REPORT OF THE AUDIT COMMITTEE
During the
20152021 fiscal year, the Audit Committee, operating under its written charter
that has been approved by the full Board of Directors, consisted solely of
three independent directors, as defined in
Nasdaq Rule 5605(a)(2)
, each of whom has been determined by the Board to qualify as a financial expert, within the meaning of the
NASDAQ Marketplace Rules.regulations of the Securities and Exchange Commission. The Audit Committee assists the Board of Directors in monitoring the
quality and integrity of SIGA’s financial statements, the independent registered public accounting firm’s qualifications and independence, the performance of the independent registered public accounting firm,
and SIGA’s compliance with applicable legal and regulatory
requirements.requirements, and SIGA’s assessment of financial risk exposures. Management is responsible for SIGA’s internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of SIGA’s
consolidated financial statements
and the effectiveness of its internal controls over financial reporting in accordance with generally accepted auditing standards and for issuing
a reportits reports on those financial
statements.statements and related internal controls. The Audit Committee monitors and oversees these processes.
In this context, the Audit Committee has reviewed and discussed the audited
consolidated financial statements
as of and for the year ended December 31,
20152021 and internal controls over financial reporting as of December 31, 2021 with management and with PricewaterhouseCoopers LLP
(“PwC”), SIGA’s independent registered public accounting firm.
TheAlso, the Audit Committee has discussed with
PricewaterhouseCoopers LLPPwC the matters required to be discussed
by the statement on Auditing Standards No. 61, as amended (AICPA,Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”)
in Rule 3200T, which includes, among other items, matters related toand the
conduct of the audit of SIGA’s annual financial statements.Securities and Exchange Commission.
The Audit Committee has
also received the written disclosures and the letter from
PricewaterhouseCoopers LLPPwC required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with
PricewaterhouseCoopers LLPPwC its audit and other fees and the issue of its independence from SIGA.
The Audit Committee has concluded that the fees paid to PwC are compatible with its independence.
Based on its review of the audited consolidated financial statements and the various discussions noted above, the Audit Committee recommended to the Board of Directors that the audited financial statements for the year ended December 31, 20152021 be included in SIGA’s Annual Report on Form 10-K filing with the SEC. The Audit Committee has also recommended, subject to stockholder ratification, the selection of SIGA’s independent registered public accounting firm for the year ending December 31, 2016. 2022.
| |
| | | Respectfully submitted by the Audit Committee, Paul G. Savas,
|
| | | |
| | | Michael C. Plansky, Chairman |
| | | James J. Antal Bruce Slovin
|
| |
| 10Joseph W. “Chip” Marshall, III |
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATIONTABLE OF CONTENTS
The Compensation Committee, comprised of independent directors, has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on the review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
| Respectfully submitted by the Compensation Committee,
Joseph W. Marshall, Chairman
Paul G. Savas
Bruce Slovin
| |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Ownership of Common Stock The following tables set forth certain information regarding the beneficial ownership of SIGA’s voting securities as of March 15, 2016April 18, 2022 of (i) each person known to SIGA to own beneficially more than 5% of the applicable class of voting securities,outstanding Common Stock, (ii) each director and director nominee of SIGA, (iii) each Named Executive Officer (as defined below) and (iv) all directors and executive officers of SIGA as a group. As of March 15, 2016,April 18, 2022, a total of 54,114,29672,406,667 shares of Common Stock were outstanding. Each share of Common Stock is entitled to one vote on matters on which holders of Common Stock are eligible to vote. The column entitled “Percentage of Total Voting Stock Outstanding” shows the percentage of total voting stock beneficially owned by each listed party. The number of shares beneficially owned is determined under rules promulgated by the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days of March 15, 2016,April 18, 2022, through the exercise or conversion of any stock option, convertible security, warrant or other right. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity. | | | | | | | | | Name and Address of Beneficial Owner (1) | | Amount of Beneficial Ownership (2) | | | Percentage of Common Stock Outstanding | | Percentage of Total Voting Stock Outstanding | MacAndrews & Forbes Incorporated (3) 35 East 62nd Street New York, NY 10065 | | 13,509,722 | | | 24.97% | | 24.97% | | | | | | | | | Jet Capital Investors, L.P. (4) 667 Madison Avenue, 9th Floor New York, NY 10021 | | 4,955,721 | | | 9.16% | | 9.11% | | | | | | | | | John Latane Lewis IV (5) 4752 Sherwood Farm Charlottesville, VA 22902 | | 2,730,852 | | | 5.05% | | 5.05% | | | | | | | | | James J. Antal 30952 Steeplechase Dr. San Juan Capistrano, CA 92675 | | 141,154 | (6) | | * | | * | | | | | | | | | Michael J. Bayer Dumbarton Strategies 3130 Dumbarton Street, NW Washington, D.C. 20007 | | 115,000 | (7) | | * | | * | | | | | | | | | Thomas E. Constance Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036 | | 275,000 | (6) | | * | | * | | | | | | | | | Jeffrey Kindler Starboard Capital Partners LLC 30 Jelliff Lane Southport, CT 06890 | | 70,000 | (8) | | * | | * | | | | | | | | | Joseph W. Marshall III Stevens & Lee 1818 Market Street Philadelphia, PA 19103 | | 130,000 | (7) | | * | | * |
| | | | | | | | | Name and Address of Beneficial Owner (1) | | Amount of Beneficial Ownership (2) | | | Percentage of Common Stock Outstanding | | Percentage of Total Voting Stock Outstanding | | | | | | | | | Paul G. Savas 35 East 62nd Street New York, NY 10065 | | 181,840 | (6) | | * | | * | | | | | | | | | Bruce Slovin 1 Eleven Associates LLC 111 East 61st Street New York, NY 10065 | | 255,000 | (7) | | * | | * | | | | | | | | | Andrew Stern Old North 402 Georgetown University 37th and O St. NW Washington, D.C. 20057 | | 97,150 | (9) | | * | | * | | | | | | | | | Eric A. Rose, M.D. | | 1,339,663 | (10) | | 2.45% | | 2.45% | Dennis E. Hruby, Ph.D. | | 513,463 | (11) | | * | | * | Daniel J. Luckshire | | 380,661 | (12) | | * | | * | | | | | | | | | All executive officers and directors as a group (twelve individuals) | | 3,498,931 | (13) | | 6.27% | | 6.27% |
MacAndrews & Forbes Incorporated(3)
35 East 62nd Street
New York, NY 10065
| | | 24,156,358 | | | 33.36% | John Latane Lewis, IV(4)
4752 Sherwood Farm
Charlottesville, VA 22902
| | | 4,982,719 | | | 6.88% | BlackRock, Inc.(5)
55 East 52nd Street
New York, NY 10055
| | | 3,620,878 | | | 5.00% | James J. Antal
30952 Steeplechase
Dr. San Juan Capistrano, CA 92675
| | | 116,857(6) | | | * | Jaymie A. Durnan | | | 55,982(7) | | | * | Julie M. Kane | | | 73,482(8) | | | * | Joseph W. Marshall III
Stevens & Lee
1818 Market Street
Philadelphia, PA 19103
| | | 188,751(9) | | | * | Gary J. Nabel | | | 40,982(10) | | | * | Julian Nemirovsky | | | 40,982(11) | | | * | Holly L. Phillips | | | 40,982(12) | | | * | Michael C. Plansky | | | 100,982(13) | | | * | Phillip. L. Gomez, Ph.D. | | | 475,782 | | | * | Daniel J. Luckshire | | | 251,370 | | | * | Dennis E. Hruby, Ph.D. | | | 147,465 | | | * | Robin E. Abrams(14) | | | 49,787 | | | * | All executive officers and directors as a group (eleven individuals) | | | 1,533,617(15) | | | 2.12% |
(1)
| Unless otherwise indicated the address of each beneficial owner identified is 660 Madison Avenue, Suite 1700,31 East 62nd Street, 5th floor, New York, New York 10065. |
| (2)
| Unless otherwise indicated, each person has sole investment and voting power with respect to the shares indicated. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares as of a given date which such person has the right to acquire within 60 days after such date. For purposes of computing the percentage of outstanding shares held by each person or group of persons named above on a given date, any security which such person or persons has the right to acquire within 60 days after such date is |
TABLE OF CONTENTS deemed to be outstanding for the purpose of computing the percentage ownership of such person or persons, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. (3)
| Based on the purpose of computingamended Schedule 13D filed with the percentage ownership of such person or persons, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. |
| (3) | SEC on September 17, 2021 by MacAndrews & Forbes Incorporated, reporting beneficial ownership. The underlying beneficial owners, MacAndrews & ForbesMFV Holdings One LLC and MacAndrews & Forbes GroupST Holdings One LLC, are direct wholly owned subsidiaries of MacAndrews & Forbes Incorporated (“M&F”), a holding company whoseGroup LLC, which is direct wholly owned subsidiary of MacAndrews and Forbes Incorporated. The ROP Revocable Trust dated 1/9/2018, of which Ronald O. Perelman is the sole trustee and beneficiary, is the sole stockholder is Ronald O. Perelman.of MacAndrews & Forbes Incorporated. Each of MacAndrews & Forbes Incorporated, MacAndrews & Forbes LLC, MFV Holdings One LLC, and ST Holdings One LLC has shared voting and dispositive power over 24,156,358 shares of Common Stock. |
| (4)
| Based on a motion filed on March 21, 2016 on behalf of Jet Capital Management, LP in the United States Bankruptcy Court for the Southern District of New York. |
| (5) | Based on aamended Schedule 13G filed with the SEC on January 8, 2016June 5, 2020 by John Latane Lewis, IV reporting beneficial ownership. |
(5)
| (6) | Includes 60,000Based on the amended Schedule 13G filed with the SEC on February 9, 2022 by BlackRock, Inc. reporting (i) sole voting power over 3,305,907 shares of Common Stock issuable upon exerciseand (ii) sole dispositive power over 3,620,878 shares of options. Also includes 15,000Common Stock. |
(6)
| Includes 15,982 restricted stock units vesting on MayJune 14, 2016. |
| (7) | Includes 55,000 shares of Common Stock issuable upon exercise of options. Also includes 15,0002022. Excludes 6,849 restricted stock units vestingexpected to be settled in cash on MayJune 14, 2016.2022. |
| (8)(7)
| Includes 25,000 shares of Common Stock issuable upon exercise of options. Also includes 15,00015,982 restricted stock units vesting on MayJune 14, 2016.2022. Excludes 6,849 restricted stock units expected to be settled in cash on June 14, 2022. |
| (9)(8)
| Includes 35,00025,000 shares of Common Stock issuable upon exercise of options. Also includes 15,00015,982 restricted stock units vesting on MayJune 14, 2016.2022. Excludes 6,849 restricted stock units expected to be settled in cash on June 14, 2022. |
| (10)(9)
| Includes 510,00015,982 restricted stock units vesting on June 14, 2022. Excludes 6,849 restricted stock units expected to be settled in cash on June 14, 2022. |
(10)
| Includes 25,000 shares of Common Stock issuable upon exercise of options; 100,233options. Also includes 15,982 restricted stock units vesting on June 14, 2022. Excludes 6,849 restricted stock units expected to be settled in cash on June 14, 2022. |
(11)
| Includes 25,000 shares of Common Stock issuable upon exercise of stock-settled stock appreciation rights; and 133,333 shares of Common Stock issuable upon release ofoptions. Also includes 15,982 restricted stock units.units vesting on June 14, 2022. Excludes 6,849 restricted stock units expected to be settled in cash on June 14, 2022. |
| (11)(12)
| Includes 250,00025,000 shares of Common Stock issuable upon exercise of options; 91,339options. Also includes 15,982 restricted stock units vesting on June 14, 2022. Excludes 6,849 restricted stock units expected to be settled in cash on June 14, 2022. |
(13)
| Includes 25,000 shares of Common Stock issuable upon exercise of stock-settled stock appreciation rights; and 50,000 shares of Common Stock issuable upon release ofoptions. Also includes 15,982 restricted stock units. Does not include 10,808 shares of Common Stock issuable upon exercise of options owned by Dr. Hruby’s spouse to which he disclaims beneficial ownership. |
| (12) | Includes 120,000 shares of Common Stock issuable upon exercise of options; 89,640 shares of Common Stock issuable upon exercise of stock-settled stock appreciation rights; and 66,669 shares of Common Stock issuable upon release ofunits vesting on June 14, 2022. Excludes 6,849 restricted stock units.units expected to be settled in cash on June 14, 2022. |
(14)
| (13)On March 18, 2022, Ms. Abrams tendered her resignation as the General Counsel and Chief Administrative Officer, which resignation was effective April 15, 2022. |
(15)
| See footnotes (6)-(12)(13). |
TABLE OF CONTENTS The following table sets forth certain information with respect to the executive officers of SIGA: Eric A. Rose, M.D.Phillip L. Gomez, Ph.D. | 65 | | 55 | | | Chief Executive Officer and Chairman of the BoardDirector | Daniel J. Luckshire | 45 | | 51 | | | Executive Vice President, Chief Financial Officer and Corporate Secretary | Dennis E. Hruby, Ph.D. | 64 | | 70 | | | Executive Vice President and Chief Scientific Officer | Robin E. Abrams
| 52
| General Counsel and Chief Administrative Officer (effective April 12, 2016)
| William J. Haynes | 58 | Executive Vice President and General Counsel (resigned, effective January 5, 2016) |
Daniel J. Luckshire has served as Executive Vice President and Chief Financial Officer since February 2011. Prior to joining SIGA, Mr. Luckshire was a strategic advisor and private investor for companies within specialized market segments. Between 1998 and 2008, Mr. Luckshire was an investment banker at Merrill Lynch & Co., where he held various positions of increasing responsibility. Prior to his employment with Merrill Lynch, Mr. Luckshire was a member of the management team that built USI Insurance Services into a national insurance brokerage and was a CPA at Price WaterhousePricewaterhouseCoopers LLP. Mr. Luckshire has a Master of Business Administration degree in Finance and Strategic Management from The Wharton School of the University of Pennsylvania and a Bachelor of Science degree from Villanova University. Dennis E. Hruby, Ph.D. has served as Vice President and Chief Scientific Officer since June 2000. From April 1, 1997 through June 2000, Dr. Hruby was our Vice President of Research. From January 1996 through March 1997, Dr. Hruby served as a senior scientific advisor to SIGA. Dr. Hruby is an Adjunct Courtesy Professor of Microbiology at Oregon State University, and from 1990 to 1993 was Director of the Molecular and Cellular Biology Program and Associate Director of the Center for Gene Research and Biotechnology. Dr. Hruby specializes in virology and cell biology research, and the use of viral and bacterial vectors to produce recombinant vaccines as well as antiviral development. He is a member of the American Society of Virology, the American Society for Microbiology and a fellow of the American Academy of Microbiology. Dr. Hruby received a Ph.D. in microbiology from the University of Colorado Medical Center and a B.S. in microbiology from Oregon State University. Robin Abrams joined SIGA as General Counsel and Chief Administrative Officer in April 2016. Prior to joining SIGA, Ms. Abrams had a fourteen-year tenure at Purdue Pharma L.P., where she served as Vice President and Associate General Counsel. While at Purdue, Ms. Abrams was Purdue’s primary legal contact with government entities including the Department of Justice, Drug Enforcement Administration and other federal, state and local authorities. Ms. Abrams also served as Purdue’s liaison with congressional committees and caucuses that focused on issues related to Purdue’s products, such as abuse and diversion of opioid pharmaceutical products. Ms. Abrams also oversaw Purdue’s legal regulatory, employment, and government litigation groups. Prior to Purdue, Ms. Abrams served as an Assistant United States Attorney in the Southern District of New York and prior to that, Ms. Abrams clerked for then-Chief Judge Jack B. Weinstein, federal District Court, Eastern District of New York. Ms. Abrams earned her Juris Doctor degree from New York University School of Law, and her Bachelor of Arts degree from Cornell University.
William J. Haynes served as Executive Vice President and General Counsel from June 2012 until his resignation, effective January 5, 2016. Mr. Haynes has held a number of senior positions in the private sector and the U.S. Government, including Chief Corporate Counsel at Chevron Corporation (2008 to 2012), General Counsel of the Department of Defense (2001 to 2008), partner in the national law firm Jenner & Block (1993 to 1996 and 1999 to 2001), Vice President and Associate General Counsel of General Dynamics Corporation (1996 to 1999), and General Counsel of the Department of the Army (1989 to 1993). Mr. Haynes serves as a director of the United States Supreme Court Historical Society, a director of the Greater New York Councils of the Boy Scouts of America, and a member of the Veterans’ Policy Oversight Committee of the American Legion. Mr. Haynes earned his Juris Doctor degree from Harvard Law School, and his Bachelor of Arts degree from Davidson College.
See Director Nominee Information for a biography of Dr. Rose.Gomez. TABLE OF CONTENTS COMPENSATION DISCUSSION AND ANALYSIS The Compensation Committee of the Board of Directors is responsible for reviewing and recommending to the Board of Directors the compensation of our named“named executive officers, ” as such term is defined in Regulation S-K promulgated under the Exchange Act (“Named Executive Officers”), as well as our other key employees. In this regard, the Compensation Committee has the responsibility to establish a compensation policy for officers and key employees designed to (i) attract and retain the best possible executive talent; (ii) tie annual and long-term cash and stock incentives to achievement of measurable corporate and individual performance objectives; and (iii) provide competitive compensation to our officers and key employees to align executives’ incentives with the creation of stockholder value. As a general matter, the compensation policy for officers and key employees has historically included: | · | base salary, which is determined on an annual or semi-annual basis, |
| · | annual or other time-based cash incentive compensation, and |
| · | long-term incentive compensation in the form of equity participation awards. |
included a combination of the following: base salary, which is determined on an annual or semi-annual basis, annual or other time-based cash incentive compensation, and long-term incentive compensation often in the form of equity awards. This section discusses the principles underlying our executive compensation policies, our decisions to datein 2021 and the principles that we expect to use in coming years. On September 16, 2014, the Company filed a voluntary petition for relief under chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), chapter 11 Case Number 14-12623 (SHL). In 2015, the Company operated its business as a “debtor-in-possession” in accordance with the applicable provisions of the Bankruptcy Code. On December 15, 2015, we filed a Plan of Reorganization with the Bankruptcy Court. Subsequent to the initial filing, amendments have been made to the Plan of Reorganization (as amended, the “POR”). The POR, which was confirmed by the Bankruptcy Court and became effective on April 12, 2016, includes new employment agreements for the named executive officers. The compensation provided for in the new employment agreements is consistent with our overall compensation policies as expressed herein. The Compensation Committee has considered factors associated with SIGA’s chapter 11 case, as well as factors associated with the Company’s litigation with PharmAthene, Inc. (“PharmAthene”), in its determinations.
Our Named Executive Officers For 2015,2021, our Named Executive Officers and their titles were: Eric A. Rose, M.D.Phillip L. Gomez, Ph.D. | | | Chief Executive Officer and Chairman of the BoardDirector | Daniel J. Luckshire | | | Executive Vice President, Chief Financial Officer and Corporate Secretary | Dennis E. Hruby, Ph.D. | | | Executive Vice President and Chief Scientific Officer | William J. HaynesRobin E. Abrams* | Executive Vice President and | | General Counsel (resigned,and Chief Administrative Officer |
*
| On March 18, 2022, Ms. Abrams tendered her resignation as the General Counsel and Chief Administrative Officer, which resignation was effective January 5, 2016)April 15, 2022. |
Our Executive Compensation Decision Process Our Compensation Committee reviews and approves the corporate goals and objectives with respect to the compensation for the Company’s executive officers, including the Chief Executive Officer. In its discretion, the Compensation Committee may establish cash or equity incentive programs and otherwise award cash bonuses or equity-based awards to executive officers and key employees. Annual incentive compensation to our executive officers is payable pursuant to contractual provisions with certain executives that provide eligibility to receive discretionary bonuses and equity-based awards at the sole discretion of the Board of Directors. The Board of Directors’ decisions in such matters have been delegated from time to time to the Compensation Committee. In connection with its review of compensation matters for the Company’s executive officers, the Compensation Committee considers the executive’s performance and long-term contribution to achieving the Company’s objectives, economic and business conditions affecting the Company, the financial condition of the Company and reviews information regarding the compensation of similarly situated executives at peer companies. In 2014 and 2015, the Compensation Committee also considered factors associated with the Company’s chapter 11 case, as well as factors associated with the Company’s litigation with PharmAthene, when making its determinations. The Compensation Committee either makes suchcash or/and equity-based awards or makes recommendations to the Board of Directors with respect to the amounts of such awards based on the foregoing criteria. Role of Executive Officers in Setting Compensation Decisions Regarding most compensation matters, the Chief Executive Officer has historically provided recommendations to the Compensation Committee relying on his personal experience with respect to evaluating the contribution of our other executive officers. Dr. Eric A. Rose,Phillip L. Gomez, our Chief Executive Officer, and Chairman of the Board, iswas involved in compensation TABLE OF CONTENTS recommendations for 2021, with input from our Executive Vice President & Chief Financial Officer, Executive Vice President & Chief Scientific Officer and General Counsel & Chief Administrative Officer (and, previously, our Executive Vice President & General Counsel) as it relates to the compensation of other key employees. The Compensation Committee considers, but retains the right to reject or modify, such recommendations. Although the Chief Executive Officer may attend a portion of the meetings of the Compensation Committee, neither he nor any other member of management may be present during executive sessions of the Compensation Committee. Moreover, the Chief Executive Officer may not be present when decisions with respect to his compensation are made. The Compensation Committee has the authority to retain compensation consultants to advise the Compensation Committee as it deems necessary to carry out its duties. In 2015,2021, the Compensation Committee continued to use the services of Compensation Advisory Partners LLC, or CAP, as its independent executive compensation consultant in accordance with its Committee Charter. The Compensation Committee useshas the discretion to use analyses prepared by the consultant as part of its review of SIGA’s executive compensation practices. The consultant reports directly to the Compensation Committee, and the Compensation Committee has the final authority to hire and terminate the consultant. CAP attends meetings of the Compensation Committee aswhen requested, and is available to communicate with the committee chairmanchairperson between meetings; however, the Compensation Committee makes all decisions regarding any compensation matters that are discussed with CAP. At no time has the Compensation Committee directed CAP to perform services in any particular manner or using any particular methodology.CAP does not provide any consulting advice to SIGA outside of the scope of employee and director compensation. During 2015, CAP performed a competitive evaluation of total compensation for executives.In addition to receiving advisory services fromretaining CAP, the Compensation Committee also received advisory services from Weil, Gotshal & Manges LLP with respect to compensation considerations associated withhas considered the Company’s chapter 11 case.
independence factors required under Nasdaq rules. Competitive Market Analysis and Benchmarking In reviewing the compensation of the Chief Executive Officer and other executive officers, the Compensation Committee considers the compensation awarded to executives of similarly situated companies, the Company’s performance, the respective individual’s performance and long-term contribution to achieving the Company’s objectives, compensation given to executives in past years, anticipated changes to future duties and other factors the Compensation Committee deems appropriate. In 2015, theThe peer group for the Company wasis periodically updated in consultation with CAP. The update process took into accountSetting of the peer group reflects a variety of factors, including: the industry specialization of potential peer companies, the number and projected revenue and EBIT of commercial drug products in select geographic markets at potential peer companies, the historical market capitalization of SIGA relative to the market capitalization of potential peer companies, and the historical and expected gross and net cash inflows of SIGA relative to the actual and projected commercial revenue and EBIT of potential peer companies. It was concluded that thisThis group of companies provides appropriate compensation benchmarks because of comparable quantitative and qualitative metrics and because these companies may compete with us for executives and other employees. The group of companies used bywithin the Compensation Committee to assess 2015 executive compensationcurrent peer group includes: Aerie Pharmaceuticals Inc. | | | Omeros Corporation | Biodelivery Sciences International, Inc. | | | Paratek Pharmaceuticals, Inc. | Catalyst Pharmaceuticals, Inc. | | | Rigel Pharmaceuticals, Inc. | Intercept Pharmaceuticals, Inc. | | | Travere Therapeutics, Inc. | Mannkind Corp. | | | Vanda Pharmaceuticals, Inc. |
The group of companies within the prior year peer group included*: Acorda Therapeutics Inc. | | | Omeros Corporation | Aegerion Pharmaceuticals, Inc. | Raptor Pharmaceuticals Corp | Alimera Sciences, Inc. | | | Otonomy, Inc | BioCryst Pharmaceuticals, Inc. | | | Retrophin, Inc. | Dermira, Inc. | | | Spectrum Pharmaceuticals, Inc. | AriadIronwood Pharmaceuticals, Inc.
Corcept Therapeutics Incorporated | Supernus Pharmaceuticals, Inc.
| | Vanda Pharmaceuticals, Inc. | Ironwood Pharmaceuticals, Inc.
Mannkind Corp. | | | |
*
| Vivus, Inc.
Xenoport, Inc.The peer group was updated in 2021 as certain companies no longer met criteria for inclusion. |
TABLE OF CONTENTS The Compensation Committee evaluates, at least once a year, the performance of our executive officers and other key employees in light of goals and objectives established by the Committee. Based upon these evaluations, the Compensation Committee either adjusts the compensation of such personnel as appropriate or recommends to the full Board of Directors any adjustment for such personnel, including any change to base salary, bonus and incentive cash compensation and equity compensation.awards. In its evaluation of the Chief Executive Officer, the Compensation Committee considers overall management of the Company; progress in the performance of strategic, regulatory and commercial activitiesactivities; identification and the development of product candidates; identification and assessment of growth opportunities; and the establishment and maintenance of successful relationships with the Company’s customers, potential customers, various funding and research partners, the Board of Directors, and shareholders. In its evaluation of the Executive Vice President & Chief Financial Officer, the Committee considers the Company’s financial performance, the Chief Financial Officer’s role in achieving our short-term and long-term financial, strategic and operational goals; the Chief Financial Officer’s contribution to the management of the Company; the Chief Financial Officer’s relationship with shareholders and potential investors,investors; the Chief Financial Officer’s efforts with respect to financial regulatory compliance (including compliance with any applicable listing rules, the securities laws and all related regulations) , and the preparation of and compliance with the Company’s budget.budget; and responsiveness in addressing any financial or operational issues as they arise. In its evaluation of the General Counsel, the Committee considers the strategic contribution to the Board of Directors and the management team; the achievement of legal objectives within budgetary requirements; the General Counsel’s role in achieving our short-term and long-term contractual, commercial and strategic goals; and responsiveness in addressing any legal issues as they arise. In its evaluation of the Company’s Executive Vice President & Chief Scientific Officer, the Committee considers achievement of program objectives within budgetary and timeline requirements; the Chief Scientific Officer’s contribution to key short-term and long-term business initiatives; relationships with regulators and current and possible future scientific partners; compliance with contract and grant requirements; and management of the Company’s research and development facility located in Corvallis, Oregon. In 2014 and 2015, forFor all four of our current Named Executive Officers, the executive officers as well as other key employees, the Compensation Committee considered factors associatedconsiders performance in connection with SIGA’s chapter 11 case, as well as factors associated with the Company’s litigation with PharmAthene, when performing its evaluations.government contracts. Our Compensation Philosophy and Program Objectives The overall objectives of the Company’s compensation program are to attract and retain the best possible executive talent, to motivate such executives to achieve the goals inherent in the Company’s business strategy, to maximize the link between executive and stockholder interests and to recognize individual contributions, as well as overall business results. Results taken into account will include both short-term results of the immediately preceding fiscal year and long-term results, which will include recognition of the Company’s performance and achievements likely to contribute to shareholder value creation over a longer period. To achieve these objectives, the Company has developed an overall compensation strategy and specific compensation plans that tie a substantial portion of an executive’s compensation to performance. The Role of Shareholder Advisory Votes on Executive Compensation The Company’s shareholders are provided with an opportunity to cast an advisory vote every three years on the Company’s executive compensation program. At the Company’s annual meeting held in May 2014,June 2020, a majority of the votes cast supported our advisory vote proposal on the Company’s executive compensation program. The Compensation Committee will continue to consider the outcome of our past and future advisory vote proposals.proposals, when making future compensation decisions for the Named Executive Officers. Our Executive Compensation Program The key elements of the Company’s compensation program consist of fixed compensation in the form of base salary, and the discretion to award variable compensation in the forms of incentive cash compensation and equity awards. The Compensation Committee’s policies with respect to each of these elements are discussed below. In addition, while the elements of compensation described below are considered separately, the Compensation Committee takes into account the full compensation package offered by the Company to the individual, including pension benefits, insurance and other benefits, as well as the programs described below. Due to the inability to determine how the Company’s common stock will be impacted by the implementation of the POR, the Company has not granted equity-based incentive compensation during the pendency of the Company’s chapter 11 case. TABLE OF CONTENTS The compensation philosophy of the Company is to maintain executive base salary at a competitive level to enable the Company to attract and retain executives and key talent needed to accomplish the Company’s goals. In determining the appropriate base salary levels and, to a lesser extent, other compensation elements, the Compensation Committee considers the scope of responsibility, prior experience and past accomplishments, and anticipated changes to future job responsibilities, as well as historical practices within the Company. Economic, legal and business conditions affecting the Company are also considered. The Compensation Committee also considers historical levels of salary paid by the Company as well as the provisions in the various executives’ employment contracts with the Company, which contracts are more fully discussed elsewhere in this proxy statement. Periodic adjustments in base salary may be merit-based with respect to individual performance or tied to the Company’s financial condition or specified in executives’ employment agreements or based on other competitive factors. The Compensation Committee takes into account the effect of any transaction outside of the ordinary course of business that has been consummated during the relevant year and, where appropriate, also considers non-financial performance measures. These include the Company’s competitive position, scientific developments and improvements in relations with employees and investors. For each of Dr. Rose,Gomez, Mr. Luckshire, Mr. HaynesMs. Abrams and Dr. Hruby, in 2015, we paid a base salary in 2021 in accordance with theirsuch executive’s employment agreements. Base salary wasagreement. For 2022, the base salaries of these executives were reviewed by our Compensation Committee and Dr. Rose,Gomez, Ms. Abrams, Dr. Hruby, and Dr. HrubyMr. Luckshire each received a 3% salary increase, effective as of January 1, 2022. The salary percentage increase is consistent with percentage increases in January of 2016,prior years and Mr. Luckshire received a 12%percentage increases specified within employment contracts. The percentage increase in January of 2016. The size of the increase wasto base salary is consistent with the salary guidelines applicable to other employees. The base salary levels of these executives reflect our Compensation Committee’s subjective judgment, which took into account each executive’s respective position and tenure, our present needs, the general business environment, the executive’s individual performance, achievements and prior contributions and anticipated performance levels. Annual Incentive Compensation The Compensation Committee, in its discretion, may establish cash incentive programs and otherwise award bonuses to executive officers and key employees. Annual incentive compensation to our executive officers is payable pursuant to contractual provisions with certain executives that provide eligibility to receive bonuses, in the sole discretion of the Board of Directors or Compensation Committee based on the executive’s performance, economic and business conditions affecting the Company, and the financial condition of the Company. The Compensation Committee approves or makes recommendations to the Board of Directors with respect to such amounts. annual incentive compensation. 2021 Performance Year Bonus Program For the 2014 and 2015 performance years, approvals and recommendations of annual incentive compensation took into account factors associated with the Company’s chapter 11 case, as well as factors associated with the Company’s litigation with PharmAthene. Cash incentive payments approved by the Board of Directors, for executive officer performance in 2014 and 2015, were subject to Bankruptcy Court approval and were paid following Bankruptcy Court confirmation of the POR and the POR becoming effective.For the 20152021 performance year, the Board of Directors approved cash bonuses for executive officers based on the recommendation of the Compensation Committee. The Compensation Committee evaluated the performance of executive officers, and set cash bonus amounts, based oneligibility, within the context of the Company’s achievementoverall performance. Performance has been assessed by the Compensation Committee and the Board of pre-established formalDirectors based upon a range of considerations.
Key corporate goals, as established early each year, provide the Compensation Committee and taking into account factors associatedthe Board of Directors with the Company’s chapter 11 case and factors associated with the Company’s litigation with PharmAthene. The performancea measurement guide for executive officer performance. Such goals that were set were objectively measurable; reflectedmeasure progress in the performancecontext of strategic, regulatoryfinancial, commercial and commercial activities; representedregulatory activities that are believed to create enterprise value; and werevalue. These corporate goals are heavily weighted toward activities important in the successful performance of our existing BARDA contracts, the BARDA contract. The pre-establishedaward of new government contracts (domestic and/or international), continued and substantive R&D and regulatory progress in connection with TPOXX, and the building of capabilities that would support long-term growth at the Company. Achievement of these pre-specified corporate goals, in combination with other considerations as contemplated by the Compensation Committee and the Board of Directors, provided executives with an opportunity to earn an annuala cash bonus that is equivalent to annual base salary (“Target Annual Cash Bonus”). TABLE OF CONTENTS A summary of key corporate goals for the pre-established goals2021 performance year is as follows: | · | Deliver a threshold quantity of Tecovirmat courses to the Strategic National Stockpile; this goal constituted 33% weighting toward the Target Annual Cash Bonus. |
| · | Progress a threshold quantity of Tecovirimat drug material to a key point of the supply chain, and maintain manufacturing cost within a specified threshold; these goals constituted 32% weighting toward the Target Annual Cash Bonus. |
| · | Meet key regulatory milestones related to human safety studies and animal efficacy studies; these goals constituted 25% weighting toward the Target Annual Cash Bonus. |
| · | Maintain operating expenses below a specified threshold; this goal constituted 10% weighting toward the Target Annual Cash Bonus. |
Maximize the value of procurement contract opportunities with the U.S. government. Generate international sales growth and make substantial progress during the COVID-19 pandemic toward expanding the international contract portfolio. Advance regulatory filings in Europe and Canada for oral TPOXX and in the U.S. for IV TPOXX, and also make substantial progress with the Post-exposure Prophylaxis (PEP) program. Continue to identify and assess a broad range of growth and asset maximization opportunities for the Company as part of a business development strategy. Effectively manage operations during the COVID-19 pandemic, as well as ensure efficient and compliant operations. For the 20152021 performance year, all pre-establishedthe Compensation Committee determined, based on a range of considerations including the achievement of corporate goals were met. As such,and performance during the COVID-19 pandemic, that Dr. Rose,Gomez, Mr. Luckshire, Mr. HaynesMs. Abrams and Dr. Hruby were eligible for a cash bonus equivalent to thetheir Target Annual Cash Bonus. However, after consideration of factors associated with the Company’s chapter 11 case and factors associated with the Company’s litigation with PharmAthene,Accordingly, based on each individual’s contribution to Company performance (as discussed below), the Compensation Committee recommended to the Board of Directors that each executive be paid a performance cash bonus equivalent to 25% of thetheir Target Annual Cash Bonus. For Dr. Rose,Gomez, the Board of Directors approved a cash bonus of $191,227$844,132 based on the recommendation of the Compensation Committee. In the Compensation Committee’s evaluation of Dr. Rose’sGomez’s contribution to the Company’s performance, the following was considered: Dr. Gomez’s role in the Company’s performance in the context of corporate goals; the overall management of the Company; progress in the performance of strategic, regulatory and commercial activitiesactivities; identification and the development of product candidates; identification and assessment of growth opportunities; the establishment and maintenance of successful relationships with the Company’s customers, potential customers, various funding and research partners, the Board of Directors and shareholders; and Dr. Rose’sGomez’s leadership with respect to the BARDA Contract. The Compensation Committee’s determination of Dr. Rose’s cash bonus was heavily impacted by consideration of factors associated with the Company’s chapter 11 casegovernment procurement and factors associated with the Company’s litigation with PharmAthene.development contracts and business development initiatives. For Mr. Luckshire, the Board of Directors approved a cash bonus of $112,551$655,636 based on the recommendation of the Compensation Committee. In the Compensation Committee’s evaluation of Mr. Luckshire’s contribution to the Company’s performance, the following was considered: Mr. Luckshire’s role in achieving the Company’s financial, strategic and operationalperformance in the context of corporate goals; Mr. Luckshire’s contribution to the management of the Company; Mr. Luckshire’s relationships with shareholders and potential investors; Mr. Luckshire’s efforts with respect to financial regulatory compliance (including compliance with any applicable listing rules, securities laws and all related regulations), and the preparation of and compliance with the Company’s budget; Mr. Luckshire’s responsiveness in addressing any timely financial or operational developments as they arose; and Mr. Luckshire’s substantive role in managing the BARDA Contract. The Compensation Committee’s determinationperformance of Mr. Luckshire’s cash bonus was heavily impacted by consideration of factors associated with the Company’s chapter 11 case and factors associated with the Company’s litigation with PharmAthene.government procurement contracts. For Mr. Haynes,Ms. Abrams, the Board of Directors approved a cash bonus of $122,932$619,544 based on the recommendation of the Compensation Committee. In the Compensation Committee’s evaluation of Mr. Haynes’Ms. Abrams’ contribution to the Company’s performance, the following was considered: Mr. HaynesMs. Abrams’s role in the Company’s performance in the context of corporate goals; Ms. Abrams’ strategic contribution to the Board of Directors and the management team; the achievement of legal objectives within budgetary requirements; and Mr. Haynes’Ms. Abrams responsiveness in addressing any legal developments as they arose. Ms. Abrams also played a pivotal role in achieving our contractual, commercial and strategic goals. The Compensation Committee’s determination of Mr. Haynes cash bonus was heavily impacted by consideration of factors associated withmaintaining the Company’s chapter 11 caseERM program with input from senior management and factors associated withsubject matter experts as appropriate, and making periodic reports on same to the Company’s litigation with PharmAthene.Board of Directors. For Dr. Hruby, the Board of Directors approved a cash bonus of $136,591$652,388 based on the recommendation of the Compensation Committee. In the Compensation Committee’s evaluation of Dr. Hruby’s contribution to the Company’s performance, the following was considered: Dr. Hruby’s role in the Company’s performance in the context of corporate goals; Dr. Hruby’s achievement of development program objectives within budgetary requirements; Dr. Hruby’s contribution to key business initiatives; Dr. Hruby’s relationships with regulators and current and possible future scientific partners; compliance with grant requirements andgovernment contract requirements; Dr. Hruby’s management of the Company’s research and development facility located in Corvallis, Oregon; and Dr. Hruby’s substantial role in managing the BARDA Contract. The Compensation Committee’s determinationperformance of Dr. Hruby’s cash bonus was heavily impacted by consideration of factors associateddevelopment and procurement contracts with the Company’s chapter 11 case and factors associated with the Company’s litigation with PharmAthene.U.S. government. TABLE OF CONTENTS The cash bonuses for Dr. Rose,Gomez, Mr. Luckshire, Mr. HaynesMs. Abrams and Dr. Hruby were subject to Bankruptcy Court approval and were paid following Bankruptcy Court confirmation of the POR and the POR becoming effective.in March 2022. We believe that our annual incentive bonus program can motivatemotivates and encourage our executives to fulfill or exceed our objectives and provide us with the opportunity to recognize superior individual performance. Long-Term Equity Incentive Awards The Compensation Committee believes that granting equity-based incentives can provide officers and employees with a strong economic interest in maximizing stock price appreciation over the long term. The Committee also believes that the practice of granting equity-based incentives can be useful in retaining and recruiting the key talent necessary to ensure the Company’s continued success. This element of compensation is governed by the Company’s 2010 Stock Incentive Plan (the “2010 Plan”) which provides for grants of incentive stock options (“ISOs”); nonqualified stock options; stock appreciation rights (“SARs”); restricted stock units (“RSUs”); and shares of restricted and unrestricted stock to our executives, directors and employees. The 2010 Plan is administered by our Compensation Committee, which reviews management’s recommendations concerning persons to be granted awards, and determines the number of and type of equity-based awards to be granted to each such person, and the terms and conditions of any grant as permitted under the 2010 Plan. In determining whether to grant a share-based award to a Named Executive Officer and if so, in assessing the size of a share-based award, to a named executive officer, the Compensation Committee considers not only competitive market factors, changes in responsibility, prior year compensation and the executive officer’s performance, but also the number, term and vesting of stock-based awards previously granted to the officer. The Compensation Committee may also consider the total compensation package or changes made thereto, when determining whether to make a stock-based award. Additionally, in 2014 and 2015, the Compensation Committee considered factors associated with SIGA’s chapter 11 case and factors associated with the Company’s litigation with PharmAthene. The number of shares granted to each named executive officera Named Executive Officer, and whether shares are granted, is determined by the Compensation Committee based on its consideration of the named executive officer’snature of the Named Executive Officer’s individual responsibilities and ability to significantly enhance key company initiatives.short and long-term contributions. In connection with its review of compensation matters for the Company’s executive officers, the Compensation Committee also reviews information regarding the overall compensation, including stock-based awards, of similarly situated executives at peer companies. The Compensation Committee makes recommendationsIn 2021, there were no share-based awards to the Board of Directors with respect to such awards based on the foregoing facts.As a consequence of the Company’s chapter 11 case and the inability to determine how the Company’s common stock will be impacted by the implementation of the POR , the granting of equity-based incentive compensation for 2015 was not recommended by the Compensation Committee.
Named Executive Officers. Additional Benefits and Perquisites Our officers and key employees are entitled to participate in the benefit plans which are generally available to all employees, including health, dental, life, and accidental disability. For each of these benefit plans, the Company makes contributions to the premiums paid to the plans. The Company also offers a 401(k) defined contribution plan, but it makes no contribution to the 401(k) plan. In each case, we provide these benefits to our executive officers on the same basis as our other employees. Severance and Change of Control Agreements We also provide some of our executive officers with severance and change of control arrangements in their employment contracts. We believe that severance and change of control packages are a common characteristic of compensation for key executive officers. They are intended to provide our executive officers with a sense of security in making the commitment to dedicate their professional careers to our success. Due to our size relative to other public companies and our operating history, we believe that severance and change of control arrangements are necessary to help us attract and retain necessary skilled and qualified executive officers to continue to grow our business. During the pendency of the Company’s chapter 11 case, the Company was subject to certain restrictionsDetails with respect to our severance and change of control arrangements with our executive officers are set forth below under the paymentheading “Potential Payments upon Termination or Change of severance to its executive officers.Control.” Our Compensation Policies Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act, now limits the deductibility of compensation over $1 million in any year paid to the Chief Executive Officer, and the other Named Executive Officers (other than the Chief Financial Officer).Officer and any of the three highest paid other executive officers. The Compensation Committee takes into account the deductibility of compensation in determining Named Executive Officer compensation. However, the Compensation Committee retains its discretion to authorize compensation payments that do not qualify for the exemptions in Section 162(m) when the Compensation Committee believes that such payments are appropriate. TABLE OF CONTENTS Common Stock Ownership Requirements While we have not adopted a formal written policy on common stock ownership requirements, part of our compensation philosophy involves common stock ownership by our executive officers because we believe that it helps to align their financial interests with those of our stockholders. We Hedging Policy Pursuant to the Company’s securities trading policy, directors and officers (as well as all other employees) of the Company are prohibited from engaging in “hedging” transactions, such as prepaid variable forwards, equity swaps, collars and exchange funds unless pre-cleared by the Company’s general counsel, and are also recognize, onprohibited from short-selling Company securities (i.e., selling Company securities that the officer, other hand,employee or director does not own in the expectation that our executive officers cannot acquire more than 10% of our common stock without triggering adverse tax consequences. In addition, we expect our executive officersthe price will decline), in a manner which is contrary to abide by the provisions of our Policy on Confidential Information and Insider Trading.Section 16(c) of the Exchange Act, regardless of whether Section 16(c) applies to such person. Our Compensation Committee has the authority to issue equity awards under our incentive plan. The Compensation Committee strives to ensure that any award is made in such a manner to avoid even the appearance of manipulation because of its award date. Due to the inability to determine how the Company’s common stock will be impacted by the implementation of the POR, the Compensation Committee did not recommend the grant of equity-based incentive compensation during the pendency of the Company’s chapter 11 case. With the POR now effective, the Compensation Committee may resume consideration of equity awards to our executive officers and key employees in the future.Although we have not adopted a formal written policy, it is our Board of Directors’ informal policy that the Compensation Committee will, to the extent permitted by governing law, have the sole and absolute authority and discretion in consultation with the Board of Directors, to make retroactive adjustments to any cash or equity based incentive payments to executive officers where the payment was based upon the achievement of certain financial results that were subsequently the subject of a restatement, without regard to misconduct being involved. If the Compensation Committee chose to exercise this discretion, we would seek to recover any amount determined to have been improperly paid to the executive officer. TABLE OF CONTENTS COMPENSATION COMMITTEE REPORT The Compensation Committee, comprised of independent directors, has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on the review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. | | | Respectfully submitted by the
Compensation Committee, | | | | | | | | Julie M. Kane, Chairperson | | | | James J. Antal | | | | Julian Nemirovsky |
TABLE OF CONTENTS Summary Compensation Table The following table sets forth the total compensation of the Company’s Named Executive Officers for the last three fiscal years ended December 31, 2015: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | | Year | | | | Salary ($) | | | | Bonus ($) (1) | | | | Stock Awards ($) (2) | | | | Option Awards ($) | | | | Non-Equity Incentive Plan Compensation ($) | | | | All Other Compensation ($) | | | | Total ($) | | Eric A. Rose, M.D. | | | 2015 | | | | 764,909 | | | | — | (3) | | | — | | | | — | | | | — | | | | — | | | | 764,906 | | Chief Executive Officer | | | 2014 | | | | 743,130 | | | | — | (4) | | | 670,000 | | | | — | | | | — | | | | — | | | | 1,413,126 | | | | | 2013 | | | | 721,000 | | | | 360,500 | | | | 564,000 | | | | — | | | | — | | | | 500 | | | | 1,646,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Daniel J. Luckshire | | | 2015 | | | | 450,204 | | | | — | (3) | | | — | | | | — | | | | — | | | | — | | | | 450,201 | | Executive Vice President & | | | 2014 | | | | 437,091 | | | | — | (4) | | | 335,000 | | | | — | | | | — | | | | — | | | | 772,087 | | Chief Financial Officer | | | 2012 | | | | 424,360 | | | | 212,180 | | | | 282,000 | | | | — | | | | — | | | | — | | | | 918,540 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | William J. Haynes | | | 2015 | | | | 491,727 | | | | — | (3) | | | — | | | | — | | | | — | | | | — | | | | 491,724 | | Executive Vice President & | | | 2014 | | | | 477,405 | | | | — | (4) | | | 251,250 | | | | — | | | | — | | | | — | | | | 728,651 | | General Counsel | | | 2013 | | | | 450,000 | | | | 225,000 | | | | 211,500 | | | | — | | | | — | | | | — | | | | 886,500 | | (Resigned, effective | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | January 5, 2016) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dennis E. Hruby, Ph.D. | | | 2015 | | | | 546,364 | | | | — | (3) | | | — | | | | — | | | | — | | | | — | | | | 546,361 | | Vice President & Chief | | | 2014 | | | | 530,450 | | | | — | (4) | | | 251,250 | | | | — | | | | — | | | | — | | | | 781,696 | | Scientific Officer | | | 2013 | | | | 515,000 | | | | 257,500 | | | | 211,500 | | | | — | | | | — | | | | — | | | | 984,000 | |
2021:Phillip L. Gomez, Ph.D.
Chief Executive Officer
| | | 2021 | | | 844,132 | | | 844,132 | | | — | | | — | | | — | | | — | | | 1,688,264 | | 2020 | | | 819,545 | | | 819,545 | | | — | | | — | | | — | | | — | | | 1,639,090 | | 2019 | | | 795,675 | | | 795,675 | | | — | | | — | | | — | | | — | | | 1,591,350 | Daniel J. Luckshire
Executive Vice President & Chief Financial Officer
| | | 2021 | | | 655,636 | | | 655,636 | | | — | | | — | | | — | | | — | | | 1,311,272 | | 2020 | | | 636,540 | | | 636,540 | | | — | | | — | | | — | | | — | | | 1,273,080 | | 2019 | | | 618,000 | | | 618,000 | | | 448,000(3) | | | — | | | — | | | — | | | 1,684,000 | Dennis E. Hruby, Ph.D.
Vice President & Chief Scientific Officer
| | | 2021 | | | 652,388 | | | 652,388 | | | — | | | — | | | — | | | — | | | 1,304,776 | | 2020 | | | 633,386 | | | 633,386 | | | — | | | — | | | 200,000(4) | | | — | | | 1,466,772 | | 2019 | | | 614,938 | | | 614,938 | | | — | | | — | | | 200,000(4) | | | — | | | 1,429,876 | Robin E. Abrams(5)
General Counsel and Chief Administrative Officer
| | | 2021 | | | 619,544 | | | 619,544 | | | — | | | — | | | — | | | — | | | 1,239,088 | | 2020 | | | 551,499 | | | 551,499 | | | — | | | — | | | — | | | — | | | 1,102,998 | | 2019 | | | 535,436 | | | 535,436 | | | 448,000(3) | | | — | | | — | | | — | | | 1,518,872 |
| (1)
| Bonuses are shown in the year in which they were accrued and earned. |
| (2)
| Stock options, stock appreciation rights and stock awards represent the aggregate grant date fair value calculated in accordance with the authoritative accounting literature. The award granted in January 2014 relates to 2013 performance. |
(3)
| (3) | A cash bonusRepresents grant date fair value of $191,227, $112,551, $122,932stock and $136,591 was approved byRSUs awarded. Ms. Abrams and Mr. Luckshire. Each were awarded 26,666 shares and 53,334 RSUs on July 31, 2019 in recognition of Ms. Abrams’ and Mr. Luckshire’s individual contributions to the Boardsuccessful completion of Directors in March 2016 for Dr. Rose, Mr. Luckshire, Mr. Haynes and Dr. Hruby, respectively. The cash bonus awards were subject to Bankruptcy Court approval and were paid following Bankruptcy Court confirmation of the POR and the POR becoming effective.key initiatives. |
(4)
| (4) | ARepresents a cash milestone bonus of $185,658, $109,273, $119,351,$200,000 under an addendum to Dr. Hruby’s amended and $265,225 was approved by the Board of Directors in December 2014 for Dr. Rose, Mr. Luckshire, Mr. Haynes andrestated employment agreement on August 10, 2018 pursuant to which Dr. Hruby respectively. The cash bonus awards werebecame eligible for two potential milestone bonuses of $200,000 each, subject to Bankruptcy Court approvalcontinued employment as the Company’s Chief Scientific Officer. |
(5)
| On March 18, 2022, Ms. Abrams tendered her resignation as the General Counsel and were paid following Bankruptcy Court confirmation of the POR and the POR becoming effective.Chief Administrative Officer, which resignation was effective April 15, 2022. |
Grants of Plan - Based
Equity Awards Prior to the commencement of the Company’s chapter 11 case, the Compensation Committee determined that it was in the best interest of the Company to issue equity-based
No plan-based awards to motivate the aforementioned executive officers to contribute to our growth and to continue their service to the Company. The amount and type of these equity-based awardswere granted to any Named Executive Officer in 2021. Outstanding Equity Awards at Fiscal Year End There are no unexercised options and equity incentive plan awards for each named executive officer were determined by the Committee based on its considerationNamed Executive Officer as of the named executive officer’s individual responsibilities and ability to significantly enhance key company initiatives. As a consequence of the Company’s chapter 11 case and the inability to determine how the Company’s common stock will be impacted by the implementation of the POR, the granting of equity-based incentive compensation for 2015 was not recommended by the Compensation Committee.December 31, 2021. We hadcurrently have employment agreements with Dr. Rose, Mr. Luckshire, Mr. Haynes and Dr. Hruby that continued in effect until the effective date of the POR. Upon the effective date of the POR (April 12, 2016, hereafter referred to as “Effective Date of the POR”), new employment agreements (attached as exhibits to the POR) for Dr. Rose,Gomez, Mr. Luckshire and Dr. Hruby, and a separationwe previously were party to an employment agreement for Mr. Haynes, became effective, each as described below.Eric A. Rosewith Ms. Abrams.
Phillip L. Gomez – Chief Executive Officer
On January 31, 2007,October 13, 2016, we entered into an employment agreement with Eric A. Rose, M.D., pursuant to which he becameDr. Phillip L. Gomez, our Chief Executive Officer, effective as of March 1, 2007.Officer. Pursuant to the employment agreement, Dr. Rose was paid an annual base salary of $400,000. Moreover, Dr. Rose was eligible to receive a bonus payment (in either cash or stock options) as determined by the Board of Directors in its sole discretion. On January 13, 2012, Dr. Rose’s existing employment agreement was amended. Pursuant to the amended employment agreement, we agreed to pay to Dr. RoseGomez an annual base salary of $700,000, subject to any cost of living adjustments as may be approved by our Board of Directors. Under the terms of this employment agreement, Dr. Rose was also eligible to receive an annual cash bonus, the target of which was $350,000, as determined by the Board of Directors in its sole discretion. Dr. Rose’s base salary was adjusted to $787,856 effective January 1, 2016.Pursuant to the amended and restated employment agreement that became effective on the Effective Date of the POR (the “Post-Plan Rose Agreement”), we have agreed to pay to Dr. Rose an annual base salary of $787,856,$750,000, subject to an automatic increase of three percent (3%) above the amount of his base salary in effect at the end of the prior calendar year, beginning with January 1, 20172018 and ending on the third (3rd) anniversary of the occurrence of a Change of Control (defined below).Control. The Compensation CommitteeBoard of Directors may increase Dr. Rose’sGomez’s base salary by additional discretionary amounts but any such additional discretionary amounts shall be disregarded when calculating the amount of any automatic increase in Dr. Rose’sGomez’s base salary; provided that, no such additional discretionarysalary. On January 1, 2022, Dr. Gomez’s base salary was adjusted to $869,456 pursuant to an annual increase shall be implemented withoutapproved by the prior written consentBoard of PharmAthene prior to the date our covenants under the POR terminateDirectors. Starting in accordance with the POR (the “Plan Covenant Termination Date”). Under the terms of the Post-Plan Rose Agreement,2018 and thereafter, Dr. Rose is alsoGomez has been eligible to receive an annual cash bonus, the target of which is 100% of his base salary. In the
TABLE OF CONTENTS event of a Change of Control of the Company, Dr. RoseGomez shall receive an annual cash bonus for the year in which the Change of Control occurs equal to the greater of (i) the target annual bonus for such year or (ii) the annual bonus determined based upon the applicable performance criteria and goals for such year, provided that Dr. RoseGomez remains employed on the last day of such calendar year. The term of his employment, pursuant to the Post-Plan Rose Agreement, expiresemployment agreement, expired at the end of the one (1)two (2) year anniversary from when the agreement becomesbecame effective and will automatically renewrenews for additional one (1) year periods unless notice of non-renewal is given; provided, however, that the agreement shall not automatically renew upon the expiration of any subsequent term that ends following the third (3rd) anniversary of the occurrence of a Change of Control. Details with respect to our severance obligations to Dr. RoseGomez are set forth below under the heading “Potential Payments upon Termination or Change of Control.”
Daniel J. Luckshire – Executive Vice President & Chief Financial Officer
On February 10, 2011, we entered into an employment agreement with Mr. Daniel J. Luckshire, our Executive Vice President & Chief Financial Officer. Pursuant to the employment agreement, we agreed to pay Mr. Luckshire: an annual base salary of $400,000, subject to any cost of living or merit increases as may be approved by our Board of Directors, an annual cash bonus, the target of which was 50% of the base salary, as determined by the Compensation Committee in its sole discretion, and an annual stock bonus, the target of which was $300,000 in restricted shares of Common Stock, as determined by the Compensation Committee in its sole discretion. Mr. Luckshire’s base salary was adjusted to $506,480 effective January 1, 2016.
Pursuant to the amended and restated employment agreement (the “Post-Plan Luckshire Agreement”) that became effective on the Effective DateApril 12, 2016 (the effective date of the POR (the “Post-Plan Luckshire Agreement”Plan of Reorganization filed with the Bankruptcy Court for the Southern District of New York in connection with the Company’s then-pending chapter 11 case (as amended the “POR”)), we have agreed to pay to Mr. Luckshire an annual base salary of $506,480, subject to an automatic increase of three percent (3%) above the amount of his base salary in effect at the end of the prior calendar year, beginning with January 1, 2017 and ending onyear. The automatic increase terminates upon the third (3rd) anniversary of the occurrence of a Change of Control. The Compensation Committee may increase Mr. Luckshire’s base salary by additional discretionary amounts but any such additional discretionary amounts shall be disregarded when calculating the amount of any automatic increase in Mr. Luckshire’s base salary; provided that, no such additional discretionarysalary. Effective January 1, 2018, Mr. Luckshire’s base salary was adjusted to $600,000 pursuant to review and approval by the Compensation Committee. On January 1, 2022, Mr. Luckshire’s base salary was adjusted to $675,305 pursuant to an annual increase shall be implemented prior toapproved by the Plan Covenant Termination Date without the prior written consentBoard of PharmAthene.Directors. Under the terms of the Post-Plan Luckshire Agreement, Mr. Luckshire is also eligible to receive an annual cash bonus, the target of which is 100% of his base salary. In the event of a Change of Control of the Company, Mr. Luckshire shall receive an annual cash bonus for the year in which the Change of Control occurs equal to the greater of (i) the target annual bonus for such year or (ii) the annual bonus determined based upon the applicable performance criteria and goals for such year, provided that Mr. Luckshire remains employed on the last day of such calendar year. The term of his employment, pursuant to the Post-Plan Luckshire Agreement, expiresexpired at the end of the two (2) year anniversary from when the agreement becomesbecame effective and will automatically renewrenews for additional one (1) year periods unless notice of non-renewal is given; provided, however, that the agreement shall not automatically renew upon the expiration of any subsequent term that ends following the third (3rd) anniversary of the occurrence of a Change of Control. Details with respect to our severance obligations to Mr. Luckshire are set forth below under the heading “Potential Payments upon Termination or Change of Control.”
Dennis E. Hruby – Vice President & Chief Scientific Officer
On January 22, 2007, we entered into an employment agreement with Dr. Dennis E. Hruby, our Vice President and Chief Scientific Officer, which agreement was most recently amended on December 21, 2011. Pursuant to this employment agreement, Dr. Hruby’s base salary was set at an annual amount of $500,000, subject to any cost of living adjustments as may be approved by the Board of Directors, and an annual cash bonus, the target of which was $250,000, as determined by the Board of Directors in its sole discretion. Dr. Hruby’s base salary was adjusted to $562,755 effective January 1, 2016.
In a prior period, Dr. Hruby was eligible for a one-time additional bonus equal to $350,000 of which $100,000 was paid in 2011. The remainder of the one-time bonus was to be paid upon the earlier of: (i) approval by FDA of a New Drug Application for Tecovirimat, also known as ST-246, for a smallpox or orthopox treatment indication consistent with the contract line items in the BARDA Contract; (ii) approval of a Marketing Authorization Application by the European Medicines Agency for Tecovirimat for a smallpox or orthopox treatment indication; or (iii) approval by FDA of an Emergency Use Authorization, or a similar designation such as a contingency Investigational New Drug (“IND”), that would permit use of ST-246 for the treatment of smallpox or another orthopox virus disease in case of a public health emergency. In late 2012, in advance of the first delivery of Tecovirimat, the Company obtained a contingency IND. The remaining $250,000 portion of such one-time $350,000 bonus was paid in 2013.
Pursuant to the amended and restated employment agreement (the “Post-Plan Hruby Agreement”) that became effective on the Effective DateApril 12, 2016 (the effective date of thePOR (the “Post-Plan Hruby Agreement”) POR), we have agreed to pay to Dr. Hruby an annual base salary of $562,755, subject to an automatic increase of three percent (3%) above the amount of his base salary in effect at the end of the prior calendar year, beginningyear. In recognition of Dr. Hruby’s contribution to FDA approval of oral TPOXX for the treatment of smallpox and in consideration of Dr. Hruby’s role in ongoing development initiatives for TPOXX, the Company and Dr. Hruby entered into an addendum to Dr. Hruby’s amended and restated employment agreement on August 10, 2018 pursuant to which Dr. Hruby became eligible for two potential milestone bonuses of $200,000 each. The first bonus was earned when Dr. Hruby was still employed with the Company and performing the functions of Chief Scientific Officer substantially in accordance with current job responsibilities as of December 31, 2019 and the second bonus was earned when Dr. Hruby was still employed by the Company and performing the functions of Chief Scientific Officer as noted above as of December 31, 2020. SIGA would not have paid any prorated share of any milestone bonus if Dr. Hruby’s employment with the Company ended before either milestone bonus was earned. On January 1, 2017 and ending on2022, Dr. Hruby’s base salary was adjusted to $671,960 pursuant to an annual increase approved by the Board of Directors. The automatic increase terminates upon the third (3rd) anniversary of the occurrence of a Change of Control. The Compensation Committee may increase Dr. Hruby’s base salary by additional discretionary amounts but any such additional discretionary amounts shall be disregarded when calculating the amount of any TABLE OF CONTENTS automatic increase in Dr. Hruby’s base salary; provided that, no such additional discretionary increase shall be implemented prior to the Plan Covenant Termination Date without the prior written consent of PharmAthene.salary. Under the terms of the Post-Plan Hruby Agreement, Dr. Hruby is also eligible to receive an annual cash bonus (separate from the milestone bonuses described above), the target of which is 100% of his base salary. In the event of a Change of Control of the Company, Dr. Hruby shall receive an annual cash bonus for the year in which the Change of Control occurs equal to the greater of (i) the target annual bonus for such year or (ii) the annual bonus determined based upon the applicable performance criteria and goals for such year, provided that Dr. Hruby remains employed on the last day of such calendar year. The term of his employment, pursuant to the Post-Plan Hruby Agreement, expiresexpired at the end of the two (2) year anniversary from when the agreement becomesbecame effective and will automatically renewrenews for additional one (1) year periods unless notice of non-renewal is given; provided, however, that the agreement shall not automatically renew upon the expiration of any subsequent term that ends following the third (3rd) anniversary of the occurrence of a Change of Control. Details with respect to our severance obligations to Dr. Hruby are set forth below under the heading “Potential Payments upon Termination or Change of Control.”
Robin E. Abrams – General Counsel & Chief Administrative Officer
Pursuant to the employment agreement that became effective on April 12, 2016, we have agreed to pay to
On March 18, 2022, Ms. Abrams an annual base salary of $700,000, subject to an automatic increase of three percent (3%) abovetendered her resignation as the amount of her base salary in effect at the end of the prior calendar year, beginningGeneral Counsel and Chief Administrative Officer, which resignation was effective April 15, 2022. In accordance with January 1, 2017 and ending on the third (3rd) anniversary of the occurrence of a Change of Control. The Compensation Committee may increase Ms. Abrams’ base salary by additional discretionary amounts but any such additional discretionary amounts shall be disregarded when calculating the amount of any automatic increase in Ms. Abrams’ base salary; provided that, no such additional discretionary increase shall be implemented prior to the Plan Covenant Termination Date without the prior written consent of PharmAthene. Under the terms of the employment agreement, Ms. Abrams is also eligible to receive an annual cash bonus, the target of which is 100% of her base salary. In the event of a Change of Control of the Company, Ms. Abrams shall receive an annual cash bonus for the year in which the Change of Control occurs equal to the greater of (i) the target annual bonus for such year or (ii) the annual bonus determined based upon the applicable performance criteria and goals for such year, provided that Ms. Abrams remains employed on the last day of such calendar year. The term of her employment, pursuant to the employment agreement, expires at the end of the two (2) year anniversary from when the agreement becomes effective and will automatically renew for additional one (1) year periods unless notice of non-renewal is given; provided, however, that the agreement shall not automatically renew upon the expiration of any subsequent term that ends following the third (3rd) anniversary of the occurrence of a Change of Control.DetailsSEC rules, details with respect to our severance obligations to Ms. Abrams upon certain hypothetical terminations of employment are set forth below under the heading “Potential Payments upon Termination or Change of Control.Control;”
William J. Haynes, Executive Vice President & General Counsel (resigned effective January 5, 2016)
On June 4, 2012, we entered into an employment agreement with Mr. William J. Haynes, our former Executive Vice President & General Counsel. Pursuant Due to the employment agreement, we agreedher resignation, Ms. Abrams will not be entitled to pay Mr. Haynes: an annual base salary of $450,000, subject to any cost of living or merit increases as may be approved by our Board of Directors, an annual cash bonus, the target of which was 50% of the base salary, as determined by the Compensation Committee in its sole discretion,such severance payments and an annual equity bonus, the target value of which was 50% of the base salary, as determined by the Compensation Committee in its sole discretion.
On January 5, 2016 we entered into a separation agreement (the “Separation Agreement”) with Mr. Haynes in connection with his resignation as the Company’s Executive Vice President and General Counsel. The effectiveness of the Separation Agreement was conditioned upon the effectiveness of the POR.
Details with respect to our severance obligations to Mr. Haynes, including amounts payable under the Separation Agreement, are set forth below under the heading “Potential Payments upon Termination or Change of Control.”
Outstanding Equity Awards at Fiscal Year End
The following table provides certain summary information concerning unexercised options and equity incentive plan awards for each Named Executive Officer as of December 31, 2015:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | | Option Exercise Price ($) | | | | Option Expiration Date | | | | Number of Shares or Units of Stock That Have Not Vested | | | | Market Value of Shares or Units of Stock That Have Not Vested (#) (9) | | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Eric A. Rose, M.D. | | | 10,000 | | | | — | | | | — | | | | 2.72 | | | | 12/19/2016 | | | | | | | | | | | | | | | | | | | | | 200,000 | | | | — | | | | — | | | | 3.10 | | | | 7/26/2017 | | | | | | | | | | | | | | | | | | | | | 300,000 | | | | — | | | | 100,000 | (1) | | | 2.49 | | | | 11/14/2018 | | | | | | | | | | | | | | | | | | | | | 465,000 | (2) | | | — | | | | — | | | | 3.53 | | | | 2/2/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 66,667 | (7) | | | 28,000 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | 133,334 | (8) | | | 56,000 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Daniel J. Luckshire | | | 60,000 | | | | — | | | | — | | | | 11.04 | | | | 2/10/2021 | | | | | | | | | | | | | | | | | | | | | 60,000 | | | | — | | | | — | | | | 13.04 | | | | 2/10/2021 | | | | | | | | | | | | | | | | | | | | | 132,000 | (3) | | | — | | | | — | | | | 3.53 | | | | 2/2/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 33,334 | (7) | | | 14,000 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | 66,667 | (8) | | | 28,000 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | William J. Haynes | | | 100,000 | | | | — | | | | — | | | | 2.37 | | | | 6/4/2022 | | | | | | | | | | | | | | | | | | | | | — | | | | — | | | | — | | | | — | | | | | | | | 25,000 | (7) | | | 10,500 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | (8) | | | 21,000 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dennis E. Hruby, Ph.D. | | | 200,000 | | | | — | | | | 100,000 | (4) | | | 3.10 | | | | 7/26/2017 | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | — | | | | — | | | | 4.70 | | | | 3/5/2019 | | | | | | | | | | | | | | | | | | | | | 337,500 | (5) | | | — | | | | — | | | | 3.53 | | | | 2/2/2019 | | | | | | | | | | | | | | | | | | | | | 37,500 | (6) | | | — | | | | — | | | | 3.53 | | | | 2/2/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,000 | (7) | | | 10,500 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | (8) | | | 21,000 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Stock option awards were granted to the Named Officer on November 14, 2008 and are eligible to vest upon the Company’s achievement of certain regulatory milestones. The performance conditions were not satisfied as of December 31, 2015. |
| (2) | Stock-settled stock appreciation rights were granted to the Named Executive Officer on February 2, 2012 and vest one-third per year over a three-year term. The appreciation of this right is capped at $4.50 and limits the potential shares that could be granted to 100,233. |
| (3) | Stock-settled stock appreciation rights were granted to the Named Executive Officer on February 2, 2012 and vests one-third per year over a three-year term. The appreciation of each right is capped at $11.00 and limits the potential shares that could be granted to 89,640. |
| (4) | Stock option awards were granted to the Named Executive Officer on July 26, 2007 and are eligible to vest upon the Company’s achievement of certain regulatory milestones. The performance conditions were not satisfied as of December 31, 2015. |
| (5) | Stock-settled stock appreciation rights were granted to the Named Executive Officer on February 2, 2012 and vest one-third per year over a three-year term. The appreciation of each right is capped at $4.50 and limits the potential shares that could be granted to 72,750. |
| (6) | Stock-settled stock appreciation rights were granted to the Named Executive Officer on February 2, 2012 and vest one-third per year over a three-year term. The appreciation of each right is capped at $7.00 and limits the potential shares that could be granted to 18,589. |
| (7) | Stock awards were granted to the Named Executive Officers on January 3, 2013 and vest one-third per year over a three-year term. |
| (8) | Stock awards were granted to the Named Executive Officers on January 3, 2014 and vest one-third per year over a three-year term. |
| (9) | The market value reflects the closing price per share of the Company’s common stock on the OTC Market on December 31, 2015. |
benefits. Option Exercises and Stock Vested The following table sets forth any exercises of stock options and the vesting of restricted stock units for each of the Named Executive Officers for the year ended December 31, 2015: | | Options Awards | | Stock Awards | | Name | | | Number of Shares Acquired on Exercise (#) | | | | Value Realized on Exercise ($) | | | | Number of Shares Acquired on Vesting (#) | | | | Value Realized on Vesting ($) (1) | | | | | | | | | | | | | | | | | | | Eric A. Rose | | | — | | | | — | | | | 200,000 | | | | 338,000 | | | | | | | | | | | | | | | | | | | Daniel J. Luckshire | | | — | | | | — | | | | 78,332 | | | | 119,817 | | | | | | | | | | | | | | | | | | | William J. Haynes | | | — | | | | — | | | | 50,000 | | | | 70,000 | | | | | | | | | | | | | | | | | | | Dennis E. Hruby | | | — | | | | — | | | | 75,000 | | | | 126,750 | |
2021:Phillip L. Gomez, Ph.D. | | | — | | | — | | | — | | | — | Daniel J. Luckshire | | | — | | | — | | | 26,667(2) | | | 169,869 | Dennis E. Hruby, Ph.D. | | | — | | | — | | | — | | | — | Robin E. Abrams | | | — | | | — | | | 26,667(3) | | | 169,869 |
(1)
| Amounts reflect the aggregate amount realized upon vestingrelease of shares, based on the number of shares of stock vested at the market price of the underlying shares on the vestingrelease date. |
(2)
| This amount does not reflect the net settlement to satisfy tax withholding obligations. The net number of shares issued to Mr. Luckshire was 12,765. |
(3)
| This amount does not reflect the net settlement to satisfy tax withholding obligations. The net number of shares issued to Ms. Abrams was 15,366. |
Potential Payments upon Termination or Change of Control As a result of the Company’s chapter 11 case, there are certain restrictions on severance benefits payable to the Company’s executive officers if they are severed during the pendency of the chapter 11 case. The following does not take into account such restrictions.
Severance Arrangement for Eric A. RosePhillip L. Gomez The following table and footnotes describe and quantify the potential payments to Dr. RoseGomez pursuant to his employment agreement upon termination, or change of control pursuant toor in the Post-Plan Rose Agreement,event that his contract is not renewed, assuming that such termination, or change of control or non-renewal was effective as of December 31, 2015: | | | | | | | | | | | | | | | | Termination by the Company without cause (or by the officer for good cause) | | | | Termination upon death or disability | | | | Termination by the Company due to a change in control | | | | | | | | | | | | | | | Aggregate monthly cash payments | | $ | 764,909 | | | $ | — | | | $ | 764,909 | | Value of accelerated stock-based grants (1) | | | 84,000 | | | | — | | | | 84,000 | | Total | | $ | 848,909 | | | $ | — | | | $ | 848,909 | |
| (1) | For stock options and stock appreciation rights, equal to the aggregate amount of the differences between the exercise prices of the accelerated “in-the-money” stock options and the closing sales price per share of the Company’s Common Stock on the OTC market on December 31, 2015. The amount consists of the value of “in-the-money” stock options and unvested restricted stock units as of December 31, 2015. |
2021: Aggregate cash payments | | | $844,132 | | | $— | | | $1,688,264 | Total | | | $844,132 | | | $— | | | $1,688,264 |
Pursuant to the Post-Plan Rose Agreement,Dr. Gomez’s employment agreement, the following termination and change of control-related circumstances would trigger payments or the provision of other benefits: TABLE OF CONTENTS | ● | Termination by the Company without cause or by Dr. Rose for good reason. | | | | | ● | Termination by the Company without cause or by Dr. Rose for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control (the “Change of Control Period”). | | | | | ● | Termination by the Company for cause or by Dr. Rose without good reason. | | | | | ● | Termination by the Company based on Dr. Rose’s death or total disability. | | | |
Termination by the Company without cause or by Dr. Gomez for good reason. Termination by the Company without cause or by Dr. Gomez for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control. Termination by the Company for cause or by Dr. Gomez without good reason. Termination by the Company based on Dr. Gomez’s death or total disability. If the Post-Plan Rose AgreementDr. Gomez’s employment agreement is terminated without cause or if Dr. RoseGomez terminates his employment for good reason, he will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of his salary for one (1) year; (vi) the payment of any accrued but unpaid guaranteed bonus and any accrued and unpaid annual bonuses with respect to the prior full calendar year; and (vii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants excluding any equity grants that may be awarded after the judgment in the PharmAthene litigation (the “PharmAthene Judgment”) is satisfied under the POR in the event that the PharmAthene Judgment is satisfied by delivery to PharmAthene of one hundred percent (100%) of the Company’s equity, shall, immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. If the Post-Plan Rose AgreementDr. Gomez’s employment agreement is terminated during the Change of Control Period other than for cause or if Dr. RoseGomez terminates his employment during the Change of Control Periodfor good reason, he will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of his salary for one (1) year; (vi) the payment of any accrued but unpaid guaranteed bonus and the payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year; (vii) a pro rata portion of the annual bonus for the year of termination; and (viii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants to Dr. RoseGomez shall immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. If Dr. Rose’sGomez’s employment is terminated by reason of death or total disability, by the Company for cause or if he voluntarily terminates his employment without good reason, he (or his estate orand beneficiaries) will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination, in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; and (v) payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year as determined by the Compensation Committee in good faith and payable in cash in accordance with his employment agreement. In addition, if Dr. Gomez’s employment is terminated due to death or total disability, then Dr. Gomez shall also be entitled to the payment of any accrued but unpaid guaranteed bonus. TABLE OF CONTENTS
Severance Arrangement for Daniel J. Luckshire The following table and footnotes describe and quantify the potential payments to Mr. Luckshire pursuant to the Post-Plan Luckshire Agreement upon termination, change of control or in the event that his contract is not renewed, assuming that such termination, change of control or non-renewal was effective as of December 31, 2015: | | | Termination by the | | | | | | | | | | | | Company without | | | | | | | Termination by the | | | | | cause (or by the | | | Termination upon | | | | Company due to a | | | | | officer for good cause) | | | death or disability | | | | change in control | | | | | | | | | | | | | | Aggregate monthly cash payments | | $ | 450,204 | | $ | — | | | $ | 450,204 | | Value of accelerated stock-based grants (1) | | | 42,000 | | | — | | | | 42,000 | | Total | | $ | 492,204 | | $ | — | | | $ | 492,204 | |
| (1) | For stock options and stock appreciation rights, equal to the aggregate amount of the differences between the exercise prices of the accelerated “in-the-money” stock options and the closing sales price per share of the Company’s Common Stock on the OTC market on December 31, 2015. The amount consists of the value of unvested restricted stock units as of December 31, 2015. |
2021: Aggregate cash payments | | | $655,636 | | | $— | | | $1,311,272 | Total | | | $655,636 | | | $— | | | $1,311,272 |
Pursuant to the Post-Plan Luckshire Agreement, the following termination and change of control-related circumstances would trigger payments or the provision of other benefits: ● | Termination by the Company without cause or by Mr. Luckshire for good reason.
| ● | Termination by the Company without cause or by Mr. Luckshire for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control.
| ● | Termination by the Company for cause or by Mr. Luckshire without good reason. |
● | Termination by the Company based on Mr. Luckshire’s death or total disability. |
Termination by the Company without cause or by Mr. Luckshire for good reason. Termination by the Company without cause or by Mr. Luckshire for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control. Termination by the Company for cause or by Mr. Luckshire without good reason. Termination by the Company based on Mr. Luckshire’s death or total disability. If the Post-Plan Luckshire Agreement is terminated or non-renewed without cause or if Mr. Luckshire terminates his employment for good reason, he will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of his salary for one (1) year; (vi) the payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year; and (vii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants excluding any equity grants that may be awarded after the PharmAthene Judgment is satisfied under the POR in the event that the PharmAthene Judgment is satisfied by delivery to PharmAthene of one hundred percent (100%) of the Company’s equity, shall immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. If the Post-Plan Luckshire Agreement is terminated during the Change of Control Period other than for cause orifor if Mr. Luckshire terminates his employment during the Change of Control Period for good reason, he will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of his salary for one (1) year; (vi) the payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year; (vii) a pro rata portion of the annual bonus for the year of termination; and (viii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants to Mr. Luckshire shall immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. If Mr. Luckshire’s employment is terminated by reason of death or total disability, by the Company for cause or if he voluntarily terminates his employmentwithoutemployment without good reason, he (or his estate and beneficiaries) will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination, in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred TABLE OF CONTENTS to in his employment agreement in accordance with the terms of such plans, programs and grants; and (v) payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year as determined by the Compensation Committee in good faith and payable in cash in accordance with his employment agreement.
Severance Arrangement for Dennis E. Hruby
The following table and footnotes describe and quantify the potential payments to Dr. Hruby pursuant to the Post-Plan Hruby Agreement upon termination, change of control or in the event that his contract is not renewed, assuming that such termination, change of control or non-renewal was effective as of December 31, 2015: | | | Termination by the | | | | | | | | | | | | Company without | | | | | | | Termination by the | | | | | cause (or by the | | | Termination upon | | | | Company due to a | | | | | officer for good cause) | | | death or disability | | | | change in control | | | | | | | | | | | | | | Aggregate monthly cash payments | | $ | 1,092,728 | | $ | — | | | $ | 1,092,728 | | Value of accelerated stock-based grants (1) | | | 31,500 | | | — | | | | 31,500 | | Total | | $ | 1,124,228 | | $ | — | | | $ | 1,124,228 | |
| (1) | For stock options and stock appreciation rights, equal to the aggregate amount of the differences between the exercise prices of the accelerated “in-the-money” stock options and the closing sales price per share of the Company’s Common Stock on the OTC market on December 31, 2015. The amount consists of the value of unvested restricted stock units as of December 31, 2015. |
2021: Aggregate cash payments | | | $1,304,776 | | | $— | | | $1,957,164 | Total | | | $1,304,776 | | | $— | | | $1,957,164 |
Pursuant to the Post-Plan Hruby Agreement, the following termination and change of control-related circumstances would trigger payments or the provision of other benefits: ● | Termination by the Company without cause or by Dr. Hruby for good reason. | | | ● | Termination by the Company without cause or by Dr. Hruby for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control. | | | ● | Termination by the Company for cause or by Dr. Hruby without good reason. | | | ● | Termination by the Company based on Dr. Hruby’s death or total disability. |
Termination by the Company without cause or by Dr. Hruby for good reason. Termination by the Company without cause or by Dr. Hruby for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control. Termination by the Company for cause or by Dr. Hruby without good reason. Termination by the Company based on Dr. Hruby’s death or total disability. If the Post-Plan Hruby Agreement is terminated or non-renewed without cause or if Dr. Hruby terminates his employment for good reason, he will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of his salary for two (2) years (except in the case of non-renewal, in which event such continued payment will be for one (1) year); (vi) the payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year; and (vii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants excluding any equity grants that may be awarded after the PharmAthene Judgment is satisfied under the POR in the event that the PharmAthene Judgment is satisfied by delivery to PharmAthene of one hundred percent (100%) of the Company’s equity, shall immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. If the Post-Plan Hruby Agreement is terminated during the Change of Control Period other than for cause or if Dr. Hruby terminates his employment during the Change of Control Period for good reason, he will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of his salary for two (2) years; (vi) the payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year; (vii) a pro rata portion of the annual bonus for the year of termination; and (viii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants to Dr. Hruby shall immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. If the Dr. Hruby’s employment is terminated by reason of death or total disability, for cause or if he voluntarily terminates his employmentwithoutemployment without good reason, he (or his estate or beneficiaries) will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination, in accordance with Company policy; (iii) any accrued but unpaid expenses through the date TABLE OF CONTENTS of termination required to be reimbursed in accordance with his employment agreement; (iv) any benefits to which he may be entitled upon termination pursuant to the plans, programs and grants referred to in his employment agreement in accordance with the terms of such plans, programs and grants; and (v) payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year as determined by the Compensation Committee in good faith and payable in cash in accordance with his employment agreement.
Severance Arrangement for Robin Abrams In accordance with applicable SEC rules, the following table and footnotes describe and quantify hypothetical payments to Ms. Abrams pursuant to her previously effective employment agreement upon termination, change of control or in the event that her contract was not renewed, assuming that such termination, change of control or non-renewal was effective as of December 31, 2021. Due to her resignation, Ms. Abrams will not be entitled to such severance payments and benefits. Aggregate cash payments | | | $619,544 | | | $— | | | $1,239,088 | Total | | | $619,544 | | | $— | | | $1,239,088 |
Pursuant to Ms. Abrams’ employment agreement,the Amended and Restated Abrams Agreement, the following termination and change of control-related circumstances would trigger payments or the provision of other benefits: ● | Termination by the Company without cause or by Ms. Abrams for good reason.
| ● | Termination by the Company without cause or by Ms. Abrams for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control.
| ● | Termination by the Company for cause or by Ms. Abrams without good reason.
| ● | Termination by the Company based on Ms. Abrams’ death or total disability. |
Termination by the Company without cause or by Ms. Abrams for good reason. Termination by the Company without cause or by Ms. Abrams for good reason in the period that begins 90 days prior to the occurrence of a change of control and ends on the second anniversary of the occurrence of a change of control. Termination by the Company for cause or by Ms. Abrams without good reason. Termination by the Company based on Ms. Abrams’ death or total disability. If the employment agreement is terminated or non-renewed without cause or if Ms. Abrams terminates her employment for good reason, she will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with her employment agreement; (iv) any benefits to which she may be entitled upon termination pursuant to the plans, programs and grants referred to in her employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of her salary for one (1) year; (vi) the payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year; and (vii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants excluding any equity grants that may be awarded after the PharmAthene Judgment is satisfied under the POR in the event that the PharmAthene Judgment is satisfied by delivery to PharmAthene of one hundred percent (100%) of the Company’s equity, shall immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. If the employment agreement is terminated during the Change of Control Period other than for cause orifor if Ms. Abrams terminates her employment during the Change of Control Period for good reason, she will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with her employment agreement; (iv) any benefits to which she may be entitled upon termination pursuant to the plans, programs and grants referred to in her employment agreement in accordance with the terms of such plans, programs and grants; (v) the continued payment of hersalary for one (1) year; (vi) the payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year; (vii) a pro rata portion of the annual bonus for the year of termination; and (viii) the Company shall take all such action as is necessary such that all stock options and other stock-based grants to Ms. Abrams shall immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award. TABLE OF CONTENTS If Ms. Abrams’ employment is terminated by reason of death or total disability, by the Company for cause or if she voluntarily terminates her employmentwithout employment without good reason, she (or her estate and beneficiaries) will be entitled to the following: (i) any accrued but unpaid salary for services rendered through the date of termination; (ii) any vacation accrued to the date of termination, in accordance with Company policy; (iii) any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with her employment agreement; (iv) any benefits to which she may be entitled upon termination pursuant to the plans, programs and grants referred to in her employment agreement in accordance with the terms of such plans, programs and grants; and (v) payment of any accrued but unpaid annual bonuses with respect to the prior full calendar year as determined by the Compensation Committee in good faith and payable in cash in accordance with her employment agreement. Severance Arrangement for William J. Haynes
Under the Haynes Separation Agreement, which was subject to the effectiveness of the POR and Mr. Haynes’ compliance with restrictive covenants contained in his employment agreement that was in effect prior to the Effective Date of the POR, the Company has paid to Mr. Haynes the following bonus amounts:
| · | Mr. Haynes’ annual bonus for the 2014 calendar year equal to $119,351, which amount was paid after the Effective Date of the POR. In the event that in the future the Compensation Committee decides to restore 2014 bonus pay lost as a consequence of the Company’s chapter 11 case, Mr. Haynes shall not be treated less favorably than other executives of the Company; |
| · | Mr. Haynes’ annual bonus for the 2015 calendar year equal to $122,932, or 25% of Mr. Haynes’ target bonus opportunity as discussed above under the heading “Annual Incentive Compensation”, which amount was paid after the Effective Date of the POR. Pursuant ot the Separation Agreement, Mr. Haynes was not treated less favorably than other executives of the Company with respect to determinations concerning the attainment of the applicable performance criteria and goals established by the Compensation Committee and the payment of the 2015 calendar year bonus. |
Circumstances Triggering Payments “Cause”, “good reason” and “change of control” are defined in Dr. Rose,Gomez, Mr. Luckshire, Dr. Hruby and Ms. Abrams’s current (i.e., post-Plan) employment agreements as follows: “Cause” generally includes: | · | executive officer’s neglect or failure or refusal to perform his duties under the applicable employment agreement (other than as a result of total or partial incapacity due to physical or mental illness); |
| · | any act by or omission of executive officer constituting gross negligence or willful misconduct in connection with the performance of his duties that could reasonably be expected to materially injure the reputation, business or business relationships of the Company or any of its affiliates; |
| · | perpetration of an intentional and knowing fraud against or affecting the Company or any of its affiliates or any customer, client, agent, or employee thereof; |
| · | the commission by or indictment of executive officer for (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud (“indictment”, for these purposes, meaning a United States-based indictment, probable cause hearing or any other procedure pursuant to which an initial determination of probable or reasonable cause with respect to such offense is made); |
| · | the breach of a covenant set forth in the applicable employment agreement; or |
| · | any other material breach of the applicable employment agreement. |
executive officer’s neglect or failure or refusal to perform his duties under the applicable employment agreement (other than as a result of total or partial incapacity due to physical or mental illness); any act by or omission of executive officer constituting gross negligence or willful misconduct in connection with the performance of his duties that could reasonably be expected to materially injure the reputation, business or business relationships of the Company or any of its affiliates; perpetration of an intentional and knowing fraud against or affecting the Company or any of its affiliates or any customer, client, agent, or employee thereof; the commission by or indictment of executive officer for (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud (“indictment”, for these purposes, meaning a United States-based indictment, probable cause hearing or any other procedure pursuant to which an initial determination of probable or reasonable cause with respect to such offense is made); the breach of a covenant set forth in the applicable employment agreement; or any other material breach of the applicable employment agreement. “Good reason” generally includes: | · | the Company failing to pay executive officer his base salary; |
| · | executive officer no longer holding his agreed upon office or offices of equivalent stature, or his functions and/or duties being materially diminished; or |
| · | executive officer’s job site being involuntarily relocated to a location which is more than fifty (50) miles from the agreed upon location. |
the Company failing to pay executive officer his base salary; executive officer no longer holding his agreed upon office or offices of equivalent stature, or his functions and/or duties being materially diminished; or executive officer’s job site being involuntarily relocated to a location which is more than fifty (50) miles from the agreed upon location. A “Change of Control” is (or would have been) deemed to occur: upon the consummation of a transaction or a series of related transactions pursuant to which any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than executive officer, his designee(s) or “affiliate(s)” (as defined in Rule 12b-2 under the Exchange Act), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities; upon stockholders of the Company approving a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or TABLE OF CONTENTS | · | upon the consummation of a transaction or a series of related transactions pursuant to which any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than executive officer, his designee(s) or “affiliate(s)” (as defined in Rule 12b-2 under the Exchange Act), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities; |
| · | upon stockholders of the Company approving a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or |
| · | upon the stockholders of the Company approving a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of, or the Company sells or disposes of, all or substantially all of the Company’s assets. |
| · | if, subsequent to the Plan Covenant Termination Date (as defined in the POR), the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board of Directors: individuals who, on the day immediately preceding the Effective Date of the POR, constitute the Board of Directors and any new director whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the day immediately preceding the Effective Date of the POR or whose appointment, election or nomination for election was previously so approved or recommended, but excluding (i) any director whose initial assumption of office is in connection with an actual or threatened election contest (including, but not limited to, a consent or proxy solicitation, relating to the election of directors of the Company by or on behalf of a person other than the Board of Directors) and (ii) any director whose initial assumption of office is in connection with the POR; |
| · | if the PharmAthene Award is satisfied under the POR by delivery to PharmAthene of one hundred percent (100%) of the Company’s equity; or |
| · | if the Board of Directors is reconstituted, due to an event of default under the POR, such that it consists of a majority of directors designated by PharmAthene. |
upon the stockholders of the Company approving a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of, or the Company sells or disposes of, all or substantially all of the Company’s assets. if, subsequent to the Plan Covenant Termination Date (as defined in the POR), the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board of Directors: individuals who, on the day immediately preceding the Effective Date of the POR, constitute the Board of Directors and any new director whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the day immediately preceding the Effective Date of the POR or whose appointment, election or nomination for election was previously so approved or recommended, but excluding (i) any director whose initial assumption of office is in connection with an actual or threatened election contest (including, but not limited to, a consent or proxy solicitation, relating to the election of directors of the Company by or on behalf of a person other than the Board of Directors) and (ii) any director whose initial assumption of office is in connection with the POR; Non-Competition Provisions Pursuant to the current (i.e., post-Plan) employment agreements for Dr. Rose,Gomez, Mr. Luckshire, Dr. Hruby and Ms. Abrams, during the respective terms thereof plus an additional twelve (12) months thereafter for Dr. RoseGomez and Mr. Luckshire, an additional twenty-four (24) months thereafter for Dr. Hruby, and an additional six (6) months thereafter for Ms. Abrams, all of Dr. Rose,Gomez, Mr. Luckshire, Dr. Hruby and Ms. Abrams have agreed not to engage in any competitive business with us, induce our employees to terminate their employment or solicit our customers. We have agreed to indemnify each of them under their respective employment agreements for liabilities incurred because of their employment and to provide each of them with the full protection of any directors’ and officers’ liability insurance policies maintained generally for the benefit of our officers. Our CEO Pay Ratio was calculated in compliance with the requirements set forth in Item 402(u) of Regulation S-K. Based on SEC rules for this disclosure and applying the methodology described below, we determined that our median employee compensation was $135,336. Our Chief Executive Officer compensation, as set forth in the summary compensation table in this proxy statement, was $1,688,264. Accordingly, our CEO to Employee Pay Ratio is approximately 12:1. We identified the median employee using our employee population as of December 31, 2021. We used a consistently applied compensation measure - W-2 earnings - across our employee population (excluding our Chief Executive Officer) as of such date in order to identify the median employee. Once the median employee was identified as described above, that employee’s total annual compensation for 2021 was determined using the same rules that apply to reporting the compensation of our NEOs (including our Chief Executive Officer) in the “Total” column of the Summary Compensation Table. The total compensation amounts included in the first paragraph of this pay-ratio disclosure were determined based on that methodology. The SEC’s pay ratio disclosure rules permit the use of estimates, assumptions, and adjustments, and the SEC has acknowledged that pay ratio disclosures may involve a degree of imprecision. We believe that the foregoing pay ratio is a reasonable estimate calculated in a manner consistent with the SEC’s pay ratio disclosure rules. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
TABLE OF CONTENTS Equity Compensation Plan Information The following table sets forth certain compensation plan information with respect to both equity compensation plans approved by security holders and equity compensation plans not approved by security holders as of December 31, 2015: | | Number of Securities to be | | Weighted-average | | | | | Issued Upon Exercise of | | Exercise Price of | | Number of Securities | | | Outstanding Options, | | Outstanding Options, | | Available for Future | | | Warrants, Rights and | | Warrants, Rights and | | Issuance under Equity | Plan Category | | Restricted Stock Units (1) | | Restricted Stock Units | | Compensation Plans (2) | Equity compensation plans approved by security holders | | 2,950,323 | | $ | 4.04 | | 1,569,169 | Equity compensation plans not approved by security holders | | — | | | N/A | | — | Total | | 2,950,323 | | | | | 1,569,169 |
2021:Equity compensation plans approved by security holders | | | 479,333 | | | $6.62 | | | 4,318,050 | Equity compensation plans not approved by security holders | | | — | | | — | | | — | Total | | | 479,333 | | | $6.62 | | | 4,318,050 |
| (1)
| Consists of the 1996 Incentive and Non-Qualified Stock Option Plan, as amended and restated, and the 2010 Stock Incentive Plan, as amended from time to time. |
| (2)
| Consists of the 2010 Stock Incentive Plan, as amended from time to time. |
As of December 31, 2015,2021, there were no outstanding options, appreciation rights or restricted stock units that had been awarded outside of the Company’s equity compensation plan. During the fiscal year ending December 31, 2015,2021, the directors of SIGA received total compensation as shown in the following table: | | Fees | | | | | | | | | Non-Equity | | | Nonqualified | | | | | | | | | | Earned or | | | Stock | | | | | | Incentive Plan | | | Deferred | | | All Other | | | | | | | Paid in | | | Awards ($) | | | Option | | | Compensation | | | Compensation | | | Compensation | | | | | Name | | Cash ($) | | | (5) | | | Awards ($) | | | ($) | | | Earnings ($) | | | ($) | | | Total ($) | | James J. Antal (1,2) | | | 43,000 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 73,000 | | Michael J. Bayer (2) | | | 49,000 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 79,000 | | Thomas E. Constance | | | 35,500 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 65,500 | | Jeffrey B. Kindler (2) | | | 37,500 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 67,500 | | Joseph W. Marshall, III (3) | | | 51,000 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 81,000 | | Eric A. Rose, M.D. (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Paul G. Savas (1,3) | | | 60,000 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 90,000 | | Bruce Slovin (1,3) | | | 45,000 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 75,000 | | Andrew Stern | | | 37,000 | | | | 30,000 | | | | — | | | | — | | | | — | | | | — | | | | 67,000 | |
James J. Antal(1) | | | 56,091 | | | 150,000 | | | — | | | — | | | — | | | — | | | 206,091 | Thomas E. Constance(2) | | | 21,582 | | | — | | | — | | | — | | | — | | | — | | | 21,582 | Jaymie A. Durnan(3) | | | 49,701 | | | 150,000 | | | — | | | — | | | — | | | — | | | 199,701 | Phillip L. Gomez, Ph.D.(4) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Julie M. Kane(5) | | | 62,271 | | | 150,000 | | | — | | | — | | | — | | | — | | | 212,271 | Joseph W. Marshall, III(7) | | | 65,481 | | | 150,000 | | | — | | | — | | | — | | | — | | | 215,481 | Gary J. Nabel(8) | | | 24,478 | | | 150,000 | | | 128,750 | | | — | | | — | | | — | | | 303,228 | Julian Nemirovsky(9) | | | 47,810 | | | 150,000 | | | — | | | — | | | — | | | — | | | 197,810 | Holly L. Phillips(10) | | | 24,478 | | | 150,000 | | | 128,750 | | | — | | | — | | | — | | | 303,228 | Michael Plansky(11) | | | 69,341 | | | 150,000 | | | — | | | — | | | — | | | — | | | 219,341 | Eric A. Rose, M.D. (12) | | | 19,582 | | | — | | | — | | | — | | | — | | | — | | | 19,582 |
| (1)
| Member of the Audit Committee.Committee and member of the Compensation Committee beginning in June 2021. |
(2)
| (2)Member of the Compensation Committee until June 2021. |
(3)
| Member of the Nominating and Corporate Governance Committee. |
(4)
| (3) | Member of the Compensation Committee. |
| (4) | Chairman of the Board of Directors;Chief Executive Officer; refer to Summary Compensation Table for applicable details. |
(5)
| (5)Chair of the Nominating and Corporate Governance Committee until June 2021, member of Compensation Committee until June 2021, and chair of the Compensation Committee beginning in June 2021. |
(6)
| Represents the grant date fair value of the award in accordance with the authoritative accounting literature. |
35(7)
| Chair of the Compensation Committee until June 2021, chair of the Nominating and Corporate Governance Committee beginning in June 2021, and member of the Audit Committee. |
(8)
| Member of the Board of Directors beginning in June 2021. |
(9)
| Member of the Compensation Committee beginning in June 2021. |
(10)
| Member of the Board of Directors beginning in June 2021. |
(11)
| Chair of the Audit Committee and member of the Nominating and Corporate Governance Committee. |
(12)
| Chairman of the Board of Directors until June 2021. |
TABLE OF CONTENTS Director Fees and Equity Compensation During 2011, the
The Compensation Committee of the Board of Directors conducted a review of Board compensation. CAP prepared a competitive analysis and review of the cash and equity compensation for independent directors. Following thisBased on the review, the Compensation Committee recommended to the Board of Directors an independent director compensation structure whichstructure. Such recommendation was approved by the Board approvedand an updated compensation structure for non-employee directors became effective January 1, 2012.April 8, 2021. The compensation structure for non-employee directors is outlined below: An annual retainer of $45,000 for members, with such payments to be made quarterly, in arrears; An annual retainer of $20,000 for service as the Audit Committee Chairman and $10,000 for service as a member of the Audit Committee, with such payments to be made quarterly, in arrears; An annual retainer of $15,000 for service as the Compensation Committee Chairman and $7,500 for service as a member of the Compensation Committee, with such payments to be made quarterly, in arrears; An annual retainer of $10,000 for service as the Nominating and Corporate Governance Committee Chairman and $5,000 for service as a member of the Nominating and Corporate Governance Committee, with such payments to be made quarterly, in arrears; An annual award of RSUs with a grant value of $150,000 with up to 30% of the vested value to be settled in cash and at least 70% to be settled in stock to be granted on the date of the Annual Meeting with vesting upon the next Annual Meeting; and An award of 25,000 stock options upon a director’s initial appointment to the Board of Directors vesting upon the date of such grant. The compensation structure for non-employee directors in effect through April 7, 2021 is outlined below: An annual retainer of $25,000 for members, with such payments to be made quarterly, in arrears; Board meeting fees of $1,500 per board meeting; An annual retainer of $15,000 for service as the Audit Committee Chairman, with such payments to be made quarterly, in arrears; An annual retainer of $10,000 for service as the Compensation Committee Chairman and the Nominating Committee Chairman, with such payments to be made quarterly, in arrears; Committee meeting fees of $1,000 per committee meeting; An award of 15,000 RSUs to be granted on the date of the Annual Meeting with vesting on the first anniversary of such grant; and An award of 25,000 stock options upon a director’s initial appointment to the Board of Directors vesting upon the date of such grant. TABLE OF CONTENTS | · | An annual retainer of $25,000 for members, with such payments to be made quarterly, in arrears; |
| · | Board meeting fees of $1,500 per board meeting; |
| · | An annual retainer of $15,000 for service as the Audit Committee Chairman, with such payments to be made quarterly, in arrears; |
| · | An annual retainer of $10,000 for service as the Compensation Committee Chairman and the Nominating Committee Chairman, with such payments to be made quarterly, in arrears; |
| · | Committee meeting fees of $1,000 per committee meeting; |
| · | An award of 15,000 RSUs to be granted on the date of the Annual Meeting with vesting on the first anniversary of such grant; and |
| · | An award of 25,000 stock options upon a director’s initial appointment to the Board of Directors vesting upon the date of such grant. |
TRANSACTIONS WITH RELATED PERSONS Review, Approval or Ratification of Transactions with Related Persons The Company’s policies and procedures for reviewing, approving, and ratifying transactions with related persons are set forth in a written policy. Under these procedures, management recommends to the Audit Committee related party transactions to be entered into by the Company, including the proposed aggregate value of such transactions, if applicable. After review, the Audit Committee either approves or disapproves such transactions. Management can preliminarily enter into related party transactions that are subject to ratification by the Audit Committee; provided that, if ratification shall not be forthcoming, management shall make all reasonable efforts to cancel or annul such transactions. In addition, with respect to any related party transaction that includes a compensation component, management will submit the terms of such proposed compensation (or any subsequent material changes to such compensation) to the Compensation Committee for its review. After its review, the Compensation Committee either approves or disapproves the compensation component of the related party transaction and informs management and the Audit Committee of such approval or disapproval. Transactions with Related Persons Based on information provided by the directors and the executive officers, the Audit Committee determined that there were no related person transactions to be reported in this proxy statement other than: Kramer Levin Naftalis & Frankel LLP, a law firm used by the Company, billed the Company $0.1 million and $0.5 million during the years ended December 31, 2021, and December 31, 2020, respectively, for legal services provided to the Company. One of our former directors, Thomas Constance, is a partner at Kramer Levin Naftalis & Frankel LLP. • | · | Kramer Levin Naftalis & Frankel LLP, the Company’s outside legal counsel, billedOn May 26, 2017, the Company for legal services provided to the Company. One of our directors, Thomas Constance, is a partner at Kramer Levin Naftalis & Frankel LLP. |
| · | In October 2012, the Company funded a letter of credit and deposit to take advantage of a lease for office space secured by an affiliate of M&F from a third party landlord on behalf of the Company. Pursuant to such letter of credit, in January 2013 the Company entered into a sublease inten-year office lease agreement (the “New HQ Lease”), pursuant to which the Company will pay all costs associated withagreed to lease 3,200 square feet at 27 East 62nd Street, New York, New York. The Company is utilizing premises leased under the lease, including rent. All payments made by the Company pursuant to the sublease will either be directly or indirectly made to the third-party landlord and not retained by M&F or any affiliate.New HQ Lease as its corporate headquarters. The Company’s occupancyrental obligations consist of a fixed rent of $25,333 per month in the first sixty-three months of the space commenced April 1, 2013. The sublease allowed forterm, subject to a free rent period of five months; subsequent to the free rent period, monthly rent payments are scheduled to be $60,000abatement for the first five years and $63,000 forsix months of the next two years. Uponterm. From the first day of the sixty-fourth month of the term through the expiration on September 1, 2020,or earlier termination of the sublease and lease, provides for two consecutive five year renewal options. |
| · | On April 30, 2013, SIGA entered intothe Company’s rental obligations will consist of a Services Agreement with M&F for certain professional and administrative services. The Services Agreement has a termfixed rent of three years. As consideration for$29,333 per month. In addition to the Services Agreement, SIGA issued warrants to M&F to acquire 250,000 shares of common stock at an exercise price of $3.29 per share. The warrants expired in April, 2015. |
| · | In 2015, an affiliate of M&F providedfixed rent, the Company with researchpays a facility fee, in consideration of the landlord making available certain ancillary services, for a pre-clinical drug candidate.which commenced on the first anniversary of entry into the lease. The Company incurred costsfacility fee is $3,859 per month as of $26,000 in 2015 for the services.December 31, 2021 and will increase by five percent each year. |
On October 13, 2018, the Company entered into a consulting agreement with Eric Rose, former Chairman of the Company’s Board of Directors. Under the agreement, the consulting services included assisting the Company with respect to expanded indications for TPOXX® and other business development opportunities as requested by the Company. The term of the agreement was for two years, with compensation for such services at an annual rate of $200,000. During the year ended December 31, 2020, the Company incurred $156,522 related to services under this agreement. As the agreement expired in 2020, the Company did not incur any expenses under this agreement during the year ended December 31, 2021. TABLE OF CONTENTS FEES BILLED BY PRICEWATERHOUSECOOPERS LLP The following table presents fees billed for professional audit services rendered by PricewaterhouseCoopers LLP. | | Year ended December 31, | | | | 2015 | | | 2014 | | Audit Fees | | $ | 697,000 | | | $ | 765,000 | | Audit Related Fees | | | 45,000 | | | | 45,000 | | All Other Fees | | | 3,000 | | | | 3,000 | | Total Fees | | $ | 745,000 | | | $ | 813,000 | |
Audit Fees | | | $680,000 | | | $510,560 | Audit Related Fees | | | 50,000 | | | 49,920 | Tax Fees | | | — | | | — | All Other Fees | | | 4,150 | | | 4,899 | Total Fees | | | $734,150 | | | $565,379 |
Audit Fees. Consists of fees billed for professional services rendered and expenses incurred for the integrated audit of SIGA’s annual financial statements and of its internal control over financial reporting, reviews of the interim financial statements included in quarterly reports and for services normally provided by PricewaterhouseCoopers LLP in connection with statutory and regulatory filings or engagements.
Audit Related Fees. Consists offeesof fees billed that are related to the performance of the audit or review of SIGA’s financial statements and are not reported under “Audit Fees.” These services are mainly related to the audit of our federal expenditures.
All Other Fees. Consists of fees billed for products and services other than the services reported above. These products included accounting research software.Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services, and other services. SIGA did not make use in fiscal year 20152021 of the rule that waives pre-approval requirements for non-audit services in certain cases if the fees for these services constitute less than 5% of the total fees paid to the auditor during the year. TABLE OF CONTENTS PROPOSALS TO BE VOTED ON AT THE MEETING PROPOSAL 1: ELECTION OF DIRECTORS Nine directors are to be elected at the Annual Meeting to hold office until the next Annual Meeting of Stockholders and until their successors have been duly elected and qualified. Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR the election of the nine persons named in the table below as directors of SIGA. Proxies cannot be voted for a greater number of persons than the nominees named. In the event that any of the below listed nominees for director should become unavailable for election for any presently unforeseen reason, the persons named in the accompanying proxy formcard have the right to use their discretion to vote for a substitute. For additional information about the nominees and their qualifications, please see “ Our Director Nominees.” The Board of Directors recommends that the stockholders vote “FOR” the election to the Board of each of the following nominees (Item 1 of the enclosed proxy card):nominees: James J. Antal* | | | 71 | | | 2004 | | | Director | Jaymie A. Durnan* | | | 68 | | | 2020 | | | Director | Phillip L. Gomez | | | 55 | | | 2016 | | | Director and Chief Executive Officer | Julie M. Kane* | | | 63 | | | 2019 | | | Director | Joseph W. Marshall, III* | | | 69 | | | 2009 | | | Director | Gary J. Nabel* | | | 68 | | | 2021 | | | Director | Julian Nemirovsky* | | | 38 | | | 2020 | | | Director | Holly L. Phillips* | | | 51 | | | 2021 | | | Director | Michael C. Plansky* | | | 72 | | | 2017 | | | Lead Independent Director |
*
| Determined by the Board of Directors to be independent pursuant to Nasdaq Rule 5605. |
TABLE OF CONTENTS Name | Age | Director Since | Position | Eric A. Rose, M.D. | 65 | 2001 | Chairman of the Board and Chief Executive Officer | James J. Antal* | 65 | 2004 | Director | Michael J. Bayer* | 68 | 2008 | Director | Thomas E. Constance* | 79 | 2001 | Director | Jeffrey B. Kindler* | 60 | 2013 | Director | Joseph W. Marshall, III* | 63 | 2009 | Director | Paul G. Savas* | 53 | 2004 | Director | Bruce Slovin* | 80 | 2008 | Director | Andrew Stern* | 65 | 2010 | Director | | | | | * Determined by the Board of Directors to be independent pursuant to Rule 5605 of the NASDAQ Marketplace Rules. |
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee of the Board of Directors has appointed the firm PricewaterhouseCoopers LLP as SIGA’s independent registered public accounting firm to audit the financial statements of SIGA for the fiscal year ending December 31, 2016,2022, and recommends that stockholders vote for ratification of this appointment. PricewaterhouseCoopers LLP has audited SIGA’s financial statements since January 1997. Representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions. The affirmative vote of a majority in voting power of the total votes castshares of stock present, in person or represented by proxy, and entitled to vote on such proposal in person or by proxy at the Annual Meeting will be required to ratify the selection of PricewaterhouseCoopers LLP. If the stockholders fail to ratify the selection, the Audit Committee will reconsider its selection of auditors. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year, if it determines that such change would be in the best interests of SIGA and its stockholders. The Board of Directors recommends that the stockholders vote “FOR” the ratification of PricewaterhouseCoopers LLP as SIGA’s independent registered public accounting firm for the fiscal year ending December 31, 2022. TABLE OF CONTENTS PROPOSAL 3: APPROVAL OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE PROVISIONS THAT ARE NO LONGER APPLICABLE Overview Our current Amended and Restated Certificate of Incorporation (the “Charter”) contains several provisions (collectively, the “Bankruptcy Provisions”) related to the Company’s Plan of Reorganization, effective as of April 12, 2016 (Item 2(the “Plan”), filed with the U.S. Bankruptcy Court for the Southern District of New York. The Bankruptcy Provisions are no longer applicable or operative under their terms since the Plan terminated in accordance with its terms. The Bankruptcy Provisions: as a general matter, regulate the conduct of certain affairs of the enclosedCompany, in accordance with the Plan, and incorporate provisions of the Plan; prevent the Company from issuing non-voting equity securities in contravention of Section 1123(a)(6) of the U.S. Bankruptcy Code; permit the Board to, in accordance with the Plan, reconstitute the Board, cancel existing Equity Interests (as defined in the Plan) and issue New Common Stock (as defined in the Plan); exclude, in accordance with the Plan, certain matters from the restriction on stockholder action by written consent; and restrict indemnification rights to certain persons acting, on or after September 16, 2014, as a director or employee of the Company. The Board believes that it is in the best interests of the Company and its stockholders to amend and restate the Charter to remove the Bankruptcy Provisions and to make additional ministerial, clarifying and conforming changes. Accordingly, the Board unanimously approved and declared advisable, subject to stockholder approval, an Amended and Restated Charter to eliminate the Bankruptcy Provisions. Description of the Proposed Amended and Restated Certificate of Incorporation The proposed Amended and Restated Charter would eliminate the Bankruptcy Provisions and reflect additional ministerial, clarifying and conforming changes by: updating Article SECOND to reflect the Company’s current registered office; deleting certain language relating to the Plan in Articles FOURTH, EIGHTH and ELEVENTH; deleting Articles TWELFTH, THIRTEENTH and FOURTEENTH in their entirety; and making conforming cross reference changes and other ministerial revisions in the Charter. The foregoing description is only a summary and is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the proposed Amended and Restated Charter included in the Appendix to this proxy card).statement. Required Vote and Impact of Vote The affirmative vote of a majority in voting power of shares entitled to vote on Proposal No. 3 at the Annual Meeting will be required to approve the proposed Amended and Restated Charter. Abstentions and broker non-votes, if any, will have the same effect as “against” votes on Proposal No. 3. Brokers and other nominees will have discretionary voting power to vote without instructions from the beneficial owner on Proposal No. 3 and, accordingly, your shares may be voted by your broker on this proposal. If approved by our stockholders, the proposed Amended and Restated Charter will become effective upon its filing and effectiveness with the Secretary of State of Delaware, which is expected to occur promptly following the 2022 Annual Meeting. If the proposed Amended and Restated Charter is not approved by our stockholders, our Charter will continue in its current form. The Board of Directors recommends that the stockholders vote “FOR” approval of the Amended and Restated Certificate of Incorporation described above. TABLE OF CONTENTS Stockholder proposals submitted for inclusion in our proxy materials for the 20172023 Annual Meeting of Stockholders must be received at our principal executive offices, 660 Madison Avenue, Suite 1700,31 East 62nd Street, New York, New York 10065, Attention: Secretary, not later than December 19, 2016,28, 2022, if the proposal is submitted pursuant to Rule 14a-8 under the Exchange Act, or not earlier than December 18, 2016February 14, 2023 and not later than January 17, 2017March 16, 2023 if the proposal is submitted pursuant to SIGA’s Bylaws. In order to avoid controversy, stockholders should submit proposals by means, including electronic, that permit them to prove the date of delivery. Such proposals must comply with applicable requirements under SIGA’s Bylaws and the requirements of Regulation 14ARule 14a-8 under the Exchange Act. If a stockholder intends to present a proposal for consideration at the next annual meeting outside of the processes of Rule 14a-8 under the Exchange Act, we must receive notice of such proposal at the address given above by March 4, 2017.13, 2023. If not received by such date, such notice will be considered untimely under Rule 14a-4(c)(1) under the Exchange Act, and our proxies will have discretionary voting authority with respect to such proposal, if presented at the annual meeting. We will not be required to include any such proposal in our proxy materials. The Exchange Act deadlines described above are calculated by reference to the mailing date of the proxy materials for this year’s Annual Meeting. If the date of next year’s Annual Meeting is more than 30 days earlier or later than the anniversary of this year’s meeting, SIGA will, in a timely manner, inform stockholders of such change and the effect of such change on the deadlines given above by including a notice in our Annual Report on Form 10-K, one of our Quarterly Reports on Form 10-Q, a Current Report on Form 8-Kfiling with the SEC or by any other means reasonably calculated to inform stockholders. SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires SIGA’s officers and directors, and persons who own more than ten percent of a registered class of SIGA’s equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish SIGA with copies of all Section 16(a) reports that they file.
Based solely upon review of the copies of such reports furnished to SIGA and written representations from certain of SIGA’s executive officers and directors that no other such reports were required, SIGA believes that during the fiscal year ended December 31, 2015, no director failed to file on a timely basis a report relating to a transaction as required by Section 16(a) of the Exchange Act.
AVAILABILITY OF ANNUAL REPORT ANDON FORM 10-K TO STOCKHOLDERS SIGA’s Annual Report to Stockholders for the year ended December 31, 20152021 accompanies this proxy statement. SIGA will provide to any stockholder, upon written request and without charge, a copy of its most recent Annual Report on Form 10-K, including the financial statements, as filed with the SEC. All requests for such reports should be directed to the Chief Financial Officer, 660 Madison Avenue, Suite 1700,31 East 62nd Street, New York, New York 10065, telephone number (212) 672-9100. At the date of this proxy statement, management wasis not aware that any matters not referred to in this proxy statement would be presented for action at the Annual Meeting. If any other matters should come before the Annual Meeting, the persons named in the accompanying proxy will have discretionary authority to vote all proxies in accordance with their best judgment, unless otherwise restricted by law. TABLE OF CONTENTS “ Householding” of Proxy Materials
HOUSEHOLDING” OF PROXY MATERIALS The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding”, potentially provides extra convenience for stockholders and cost savings for companies. We and some brokers household proxy materials, delivering a single proxy statement or annual report to multiple stockholders sharing an address, unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or annual report, please notify us by sending a written request to SIGA Technologies, Inc., 660 Madison Avenue, Suite 1700,31 East 62nd Street, New York, New York 10065 or by calling us at (212) 672-9100. You may also notify us to request delivery of a single copy of our annual report or proxy statement if you currently share an address with another stockholder and are receiving multiple copies of our annual report or proxy statement. | | | | | BY ORDER OF THE BOARD OF DIRECTORS | | | | | | | | Daniel J. Luckshire | | | | Secretary | Dated: April 27, 2022 | | | |
Dated: April 18, 2016
ANNUAL MEETINGTABLE OF STOCKHOLDERSCONTENTS
Appendix The Amended and Restated Charter, marked to show the proposed amendments to the current Charter, is set forth below. Proposed deletions are reflected in “strike-through” text and proposed additions are reflected in “underline” text. AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SIGA TECHNOLOGIES, INC. May 17,
Pursuant to Section 303Sections 242 and 245
of the General Corporation Law of
the State of Delaware The undersigned, Daniel J. Luckshire, certifies that he is the Executive Vice President and Chief Financial Officer of SIGA Technologies, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), and does hereby further certify as follows: 1. The name of the corporation is SIGA Technologies, Inc. (the Corporation”). The name under which the Corporation was originally incorporated was SIGA Pharmaceuticals, Inc. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware (the “Secretary of State”) on December 28, 1995, and a Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State on April 27, 2000 (as so amended and as further amended, the “Certificate of Incorporation”). 2. This Amended and Restated Certificate of Incorporation amends and restates the Certificate of Incorporation and has beenwas duly adopted and implemented pursuant to the Third Amended Chapter 11 Planby the Board of Directors of the Corporation, dated April 7, 2016Directions to offices (the “Plan”) as confirmed by Order of Kramer Levin Naftalis & Frankel LLP
By Air
There are three major airportsthe United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) (Chapter 11 Case No. 14-12623 (SHL), dated April 8, 2016 (the “Confirmation Order”) andand by the stockholders of the Corporation in accordance with the provisions of Section 303Sections 242 and 245 of the General CorporateCorporation Law of the State of Delaware. The Plan and the Confirmation Order authorize the making and filing of this Amended and Restated Certificate of Incorporation. 3. The text of the Certificate of Incorporation of the Corporation, as amended and restated by the Amended and Restated Certificate of Incorporationhereby, reads in its entirety as follows: FIRST: The name of the Corporation is SIGA Technologies, Inc. (the “Corporation”). SECOND: The address of the Corporation’s registered office in the metropolitan area: LaGuardia Airport (whichState of Delaware is closest,2711 Centerville Road, Suite 400251 Little Falls Drive, City of Wilmington, County of New Castle, DE 19808. The name of the registered agent of the Corporation at such address is Corporation Service CorporationCompany. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a Corporation may be organized under the General Corporation Law of Delaware. FOURTH: The total number of shares of capital stock that the Corporation shall have the authority to issue is Six Hundred Twenty Million (620,000,000) shares consisting of: (i) Six Hundred Million (600,000,000) shares of common stock, par value $.0001 per share (the “Common Stock”); and (ii) Twenty Million (20,000,000) shares of preferred stock, par value $.0001 per share (the “Preferred Stock”). The Board of Directors of the Corporation (the “Board of Directors”) shall have the authority to fix by Resolution the voting powers (full, limited, multiple, fractional or none), designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights and other special or relative rights of the Preferred Stock or any class or series thereof prior to or concurrently with the issuance of such shares. There shall be no cumulative voting rights for the Common Stock. TABLE OF CONTENTS The holders of the Common Stock and the Preferred Stock shall be entitled to dividends, when, as and if declared by the Board of Directors of the Corporation, payable at such time or times as the Board of Directors may determine. Subject to the determination of the Board of Directors with regard to the Preferred Stock, in the NYC Boroughevent of Queens County), John F. Kennedy International Airport (alsoany liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, all remaining assets and funds of the Corporation available for distribution to its stockholders shall be distributed in equal amounts per share and without preference or priority of one class of common stock over the other. Notwithstanding the foregoing, any and all Common Stock and Preferred Stock, whether issued or outstanding prior or subsequent to the Effective Date (as defined in the NYC Borough of Queens County) and Newark International Airport (in Newark, NJ). From each of these airports, you can take a taxi to and from the office.
From Penn Station (Hub for Long Island Railroad, Amtrak and some NJ Transit Trains)
Walk north on 7th Avenue to 45th Street and make a right onto 45th Street. Walk one avenue east to AvenueThird Amended Chapter 11 Plan of the Americas (6th Avenue). 1177 AvenueCorporation, dated April 7, 2016 (the “Plan”) as confirmed by Order of the Americas United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) (Chapter 11 Case No. 14-12623 (SHL), dated April 8, 2016) (the “Confirmation Order”)), shall be subject to all of the terms and provisions of the Plan, including, without limitation, the cancellation of any such shares of Common Stock and Preferred Stock to the extent provided in the Plan.
No action may be taken by the stockholders of the Corporation by their written consent without a stockholders’ meeting. Notwithstanding the foregoing, after such time, if any, that the New Common Stock (as defined in the Plan) is issued to PharmAthene, Inc. as provided in the Plan, then any action may be taken by the stockholders of the Corporation by written consent without a stockholders’ meeting. No stockholder of the Corporation shall by reason of his or her holding shares of any class have any preemptive or preferential right to purchase or subscribe to any shares of any class of the Corporation, now or hereafter to be authorized, or any notes, debentures, bonds, or other securities convertible into or carrying options or warrants to purchase shares of any class, now or hereafter to be authorized, whether or not the issuance of any such shares, or such notes, debentures, bonds or other securities, would adversely affect the dividend or voting rights of such stockholder, other than such rights, if any, as the Board of Directors, in its discretion from time to time may grant, and at such price as the Board of Directors in its discretion may fix; and the Board of Directors may issue shares of any class of the Corporation, or any notes, debentures, bonds, or other securities convertible into or carrying options or warrants to purchase shares of any class, without offering any such shares of any class, either in whole or in part, to the existing stockholders of any class. FIFTH: The number of directors of the Corporation shall be such as from time to time shall be fixed by, or in the manner provided in, the by-laws of the Corporation. No election of directors need be by ballot unless the by-laws so provide. SIXTH: The Corporation hereby expressly elects not to be governed by Section 203 of the General Corporation Law of Delaware. SEVENTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided, however, that this provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware, or (iv) from any transaction from which the director derived an improper personal benefit. EIGHTH: The Corporation shall indemnify, in accordance with and to the full extent now or hereafter permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, an action by or in the right of the Corporation), by reason of his or her acting as a director of the Corporation on the near left corner of 45th.
From Port Authority (Hub for NJ Transit Buses Commencement Date (as defined in the Plan) or at any time thereafter (and Some Out of Town Buses such as Greyhound)
Walk north on 8th Avenue to 45th Street and make a right onto 45th Street. Walk three avenues east to Avenuethe Corporation, in the discretion of the Americas. 1177 AvenueBoard, may so indemnify a person by reason of the Americasfact that he or she is or was an officer or employee of the Corporation or is or was serving at the request of the Corporation in any other capacity for or on behalf of the Corporation on the near left cornerCommencement Date or at any time thereafter) against any liability or expense actually and reasonably incurred by such person in respect thereof; provided, however, that, the Corporation shall not be obligated to indemnify any such person (i) with respect to proceedings, claims or actions initiated or brought voluntarily by such person and not by way of 45th.
From Grand Central Station (Hubdefense, or (ii) for MetroNorth - Connecticut and Westchester)
Walk west two and a half avenues up 42nd Street to Avenueany amounts paid in settlement of an action effected without the prior written consent of the Americas. MakeCorporation to such settlement. Such indemnification is not exclusive of any other right to indemnification provided by law, agreement or otherwise. TABLE OF CONTENTS NINTH: No amendment to or repeal of Article SevenSeventh or Article EightEighth of this Certificate of Incorporation shall apply to or have any effect on the rights of any individual referred to in Article SevenSeventh or Article EightEighth for or with respect to acts or omissions of such individual occurring prior to such amendment or repeal. TENTH: Whenever a rightcompromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on 42nd Street and Avenuethe application in a summary way of the Americas. Walk three blocks northCorporation or of any creditor or stockholder thereof or on Avenuethe application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of Title 8 of the Americas to #1177.Nearest Subway StationsThe B, D, F and M trains all go to 47th and 50th Streets/Rockefeller Center. The A, C, E, 7, 1, 2, 3, N, R and Q trains all go to 42nd Street/Times Square (Broadway and 7th Avenues). The 4, 5, 6 and 7 trains all go to Grand Central Terminal (42nd-45th Streets between Lexington and Madison Avenues).ParkingThe two nearest parking garages areGeneral Corporation Law of Delaware or on the garage on 46th Street, between 7th Avenue and Avenueapplication of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the Americas, right beforeGeneral Corporation Law of Delaware, order a meeting of the Muse Hotel,creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the Grace Building Garagesaid reorganization shall, if sanctioned by the court to which the said application has been made, be binding on 43rd Street and Avenueall the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Americas.The office is located between 45thCorporation, as the case may be, and 46th Streets. Reception isalso on the 29th Floor. Corporation. ELEVENTH: The Board of Directors shall have power without the assent or vote of the stockholders to make, alter, amend, change, add to or repeal the by-laws of the Corporation; provided, however, that prior to the Plan Covenant Termination Date (as defined in the Plan) the by-laws of the Corporation and this Certificate of Incorporation may not be amended by the Board of Directors or the stockholders other than as permitted by the Plan Covenants (as defined in the Plan). TWELFTH: The Corporation shall not issue any non-voting equity securities in contravention of Section 1123(a)(6) of the Bankruptcy Code.
THIRTEENTH: The Plan Covenants (as defined in the Plan) are adopted in this Certificate of Incorporation and incorporated herein by reference as if fully set forth herein.
FOURTEENTH: Pursuant to the Plan, the Board of Directors shall have the power without the assent or vote of the stockholders or any other corporate action to (a) effectuate the potential reconstitution of the Board of Directors if and to the extent required by Section 6.6(d) of the Plan; and/or (b) cancel existing Equity Interests (as defined in the Plan) and issue New Common Stock (as defined in the Plan) in the event the Corporation elects to treat the PharmAthene Allowed Claim (as defined in the Plan) in accordance with Section 4.3(b)(i)(C) of the Plan, or the PharmAthene Allowed Claim is to be treated as set forth in Section 4.3(b)(ii) of the Plan.
FIFTEENTHTWELFTH: The Corporation shall have perpetual existence.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th[•] day of AprilJune, 20162022. | | | SIGA TECHNOLOGIES, INC. | | | | | | | | | | | | | | By: | | | /s/ Daniel J. Luckshire | | | | | | | Name: | | | Daniel J. Luckshire | | | | | | | Title: | | | Executive Vice President and
Chief Financial Officer |
TABLE OF SIGA TECHNOLOGIES, INC.
May 17, 2016 CONTENTS
GO GREEN | e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.
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NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:The Notice of Meeting, proxy statement and proxy card for record holders areavailable at www.siga.com.A link to this information will be available on SIGA’s Investor Relations Page.Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
| | 20930000000000000000 3 | 051716 |
| | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR ALL NOMINEES” ON PROPOSAL 1, AND “FOR” ON PROPOSAL 2. | PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒ |
| | | | FOR | AGAINST | ABSTAIN | | 2. | | To ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of SIGA Technologies, Inc. for the fiscal year ending December 31, 2016.
| ☐ | ☐ | ☐ | | | | | | THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT MAY BE REVOKED PRIOR TO ITS EXERCISE.
| | | | | | RECEIPT OF NOTICE OF THE ANNUAL MEETING AND PROXY STATEMENT IS HEREBY ACKNOWLEDGED, AND THE TERMS OF THE NOTICE AND PROXY STATEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS PROXY. THE UNDERSIGNED HEREBY REVOKES ALL PROXIES HERETOFORE GIVEN FOR SAID MEETING AND ANY AND ALL ADJOURNMENTS, POSTPONEMENTS AND CONTINUATIONS THEREOF.
| | | | | | PLEASE VOTE, DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
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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. | |
| | | | SIGA TECHNOLOGIES, INC. PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 2016 The undersigned hereby appoints each of Eric A. Rose and Daniel J. Luckshire as attorney and proxy of the undersigned, with full power of substitution, to vote all of the shares of stock of SIGA Technologies, Inc. which the undersigned may be entitled to vote at the Annual Meeting of Stockholders of SIGA Technologies, Inc. to be held at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, 29th floor, New York, New York 10036, on Tuesday, May 17, 2016, at 10:30 a.m. (local time), and at any and all postponements, continuations and adjournments thereof, with all powers that the undersigned would possess if personally present, upon and in respect of the following matters and in accordance with the following instructions, with discretionary authority as to any and all other matters that may properly come before the meeting. (Continued and to be signed on the reverse side) | | | 1.1 | 14475 | |
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