chief
Executive Officer. The Chief Financial Officer shall disburse
the funds of the Corporation as may be ordered by the Board,
shall render to the Board and Chief Executive Officer, or in the
absence of a Chief Executive Officer the President, whenever
they request, an account of all of his or her transactions as
Chief Financial Officer and of the financial condition of the
Corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board or these Bylaws.
In lieu of any contrary resolution duly adopted by the Board,
the Chief Financial Officer shall be the Treasurer of the
Corporation.
5.12 ASSISTANT
SECRETARY
The Assistant Secretary(ies), if any, in the order determined by
the Board (or if there be no such determination, then in the
order of their election) shall, in the absence of the Secretary
or in the event of his or her inability or refusal to act,
perform the duties and exercise the powers of the Secretary and
shall perform such other duties and have such other powers as
the Board may from time to time prescribe.
5.13 ASSISTANT
TREASURER
The Assistant Treasurer(s), if any, in the order determined by
the Board (or if there be no such determination, then in the
order of their election), shall, in the absence of the Chief
Financial Officer or in the event of his or her inability or
refusal to act, perform the duties and exercise the powers of
the Chief Financial Officer and shall perform such other duties
and have such other powers as the Board may from time to time
prescribe.
5.14 AUTHORITY
AND DUTIES OF OFFICERS
In addition to the foregoing authority and duties, all officers
of the Corporation shall respectively have such authority and
perform such duties in the management of the business of the
Corporation as may be designated from time to time by the Board.
ARTICLE VI
INDEMNITY
6.1 RIGHT
TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (collectively, a
Proceeding
), by reason of the fact
that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the
Corporation (or any predecessor), or is or was serving at the
request of the Corporation (or any predecessor) as a director,
officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise (or any
predecessor of such entities), including service with respect to
an employee benefit plan maintained or sponsored by the
Corporation (or any predecessor) (collectively, an
Indemnitee
), whether the basis of such
Proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall
be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation
Law as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation
to provide prior to such amendment), against all expense,
liability and loss (including attorneys fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such Indemnitee
in connection therewith and such indemnification shall continue
as to an Indemnitee who has ceased to be a director, officer,
A-2-12
employee or agent and shall inure to the benefit of the
Indemnitees heirs, executors and administrators; provided,
however, that, except as provided in Section 6.3 below with
respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such Indemnitee seeking
indemnification in connection with a Proceeding (or part
thereof) initiated by such Indemnitee only if such Proceeding
(or part thereof) was authorized by the Board.
6.2 RIGHT
TO ADVANCEMENT OF EXPENSES
In addition to the right to indemnification conferred in
Section 6.1, an Indemnitee shall also have the right to be
paid by the Corporation the expenses incurred in defending
against any such Proceeding in advance of its final disposition
(an
Advancement of Expenses
), such
Advancement to be paid by the Corporation within twenty
(20) calendar days after the receipt by the Corporation of
a statement(s) from the Indemnitee requesting such Advancement
of Expenses from time to time; provided, however, that if the
Delaware General Corporation Law requires, the payment of an
Advancement of Expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person
while a director or officer, including without limitation
service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking (an
Undertaking
), by or on behalf of such
director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such director or officer is
not entitled to be indemnified for such Expenses under this
Section 6.2 or otherwise. The rights to indemnification and
to the Advancement of Expenses conferred in Sections 6.1
and 6.2 shall be contract rights.
6.3 RIGHT
OF INDEMNITEE TO BRING SUIT
To obtain indemnification or Advancement of Expenses under this
Article VI, an Indemnitee shall submit to the Corporation a
written request, including such documentation and information as
is reasonably available to the Indemnitee and is reasonably
necessary to determine whether and to what extent the Indemnitee
is entitled to indemnification or Advancement of Expenses. Upon
such written request, a determination, if required by applicable
law, with respect to the Indemnitees entitlement thereto
shall be made as follows: (a) if requested by the
Indemnitee, by Independent Counsel (as defined below); or
(b) if no request is made by the Indemnitee for a
determination by Independent Counsel, (i) by the Board by a
majority vote of a quorum consisting of Disinterested Directors
(as defined below), or (ii) if a quorum of the Board
consisting of Disinterested Directors is not obtainable or, even
if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to the Indemnitee; or
(c) if a quorum of Disinterested Directors so directs, by
the stockholders of the Corporation. In the event the
determination of entitlement to indemnification or Advancement
of Expenses is to be made by Independent Counsel at the request
of the Indemnitee, the Independent Counsel shall be selected by
the Board, unless there shall have occurred within two
(2) years prior to the date of the commencement of the
action, suit or proceeding for which indemnification or
Advancement of Expenses is claimed a Change of Control (as
defined below), in which case the Independent Counsel shall be
selected by the Indemnitee unless the Indemnitee shall request
that such selection be made by the Board. If it is so determined
that the Indemnitee is entitled to indemnification or
Advancement of Expenses, payment to the Indemnitee shall be made
within ten (10) calendar days after such determination.
If a claim under Section 6.1 or 6.2 is not paid in full by
the Corporation within thirty (30) calendar days after a
written claim has been received by the Corporation as set forth
above, except in the case of a claim for an Advancement of
Expenses, in which case the applicable period shall be twenty
(20) calendar days, the Indemnitee may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the Indemnitee shall be entitled to be paid also the
expense of prosecuting such claim. In (a) any suit brought
by the Indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the Indemnitee to
enforce a right to an Advancement of Expenses where the required
Undertaking, if any is required, has been tendered to the
Corporation) it shall be a defense that, and (b) in any
suit brought by the Corporation to recover an Advancement of
Expenses pursuant to the terms of an Undertaking, the
Corporation shall be entitled to recover such Expenses upon a
determination that, the Indemnitee has not met any applicable
standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the Corporation
(including its Board, a committee of the Board, Independent
Counsel or its stockholders) to have made a
A-2-13
determination prior to the commencement of such suit that
indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of
conduct set forth in the General Corporate Law of Delaware, nor
an actual determination by the Corporation (including its Board,
a committee of the Board, Independent Counsel or its
stockholders) that the Indemnitee has not met such applicable
standard of conduct, shall create a presumption that the
Indemnitee has not met the applicable standard of conduct or, in
the case of such suit brought by the Indemnitee, be a defense to
such suit. In any suit brought by the Indemnitee to enforce a
right to indemnification or to an Advancement of Expenses
hereunder, or brought by the Corporation to recover and
Advancement of Expenses pursuant to the terms of an Undertaking,
the burden of proving that the Indemnitee is not entitled to be
indemnified, or to such Advancement of Expenses, shall be on the
Corporation.
6.4 NON-EXCLUSIVITY
OF RIGHTS
If a determination shall have been made pursuant to this
Article VI that the Indemnitee is entitled to
indemnification or Advancement of Expenses, the Corporation
shall be bound by such determination in any judicial proceeding
commenced pursuant to Section 6.3 above. The Corporation
shall be precluded from asserting in any judicial proceeding
commenced pursuant to Section 6.3 above that the procedures
and presumptions of these Bylaws are not valid, binding and
enforceable and shall stipulate in such proceeding that the
Corporation is bound by all the provisions of this
Article VI.
The rights to indemnification and to the Advancement of Expenses
conferred in this Article VI shall not be exclusive of any
other right which any person may have or hereafter acquire under
any statute, the Certificate, these Bylaws, agreement, vote of
stockholders or Disinterested Directors or otherwise. No repeal
or modification of this Article VI shall in any way
diminish or adversely affect the rights of any director,
officer, employee or agent of the Corporation hereunder in
respect of any occurrence or matter arising prior to any such
repeal or modification.
If any provision(s) of Article VI of these Bylaws shall be
held to be invalid, illegal or unenforceable for any reasons
whatsoever: (a) the validity, legality and enforceability
of the remaining provisions of such Article shall not in any way
be affected or impaired thereby; and (b) to the fullest
extent possible, the provisions of this Article VI shall be
construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
6.5 INSURANCE
The Corporation may maintain insurance to protect itself and any
director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other
enterprise, against any expense, liability or loss, whether or
not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the
Delaware General Corporation Law.
6.6 INDEMNIFICATION
OF EMPLOYEES AND AGENTS OF THE CORPORATION
The Corporation may, to the extent authorized from time to time
by the Board, grant rights to indemnification and to the
Advancement of Expenses to any employee or agent of the
Corporation to the fullest extent of the provisions of this
Article VI with respect to the indemnification and
Advancement of Expenses of directors and officers of the
Corporation.
6.7 DEFINITIONS
For the purposes of this Article VI:
(a)
Change of Control
means:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a
Person
) of beneficial
ownership (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or
more of either (A) the then outstanding shares of common
stock of the Corporation (the
Outstanding
Corporation Common Stock
), or (B) the
combined voting power of the then outstanding voting securities
of the Corporation entitled to vote generally in the election of
directors (the
Outstanding Corporation Voting
Securities
); provided, however, that for purposes
of this subsection (i), the following acquisitions shall not
constitute a Change
A-2-14
of Control: (I) any acquisition directly from the
Corporation or any acquisition from other stockholders where
(aa) such acquisition was approved in advance by the Board, and
(bb) such acquisition would not constitute a change of control
under subsection (iii) of this definition; (II) any
acquisition by the Corporation; (III) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained
by the Corporation or any corporation controlled by the
Corporation; or (IV) any acquisition by any corporation
pursuant to a transaction which complies with subsections (A),
(B) or (C) of subsection (iii) of this
definition; or
(ii) Individuals who, as of the date hereof, constitute the
Board (the
Incumbent Board
) cease for
any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the stockholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies by or on behalf of a Person other than
the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation (a
Business Combination
), in each case,
unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such Business Combination (including without limitation a
corporation which as a result of such transaction owns the
Corporation or all or substantially all of the
Corporations assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the
Outstanding Corporation Common Stock and Outstanding Corporation
Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of
the Corporation or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action
of the board of directors, providing for such Business
Combination; or
(iv) Approval by the stockholders of a complete liquidation
or dissolution of the Corporation.
(b)
Disinterested Director
means a
director of the Corporation who is not and was not a party to
the matter in respect of which indemnification or Advancement of
Expenses is sought by the Indemnitee.
(c)
Independent Counsel
means a law
firm, a member of a law firm or an independent practitioner that
is experienced in matters of corporation law and shall include
any person who, under the applicable standards of professional
conduct then prevailing, would not have a conflict of interest
in representing either the Corporation or the Indemnitee in an
action to determine the Indemnitees rights under this
Article VI.
Any notice, request or other communication required or permitted
to be given to the Corporation under this Article VI shall
be in writing and either delivered in person or sent by
telecopy, telex, telegram, overnight mail or courier service, or
certified or registered mail, postage prepaid, return receipt
requested, to the Secretary of the Corporation and shall be
effective only upon receipt by the Secretary.
A-2-15
ARTICLE VII
RECORDS AND
REPORTS
7.1 MAINTENANCE
AND INSPECTION OF RECORDS
The Corporation shall, either at its principal executive office
or at such place or places as designated by the Board, keep a
record of its stockholders listing their names and addresses and
the number and class of shares held by each stockholder, a copy
of these Bylaws, as may be amended to date, minute books,
accounting books and other records.
Any such records maintained by the Corporation may be kept on,
or by means of, or be in the form of, any information storage
device or method, provided that the records so kept can be
converted into clearly legible paper form within a reasonable
time. The Corporation shall so convert any records so kept upon
the request of any person entitled to inspect such records
pursuant to the provisions of the Delaware General Corporation
Law. When records are kept in such manner, a clearly legible
paper form produced from or by means of the information storage
device or method shall be admissible in evidence, and accepted
for all other purposes, to the same extent as an original paper
form accurately portrays the record.
Any stockholder of record, in person or by attorney or other
agent, shall, upon written demand under oath stating the purpose
thereof, have the right during the usual hours for business to
inspect for any proper purpose the Corporations stock
ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper
purpose shall mean a purpose reasonably related to such
persons interest as a stockholder. In every instance where
an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a
power of attorney or such other writing that authorizes the
attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the Corporation at
its registered office in Delaware or at its principal place of
business.
7.2 INSPECTION
BY DIRECTORS
Any director shall have the right to examine the
Corporations stock ledger, a list of its stockholders, and
its other books and records for a purpose reasonably related to
his or her position as a director. The Court of Chancery is
hereby vested with the exclusive jurisdiction to determine
whether a director is entitled to the inspection sought. The
Court may summarily order the Corporation to permit the director
to inspect any and all books and records, the stock ledger, and
the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or
conditions with reference to the inspection, or award such other
and further relief as the Court may deem just and proper.
7.3 REPRESENTATION
OF SHARES OF OTHER CORPORATIONS
Unless otherwise directed by the Board, the President, or any
other person authorized by the President, is authorized to vote,
represent, and exercise on behalf of the Corporation all rights
incident to any and all shares of any other corporation(s)
standing in the name of the Corporation. The authority granted
herein may be exercised either by such person directly or by any
other person authorized to do so by proxy or power of attorney
duly executed by such person having the authority.
ARTICLE VIII
GENERAL
MATTERS
8.1 CHECKS
From time to time, the Board shall determine by resolution which
person or persons may sign or endorse all checks, drafts, other
orders for payment of money, notes or other evidences of
indebtedness that are issued in the name of or payable to the
Corporation, and only the persons so authorized shall sign or
endorse those instruments.
A-2-16
8.2 EXECUTION
OF CORPORATE CONTRACTS AND INSTRUMENTS
The Board, except as otherwise provided in these Bylaws, may
authorize any officer or officers, or agent or agents, to enter
into any contract or execute any instrument in the name of and
on behalf of the Corporation. Such authority may be general or
confined to specific instances. Unless so authorized or ratified
by the Board or within the agency power of an officer, no
officer, agent or employee shall have any power or authority to
bind the Corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any
amount.
8.3 STOCK
CERTIFICATES; PARTLY PAID SHARES
The shares of the Corporation shall be represented by
certificates, provided that the Board may provide by resolution
that some or all of any or all classes or series of its stock
shall be uncertificated shares. Any such resolution shall not
apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding
the adoption of such a resolution by the Board, every holder of
stock represented by certificates and upon request every holder
of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the Corporation by the Chairman of
the Board, or the President or Vice-President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation representing the number
of shares registered in certificate form. Any or all of the
signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate has
ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation
with the same effect as if he were such officer, transfer agent
or registrar at the date of issue.
The Corporation may issue the whole or any part of its shares as
partly paid and subject to call for the remainder of the
consideration to be paid therefor. Upon the face or back of each
stock certificate issued to represent any such partly paid
shares, upon the books and records of the Corporation in the
case of uncertificated partly paid shares, the total amount of
the consideration to be paid therefor and the amount paid
thereon shall be stated. Upon the declaration of any dividend on
fully paid shares, the Corporation shall declare a dividend upon
partly paid shares of the same class, but only upon the basis of
the percentage of the consideration actually paid thereon.
8.4 SPECIAL
DESIGNATION ON CERTIFICATES
If the Corporation is authorized to issue more than one
(1) class of stock or more than one (1) series of any
class, then the powers, the designations, the preferences, and
the relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences
and/or
rights shall be set forth in full or summarized on the face or
back of the certificate that the Corporation shall issue to
represent such class or series of stock; provided, however,
that, except as otherwise provided in Section 202 of the
Delaware General Corporation Law, in lieu of the foregoing
requirements, there may be set forth on the face or back of the
certificate that the Corporation shall issue to represent such
class or series of stock a statement that the Corporation will
furnish without charge to each stockholder who so requests the
powers, the designations, the preferences, and the relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences
and/or
rights.
8.5 LOST
CERTIFICATES
Except as provided in this Section 8.5, no new certificates
for shares shall be issued to replace a previously issued
certificate unless the latter is surrendered to the Corporation
and cancelled at the same time. The Corporation may issue a new
certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been
lost, stolen or destroyed, and the Corporation may require, or
may require any transfer agent, if any, for the shares to
require, the owner of the lost, stolen or destroyed certificate,
or his, her or its legal representative, to give the Corporation
a bond sufficient to indemnify it against any claim that may be
made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of such new
certificate or uncertificated shares.
8.6 CONSTRUCTION;
DEFINITIONS
Unless the context requires otherwise, the general provisions,
rules of construction and definitions in the Delaware General
Corporation Law shall govern the construction of these Bylaws.
Without limiting the generality
A-2-17
of this provision, the singular number includes the plural, the
plural number includes the singular, and the term
person includes both a corporation and a natural
person.
8.7 DIVIDENDS
The directors of the Corporation, subject to any restrictions
contained in the Certificate, may declare and pay dividends upon
the shares of its capital stock pursuant to the Delaware General
Corporation Law. Dividends may be paid in cash, in property or
in shares of the Corporations capital stock.
The directors of the Corporation may set apart out of any of the
funds of the Corporation available for dividends a reserve or
reserves for any proper purpose and may abolish any such
reserve. Such purposes shall include but not be limited to
equalizing dividends, repairing or maintaining any property of
the Corporation, and meeting contingencies.
8.8 FISCAL
YEAR
The fiscal year of the Corporation shall be fixed by resolution
of the Board and may be changed by resolution of the Board.
8.9 SEAL
The Corporation may have a corporate seal, which may be adopted
or altered at the pleasure of the Board, and may use the same by
causing it or a facsimile thereof, to be impressed or affixed or
in any other manner reproduced.
8.10 TRANSFER
OF STOCK
Upon surrender to the Corporation or the transfer agent of the
Corporation, if any, of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignation or
authority to transfer (as determined by legal counsel to the
Corporation), it shall be the duty of the Corporation, as the
Corporation may so instruct its transfer agent, if any, to issue
a new certificate to the person entitled thereto, cancel the old
certificate, and record the transaction in its books.
8.11 REGISTERED
STOCKHOLDERS
The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares
to receive dividends and to vote as such owner, shall be
entitled to hold liable for calls and assessments the person
registered on its books as the owner of shares, and shall not be
bound to recognize any equitable or other claim to or interest
in such share or shares on the part of another person, whether
or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
ARTICLE IX
AMENDMENTS
The Bylaws of the Corporation may be adopted, amended or
repealed by the stockholders entitled to vote; provided,
however, that the Corporation may, in its Certificate, confer
the power to adopt, amend or repeal bylaws upon the Board. The
fact that such power has been so conferred upon the Board shall
not divest the stockholders of the power, nor limit their power
to adopt, amend or repeal bylaws. Notwithstanding the foregoing,
in addition to any vote of the holders of any class or series of
stock of the Corporation required by law or by the Certificate,
the amendment or repeal of all or any portion of
Article II, Section 3.2 (number of directors),
Section 3.3 (election, qualification and term of office of
directors), Section 3.4 (resignation and vacancies),
Section 3.14 (removal of directors), Article VI or
this Article IX by the stockholders of the Corporation
shall require the affirmative vote of the holders of at least
sixty-six and two-thirds percent
(66
2
/
3
%)
of the voting power of the then outstanding shares of voting
stock entitled to vote generally in the election of directors,
voting together as a single class.
* * * * *
A-2-18
AMENDED
AND RESTATED
MIDDLEBROOK PHARMACEUTICALS, INC.
STOCK INCENTIVE PLAN
|
|
1.
|
Establishment,
Purpose and Types of Awards
|
MIDDLEBROOK PHARMACEUTICALS, INC., a Delaware corporation (the
Company
), hereby establishes the MIDDLEBROOK
PHARMACEUTICALS, INC. STOCK INCENTIVE PLAN (the
Plan
). The purpose of the Plan is to promote
the long-term growth and profitability of the Company by
(i) providing key people with incentives to improve
stockholder value and to contribute to the growth and financial
success of the Company, and (ii) enabling the Company to
attract, retain and reward the best-available persons. This Plan
is a continuation, and amendment and restatement, of the
Companys Amended and Restated Advancis Pharmaceutical
Corporation Stock Incentive Plan, the provisions of which shall
continue to control with respect to any options or stock awards
outstanding thereunder to the extent necessary to avoid
establishment of a new measurement date for financial accounting
purposes and to preserve the status of any options that are
intended to qualify as incentive stock options
within the meaning of Section 422 of the Internal Revenue
Code.
The Plan permits the granting of stock options (including
incentive stock options qualifying under Code section 422
and nonqualified stock options), stock appreciation rights,
restricted or unrestricted stock awards, phantom stock,
performance awards, other stock-based awards, or any combination
of the foregoing.
Under this Plan, except where the context otherwise indicates,
the following definitions apply:
(a)
Administrator
means the Board, the
Compensation Committee of the Board or such other committee(s)
or officer(s) appointed by the Board that have authority to
administer the Plan as provided in Section 3 hereof.
(b)
Affiliate
means any entity, whether
now or hereafter existing, which controls, is controlled by, or
is under common control with, the Company (including, but not
limited to, joint ventures, limited liability companies, and
partnerships). For this purpose,
control
shall mean ownership of 50% or more of the total combined voting
power or value of all classes of stock or interests of the
entity.
(c)
Award
means any stock option, stock
appreciation right, stock award, phantom stock award,
performance award, or other stock-based award.
(d)
Board
means the Board of Directors
of the Company.
(e)
Change in Control
means:
(i) the acquisition (other than from the Company), in one
or more transactions, by any Person of the beneficial ownership
(within the meaning of
Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as
amended) of 33% or more of (A) the then outstanding shares
of the securities of the Company, or (B) the combined
voting power of the then outstanding Company Voting Stock;
(ii) the closing of a sale or other conveyance of assets
representing 50% or more of the fair market value of the
Companys consolidated assets (in a single transaction or
in a series of related transactions); (iii) the dissolution
or liquidation of the Company; (iv) a change in the
composition of the Companys Board of Directors, as a
result of which, fewer than one-half of the incumbent directors
after such change are directors who either (A) had been
directors of the Company 24 months prior to such change or
(B) were elected, or nominated for election, to the Board
of Directors with the approval of at least a majority of the
directors who had been the Companys directors
24 months prior to such change and who were still in office
at the time of the election or nomination; or (v) the
effective time of any merger, share exchange, consolidation, or
other business combination involving the Company if immediately
after such transaction persons who hold a majority of the
outstanding voting securities entitled to vote generally in the
election of directors of the surviving entity (or the entity
owning 100% of such surviving entity) are not persons who,
immediately prior to such transaction, held a majority of the
Company Voting Stock; provided, however, that a Change in
Control
B-1
shall not include (X) a public offering of capital stock of
the Company; (Y) any distribution of capital stock of the
Company by a partnership or limited liability company to a
partner of such partnership or member of such limited liability
company in respect of the interest of such partner or member and
without the payment of additional consideration; or (Z) any
transaction pursuant to which shares of capital stock of the
Company are transferred or issued to any trust, charitable
organization, foundation, family partnership or other entity
controlled directly or indirectly by, or established for the
benefit of any of the current or former executive officers of
the Company or their immediate family members (including
spouses, children, grandchildren, parents, and siblings, in each
case to include adoptive relations), or transferred to any such
immediate family members.
(f)
Code
means the Internal Revenue Code
of 1986, as amended, and any regulations promulgated thereunder.
(g)
Common Stock
means shares of common
stock of the Company, par value of one cent ($0.01) per share.
(h)
Company Voting Stock
means
securities of the Company entitled to vote generally in the
election of directors.
(i)
Eligible Director
means a director
of the Company who is not an employee of the Company or any
Affiliate.
(j)
Fair Market Value
means, with
respect to a share of the Companys Common Stock for any
purpose on a particular date, the value determined by the
Administrator in good faith. However, if the Common Stock is
registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, and listed for trading on a
national exchange or market,
Fair Market
Value
means, as applicable, (i) either the
closing price or the average of the high and low sale price on
the relevant date, as determined in the Administrators
discretion, quoted on the New York Stock Exchange, the American
Stock Exchange, or the Nasdaq Global Market; (ii) the last
sale price on the relevant date quoted on the Nasdaq Capital
Market; (iii) the average of the high bid and low asked
prices on the relevant date quoted on the Nasdaq OTC
Bulletin Board Service or by the National Quotation Bureau,
Inc. or a comparable service as determined in the
Administrators discretion; or (iv) if the Common
Stock is not quoted by any of the above, the average of the
closing bid and asked prices on the relevant date furnished by a
professional market maker for the Common Stock, or by such other
source, selected by the Administrator. If no public trading of
the Common Stock occurs on the relevant date but the shares are
so listed, then Fair Market Value shall be determined as of the
next preceding date on which trading of the Common Stock does
occur. For all purposes under this Plan, the term
relevant date
as used in this
Section 2(j) means either the date as of which Fair Market
Value is to be determined or the next preceding date on which
public trading of the Common Stock occurs, as determined in the
Administrators discretion.
(k)
Grant Agreement
means a written
document memorializing the terms and conditions of an Award
granted pursuant to the Plan and shall incorporate the terms of
the Plan.
(l)
Person
means any individual, entity
or group within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended, other than:
employee benefit plans sponsored or maintained by the Company or
by Affiliates controlled by the Company, or an underwriter of
the Common Stock in a registered public offering.
(a)
Administration of the Plan.
The Plan
shall be administered by the Board or by the Compensation
Committee of the Board or such other committee or committees as
may be appointed by the Board from time to time. To the extent
allowed by applicable state law, the Board by resolution may
authorize an officer or officers to grant Awards (other than
Stock Awards) to other officers and employees of the Company and
its Affiliates, and, to the extent of such authorization, such
officer or officers shall be the Administrator.
B-2
(b)
Powers of the Administrator.
The
Administrator shall have all the powers vested in it by the
terms of the Plan, such powers to include authority, in its sole
and absolute discretion, to grant Awards under the Plan,
prescribe Grant Agreements evidencing such Awards and establish
programs for granting Awards.
The Administrator shall have full power and authority to take
all other actions necessary to carry out the purpose and intent
of the Plan, including, but not limited to, the authority to:
(i) determine the eligible persons to whom, and the time or
times at which Awards shall be granted; (ii) determine the
types of Awards to be granted; (iii) except for Awards
granted pursuant to Section 6(a)(ii), determine the number
of shares to be covered by or used for reference purposes for
each Award; (iv) impose such terms, limitations,
restrictions and conditions upon any such Award as the
Administrator shall deem appropriate; (v) modify, amend,
extend, renew or reprice outstanding Awards, or accept the
surrender of outstanding Awards and substitute new Awards
(provided however, that, except as provided in Section 7(d)
of the Plan, any modification that would materially adversely
affect any outstanding Award shall not be made without the
consent of the holder); (vi) accelerate or otherwise change
the time in which an Award may be exercised or becomes payable
and to waive or accelerate the lapse, in whole or in part, of
any restriction or condition with respect to such Award,
including, but not limited to, any restriction or condition with
respect to the vesting or exercisability of an Award following
termination of any grantees employment or other
relationship with the Company; (vii) establish objectives
and conditions, if any, for earning Awards and determining
whether Awards will be paid after the end of a performance
period; and (viii) for any purpose, including but not
limited to, qualifying for preferred tax treatment under foreign
tax laws or otherwise complying with the regulatory requirements
of local or foreign jurisdictions, to establish, amend, modify,
administer or terminate
sub-plans,
and prescribe, amend and rescind rules and regulations relating
to such
sub-plans.
The Administrator shall have full power and authority, in its
sole and absolute discretion, to administer and interpret the
Plan, Grant Agreements and all other documents relevant to the
Plan and Awards issued thereunder, and to adopt and interpret
such rules, regulations, agreements, guidelines and instruments
for the administration of the Plan and for the conduct of its
business as the Administrator deems necessary or advisable.
Awards to Eligible Directors, as provided in
Section 6(a)(ii), shall be automatic and nondiscretionary
to the extent provided in Section 6(a)(ii).
(c)
Non-Uniform Determinations.
The
Administrators determinations under the Plan (including
without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms
and provisions of such Awards and the Grant Agreements
evidencing such Awards) need not be uniform and may be made by
the Administrator selectively among persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such
persons are similarly situated.
(d)
Limited Liability.
To the maximum
extent permitted by law, no member of the Administrator shall be
liable for any action taken or decision made in good faith
relating to the Plan or any Award thereunder.
(e)
Indemnification.
To the maximum
extent permitted by law and by the Companys charter and
by-laws, the members of the Administrator shall be indemnified
by the Company in respect of all their activities under the Plan.
(f)
Effect of Administrators
Decision.
All actions taken and decisions and
determinations made by the Administrator on all matters relating
to the Plan pursuant to the powers vested in it hereunder shall
be in the Administrators sole and absolute discretion and
shall be conclusive and binding on all parties concerned,
including the Company, its stockholders, any participants in the
Plan and any other employee, consultant, or director of the
Company, and their respective successors in interest.
|
|
4.
|
Shares Available
for the Plan; Maximum Awards
|
Subject to adjustments as provided in Section 7(d) of the
Plan, the shares of Common Stock that may be issued with respect
to Awards granted under the Plan shall not exceed an aggregate
of 19,848,182 shares of Common Stock. The Company shall
reserve such number of shares for Awards under the Plan, subject
to adjustments as provided in Section 7(d) of the Plan. If
any Award, or portion of an Award, under the Plan expires or
terminates unexercised, becomes unexercisable or is forfeited or
otherwise terminated, surrendered or canceled as to any shares,
or if any shares of Common Stock are repurchased at or below
cost by or surrendered to the Company in
B-3
connection with any Award (whether or not such surrendered
shares were acquired pursuant to any Award), or if any shares
are withheld by the Company, the shares subject to such Award
and the repurchased, surrendered and withheld shares shall
thereafter be available for further Awards under the Plan;
provided, however, that any such shares that are surrendered to
or repurchased or withheld by the Company in connection with any
Award or that are otherwise forfeited after issuance shall not
be available for purchase pursuant to incentive stock options
intended to qualify under Code section 422.
Subject to adjustments as provided in Section 7(d) of the
Plan, the maximum number of shares of Common Stock subject to
Awards of any combination that may be granted during any one
fiscal year of the Company to any one individual under this Plan
shall be limited to 3,000,000 shares. Such per-individual
limit shall not be adjusted to effect a restoration of shares of
Common Stock with respect to which the related Award is
terminated, surrendered or canceled.
Participation in the Plan shall be open to all employees,
officers, and directors of, and other individuals providing bona
fide services to or for, the Company, or of any Affiliate of the
Company, as may be selected by the Administrator from time to
time. The Administrator may also grant Awards to individuals in
connection with hiring, retention or otherwise, prior to the
date the individual first performs services for the Company or
an Affiliate, provided that such Awards shall not become vested
or exercisable prior to the date the individual first commences
performance of such services.
The Administrator, in its sole discretion, establishes the terms
of all Awards granted under the Plan. Awards may be granted
individually or in tandem with other types of Awards. All Awards
are subject to the terms and conditions provided in the Grant
Agreement. The Administrator may permit or require a recipient
of an Award to defer such individuals receipt of the
payment of cash or the delivery of Common Stock that would
otherwise be due to such individual by virtue of the exercise
of, payment of, or lapse or waiver of restrictions respecting,
any Award. If any such payment deferral is required or
permitted, the Administrator shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
(a)
Stock Options
.
(i) The Administrator may from time to time grant to
eligible participants Awards of incentive stock options as that
term is defined in Code section 422 or nonqualified stock
options; provided, however, that Awards of incentive stock
options shall be limited to employees of the Company or of any
current or hereafter existing parent corporation or
subsidiary corporation, as defined in Code
sections 424(e) and (f), respectively, of the Company, and
any other persons who are eligible to receive incentive stock
options within the meaning of Code section 422. Options
intended to qualify as incentive stock options under Code
section 422 must have an exercise price at least equal to
Fair Market Value as of the date of grant, but nonqualified
stock options may be granted with an exercise price less than
Fair Market Value. No stock option shall be an incentive stock
option unless so designated by the Administrator at the time of
grant or in the Grant Agreement evidencing such stock option.
(ii) Notwithstanding anything in the Plan to the contrary,
automatic options grants shall be made under this Plan to
Eligible Directors as follows:
(A) Each person who first becomes an Eligible Director
after September 2, 2003 shall be granted an option to
purchase 30,000 shares of Common Stock (the
Initial Grant
) on the date on which he or she
is initially elected or appointed to the Board.
(B) Each Eligible Director shall be granted an additional
option to purchase 20,000 shares of Common Stock, or an
option to purchase 30,000 shares of common stock to the
chairman of the board of directors if he or she is a non-
employee director, (an
Annual Grant
) on the
date of each annual general stockholders meeting at which
members of the Board are elected or re-elected, provided
however, that he or she continues to serve as an Eligible
Director immediately following the meeting.
B-4
(C) The exercise price per share for each option granted
under this Section 6(a)(ii) shall be the Fair Market Value
per share of Common Stock on the date of grant of the option.
For purposes of the immediately preceding sentence, Fair Market
Value shall mean, at any time when the Common Stock is listed on
the Nasdaq Global Market or a similar national exchange or
market, the closing price per share of the Companys Common
Stock on the Nasdaq Global Market, or the principal exchange or
market on which the Common Stock is then listed, on the date of
grant, and if no such price is reported on such date, such price
as reported on the nearest preceding date on which such price is
reported.
(D) Each Initial Grant shall vest in 36 equal, monthly
installments, in arrears, beginning immediately following the
grant date. Each Annual Grant shall vest in 12 equal, monthly
installments, in arrears, beginning immediately following the
grant date. No option granted to an Eligible Director under this
Section 6(a)(ii) shall become vested with respect to any
shares of Common Stock after the date on which such Eligible
Director ceases to serve as a member of the Board. An option
granted to an Eligible Director under this Section 6(a)(ii)
may be exercised from time to time, in whole or in part, prior
to the earlier of (x) 180 days after a grantee ceases
to serve as a Director (one year if the grantee ceases to serve
because of his or her death or permanent and total disability)
or (y) the tenth anniversary of the date of grant.
(E) In the event of a Change in Control, any outstanding
options granted pursuant to this Section 6(a)(ii) prior to
the date of such Change in Control shall be 100% vested and
exercisable on the date of, and immediately before, such Change
in Control.
(F) Options granted under this Section 6(a)(ii) may be
exercised only by notice (in a form prescribed by or acceptable
to the Company) to the Company at its principal executive
office. Payment of the exercise price may be made by delivery of
cash or check to the order of the Company in an amount equal to
the exercise price, or to the extent permitted by the Company,
by delivery to the Company of shares of Common Stock of the
Company already owned that are mature shares under
Generally Accepted Accounting Standards of the United States and
having a Fair Market Value equal in amount to the exercise price
of the option being exercised, or a combination thereof.
(b)
Stock Appreciation Rights.
The
Administrator may from time to time grant to eligible
participants Awards of Stock Appreciation Rights
(
SAR
). An SAR entitles the grantee to
receive, subject to the provisions of the Plan and the Grant
Agreement, a payment having an aggregate value equal to the
product of (i) the excess of (A) the Fair Market Value
on the exercise date of one share of Common Stock over
(B) the base price per share specified in the Grant
Agreement, times (ii) the number of shares specified by the
SAR, or portion thereof, which is exercised. Payment by the
Company of the amount receivable upon any exercise of an SAR may
be made by the delivery of Common Stock or cash, or any
combination of Common Stock and cash, as determined in the sole
discretion of the Administrator. If upon settlement of the
exercise of an SAR a grantee is to receive a portion of such
payment in shares of Common Stock, the number of shares shall be
determined by dividing such portion by the Fair Market Value of
a share of Common Stock on the exercise date. No fractional
shares shall be used for such payment and the Administrator
shall determine whether cash shall be given in lieu of such
fractional shares or whether such fractional shares shall be
eliminated.
(c)
Stock Awards
.
(i) The Administrator may from time to time grant
restricted or unrestricted stock Awards to eligible participants
in such amounts, on such terms and conditions, and for such
consideration, including no consideration or such minimum
consideration as may be required by law, as it shall determine.
A stock Award may be paid in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole
discretion of the Administrator.
(ii) The Administrator may grant stock awards in a manner
constituting qualified performance-based
compensation within the meaning of Code
Section 162(m). The grant of, or lapse of restrictions with
respect to, such performance-based stock awards shall be based
upon one or more Performance Measures and objective performance
targets to be attained relative to those Performance Measures,
all as determined by the Administrator. Performance targets may
include minimum, maximum and target levels of performance, with
the size of the performance-based stock award or the lapse of
restrictions with respect thereto based on the level attained.
B-5
Performance Measures
shall mean criteria
established by the Administrator relating to any of the
following, as it may apply to an individual, one or more
business units, divisions or subsidiaries, or on a Company-wide
basis, and in either absolute terms or relative to the
performance of one or more comparable companies or an index
covering multiple companies: revenue; earnings before interest,
taxes, depreciation and amortization (EBITDA); income before
income taxes and minority interests; current value
shareholders equity; corporate liquidity; financing
activities; licensing transactions; joint ventures;
co-promotional partnerships; operating income; pre- or after-tax
income; cash flow; cash flow per share; net earnings; earnings
per share; return on equity; share price performance; total
stockholder return; relative performance to a group of companies
or relevant market indices comparable to the Company, and
strategic business criteria consisting of one or more objectives
based on the Company meeting specified goals relating to
revenue, market penetration, business expansion, costs or
acquisitions or divestitures.
(d)
Phantom Stock.
The Administrator may
from time to time grant Awards to eligible participants
denominated in stock-equivalent units (
phantom
stock
) in such amounts and on such terms and
conditions as it shall determine. Phantom stock units granted to
a participant shall be credited to a bookkeeping reserve account
solely for accounting purposes and shall not require a
segregation of any of the Companys assets. An Award of
phantom stock may be settled in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole
discretion of the Administrator. Except as otherwise provided in
the applicable Grant Agreement, the grantee shall not have the
rights of a stockholder with respect to any shares of Common
Stock represented by a phantom stock unit solely as a result of
the grant of a phantom stock unit to the grantee.
(e)
Performance Awards.
In addition to
the Awards described in Section 6(c)(ii), the Administrator
may, in its discretion, grant performance awards which become
payable on account of attainment of one or more performance
goals established by the Administrator. Performance awards may
be paid by the delivery of Common Stock or cash, or any
combination of Common Stock and cash, as determined in the sole
discretion of the Administrator. Performance goals established
by the Administrator may be based on the Companys or an
Affiliates operating income or one or more other business
criteria selected by the Administrator that apply to an
individual or group of individuals, a business unit, or the
Company or an Affiliate as a whole, over such performance period
as the Administrator may designate.
(f)
Other Stock-Based Awards.
The
Administrator may from time to time grant other stock-based
awards to eligible participants in such amounts, on such terms
and conditions, and for such consideration, including no
consideration or such minimum consideration as may be required
by law, as it shall determine. Other stock-based awards may be
denominated in cash, in Common Stock or other securities, in
stock-equivalent units, in stock appreciation units, in
securities or debentures convertible into Common Stock, or in
any combination of the foregoing and may be paid in Common Stock
or other securities, in cash, or in a combination of Common
Stock or other securities and cash, all as determined in the
sole discretion of the Administrator.
(a)
Withholding of Taxes.
Grantees and
holders of Awards shall pay to the Company or its Affiliate, or
make provision satisfactory to the Administrator for payment of,
any taxes required to be withheld in respect of Awards under the
Plan no later than the date of the event creating the tax
liability. The Company or its Affiliate may, to the extent
permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the grantee or holder of an
Award. In the event that payment to the Company or its Affiliate
of such tax obligations is made in shares of Common Stock, such
shares shall be valued at Fair Market Value on the applicable
date for such purposes and shall not exceed in amount the
minimum statutory tax withholding obligation.
(b)
Loans.
To the extent otherwise
permitted by law, the Company or its Affiliate may make or
guarantee loans to grantees to assist grantees in exercising
Awards and satisfying any withholding tax obligations.
(c)
Transferability.
Except as otherwise
determined by the Administrator, and in any event in the case of
an incentive stock option or a stock appreciation right granted
with respect to an incentive stock option, no Award granted
under the Plan shall be transferable by a grantee otherwise than
by will or the laws of descent and distribution. Unless
otherwise determined by the Administrator in accord with the
provisions of the immediately preceding sentence, an Award may
be exercised during the lifetime of the grantee, only by the
grantee or, during the period the grantee is under a legal
disability, by the grantees guardian or legal
representative.
B-6
(d)
Adjustments; Business Combinations
.
(i) Upon a stock dividend of, or stock split or reverse
stock split affecting, the Common Stock of the Company,
(A) the maximum number of shares reserved for issuance or
with respect to which Awards may be granted under the Plan and
the maximum number of shares with respect to which Awards may be
granted during any one fiscal year of the Company to any
individual, as provided in Section 4 of the Plan,
(B) the number of shares with respect to which Awards are
to be granted as provided in Section 6(a)(ii), and
(C) the number of shares covered by and the exercise price
and other terms of outstanding Awards, shall, without further
action of the Board, be adjusted to reflect such event unless
the Board determines, at the time it approves such stock
dividend, stock split or reverse stock split, that no such
adjustment shall be made. The Administrator may make
adjustments, in its discretion, to address the treatment of
fractional shares and fractional cents that arise with respect
to outstanding Awards as a result of the stock dividend, stock
split or reverse stock split.
(ii) In the event of any other changes affecting the
Company, the capitalization of the Company or the Common Stock
of the Company by reason of any spin-off,
split-up,
dividend, recapitalization, merger, consolidation, business
combination or exchange of shares and the like, the
Administrator, in its discretion and without the consent of
holders of Awards, shall make: (A) appropriate adjustments
to the maximum number and kind of shares reserved for issuance
or with respect to which Awards may be granted under the Plan,
in the aggregate and with respect to any individual during any
one fiscal year of the Company, as provided in Section 4
and 6(a)(ii) of the Plan, and to the number, kind and price of
shares covered by outstanding Awards; and (B) any other
adjustments in outstanding Awards, including but not limited to
reducing the number of shares subject to Awards or providing or
mandating alternative settlement methods such as settlement of
the Awards in cash or in shares of Common Stock or other
securities of the Company or of any other entity, or in any
other matters which relate to Awards as the Administrator shall,
in its sole discretion, determine to be necessary or appropriate.
(iii) The Administrator is authorized to make, in its
discretion and without the consent of holders of Awards,
adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring
events affecting the Company, or the financial statements of the
Company or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate
in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan
and outstanding Awards.
(e)
Substitution of Awards in Mergers and
Acquisitions.
Awards may be granted under the
Plan from time to time in substitution for Awards held by
employees, officers, consultants or directors of entities who
become or are about to become employees, officers, consultants
or directors of the Company or an Affiliate as the result of a
merger or consolidation of the employing entity with the Company
or an Affiliate, or the acquisition by the Company or an
Affiliate of the assets or stock of the employing entity. The
terms and conditions of any substitute Awards so granted may
vary from the terms and conditions set forth herein to the
extent that the Administrator deems appropriate at the time of
grant to conform the substitute Awards to the provisions of the
awards for which they are substituted.
(f)
Termination, Amendment and Modification of the
Plan.
The Board or the Administrator may
terminate, amend or modify the Plan or any portion thereof at
any time. Except as otherwise determined by the Board,
termination of the Plan shall not affect the
Administrators ability to exercise the powers granted to
it hereunder with respect to Awards granted under the Plan prior
to the date of such termination.
(g)
Non-Guarantee of Employment or
Service.
Nothing in the Plan or in any Grant
Agreement thereunder shall confer any right on an individual to
continue in the service of the Company or shall interfere in any
way with the right of the Company to terminate such service at
any time with or without cause or notice.
(h)
No Trust or
Fund Created.
Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company and
a grantee or any other person. To the extent that any grantee or
other person acquires a right to receive payments from the
Company pursuant to an Award, such right shall be no greater
than the right of any unsecured general creditor of the Company.
(i)
Governing Law.
The validity,
construction and effect of the Plan, of Grant Agreements entered
into pursuant to the Plan, and of any rules, regulations,
determinations or decisions made by the Administrator relating
to
B-7
the Plan or such Grant Agreements, and the rights of any and all
persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with
applicable federal laws and the laws of the State of Delaware,
without regard to its conflict of laws principles.
(j)
Effective Date; Termination Date.
The
Plan was originally effective on May 17, 2000. As amended,
the effective date of the Plan is April 17, 2009. No Award
shall be granted under the Plan after October 6, 2013.
Subject to other applicable provisions of the Plan, all Awards
made under the Plan prior to such termination of the Plan shall
remain in effect until such Awards have been satisfied or
terminated in accordance with the Plan and the terms of such
Awards.
Plan
History
|
|
|
|
|
|
Date Approved by the Board
|
|
Original Plan Advancis Pharmaceutical Corporation
Stock Incentive Plan: May 17, 2000 (as amended March 8, 2001;
July 20, 2001; October 25, 2001; April 9, 2002; September 2,
2003).
|
|
|
|
|
|
Amended and Restated Plan (first): October 7, 2003
|
|
|
|
|
|
Amended and Restated Plan (second): March 31, 2004
|
|
|
|
|
|
Amended and Restated Plan (third): April 12, 2005
|
|
|
|
|
|
Amended and Restated Plan (fourth): February 1, 2007
|
|
|
|
|
|
MiddleBrook Pharmaceuticals, Inc. Stock Incentive Plan: July 14,
2008
|
|
|
|
|
|
Amended and Restated Plan (first): April 17, 2009
|
|
|
|
Date Approved by the Stockholders:
|
|
Original Plan Advancis Pharmaceutical Corporation
Stock Incentive Plan: September 18, 2000 (as amended March 8,
2001; July 20, 2001; October 25, 2001; April 9, 2002; September
2, 2003).
|
|
|
|
|
|
Amended and Restated Plan (first): October 7, 2003
|
|
|
|
|
|
Amended and Restated Plan (second): June 3, 2004
|
|
|
|
|
|
Amended and Restated Plan (third): May 25, 2005
|
|
|
|
|
|
Amended and Restated Plan (fourth): May 21, 2007
|
|
|
|
|
|
MiddleBrook Pharmaceuticals, Inc. Stock Incentive Plan:
September 4, 2008
|
|
|
|
|
|
Amended and Restated Plan (first): June , 2009
|
B-8
ANNUAL MEETING OF
STOCKHOLDERS OF
MIDDLEBROOK PHARMACEUTICALS, INC.
June 23,
2009
PROXY
VOTING
INSTRUCTIONS
INTERNET
- Access
www.voteproxy.com
and follow the on-screen instructions. Have your proxy card available when you access the web page, and use the Company Number and Account Number shown on your proxy card.
TELEPHONE
- Call toll-free
1-800-PROXIES
(1-800-776-9437) in the United States or
1-718-921-8500
from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call and use the Company Number and Account Number shown on your proxy card.
Vote online/phone until 11:59 PM EST the day before the meeting.
MAIL
- Sign, date and mail your proxy card in the envelope provided as soon as possible.
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY
NUMBER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCOUNT
NUMBER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 23, 2009.
The 2008 Annual Report, the Annual Report on Form 10-K for the year
ended December 31, 2008, and the Proxy Statement
are available at http://proxy.middlebrookpharma.com
â
Please detach along perforated line and mail
in the envelope provided
IF
you are not voting via telephone or the
Internet.
â
|
|
|
|
|
|
20333300000000000000 0
|
062309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSALS 1, 2, 3 AND 4 BELOW.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
1. Election of the following three nominees named in the attached proxy for three year terms:
|
|
|
|
2.
3.
|
|
To amend the certificate of incorporation and bylaws to declassify the Board of Directors.
To amend
MiddleBrooks Stock Incentive Plan to increase shares available for issuance by 3,500,000.
|
|
o
o
|
|
o
o
|
|
o
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINEES:
|
|
|
|
|
|
|
|
|
o
|
|
FOR ALL NOMINEES
|
|
O
|
|
Lord James Blyth
|
|
|
|
|
|
|
|
|
|
|
|
O
|
|
James H. Cavanaugh, Ph. D.
|
|
|
|
|
4.
|
|
To ratify the selection of PricewaterhouseCoopers LLP, as MiddleBrooks independent registered public accounting firm.
|
|
o
|
|
o
|
|
o
|
o
|
|
WITHHOLD AUTHORITY
|
|
O
|
|
John Thievon
|
|
|
|
|
|
|
|
FOR ALL NOMINEES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
FOR ALL EXCEPT
(See instructions below)
|
|
|
|
|
|
|
|
|
This proxy, when properly signed, will be voted as
directed by the undersigned stockholder(s). If no direction is made, this proxy will be voted FOR
the election of the nominees indicated in Proposal 1, FOR amendment to MiddleBrooks
certificate of incorporation and bylaws to declassify the board,FOR amendment to
MiddleBrooks Stock Incentive Plan, FOR the ratification of the selection of PricewaterhouseCoopers
LLP as MiddleBrooks independent registered public accounting firm, and with discretionary authority on
all other matters that may properly come before the annual meeting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s), mark
FOR
ALL EXCEPT
and fill in the circle next to each nominee you wish to
withhold, as shown here:
=
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check
the box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not
be submitted via this method.
|
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of
Stockholder
|
|
Date:
|
|
Signature of Stockholder
|
|
Date:
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
|
|
|
MIDDLEBROOK PHARMACEUTICALS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS
to be held June 23, 2009 at 8:30 a.m., local time,
at MiddleBrooks headquarters located at 7 Village Circle, Suite 100, Westlake, Texas 76262
As an alternative to completing this form, you may enter your vote instruction by telephone at
1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM and follow the simple instructions. Use the
Company Number and Account Number shown on your proxy card.
The undersigned hereby appoints David Becker and Brad Cole, or either of them, as proxies with
full power of substitution, with all the powers the undersigned would possess if personally
present, to vote all of the shares of common stock of MiddleBrook Pharmaceuticals, Inc., which the
undersigned is entitled to vote at the Annual Meeting of Stockholders and any adjournment(s)
thereof. To attend the 2009 Annual Meeting of Stockholders and vote in person, please see
Questions and Answers about the Annual Meeting- Am I entitled to vote if my shares are held in
street name? and- How do I vote? in the Proxy Statement. The undersigned hereby revokes any
other proxy previously executed by the undersigned for the Annual Meeting of Stockholders.
(Continued and to be signed on the reverse side.)
Middlebrook Pharmaceuticals (MM) (NASDAQ:MBRK)
Graphique Historique de l'Action
De Août 2024 à Sept 2024
Middlebrook Pharmaceuticals (MM) (NASDAQ:MBRK)
Graphique Historique de l'Action
De Sept 2023 à Sept 2024