Amendment to Our 2011 Stock Incentive Plan
. At our meeting of stockholders held on June 9, 2016, the stockholders approved the amendment to our 2011 Stock Incentive Plan, as previously amended (the “2011 Plan”). The only material change that was made to the 2011 Plan was to increase the number of shares of our common stock, par value $0.01 per share (the “Shares”) reserved for issuance from 10,000,000 Shares to 12,500,000 Shares. In addition to the 12,500,000 Shares that may be issued or transferred with respect to awards under the 2011 Plan, shares covering awards, including awards under our 2005 Stock Plan, as amended, that were outstanding on May 11, 2011, that terminate or are forfeited, or shares that are returned to us pursuant to a compensation recovery policy, will again be available for issuance under the 2011 Plan.
The 2011 Plan authorizes the grant of equity-based and cash-based compensation to our employees, consultants and non-employee directors in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards and cash-based awards. The 2011 Plan is intended to comply with the exemption from Section 162(m) of the Code relating to performance-based compensation, and provides for a maximum aggregate number of shares, compensation and dividend equivalents that may granted or paid in any calendar year to any one participant. The 2011 Plan will terminate on March 11, 2021, or such earlier date as our Board of Directors may determine. The 2011 Plan will remain in effect for outstanding awards until no awards remain outstanding.
Approval of Employment Agreements
. On June 9, 2016, our Board of Directors, upon the recommendation of the Compensation Committee of the Board of Directors, approved new employment agreements with Carl Spana, Ph.D., as our Chief Executive Officer and President and Stephen T. Wills as our Executive Vice President of Operations, Chief Financial Officer and Chief Operating Officer.
The employment agreements (the “Employment Agreements”), which are effective July 1, 2016 and expire June 30, 2019, provide for a base annual salary of $476,400 for Spana and $435,200 for Wills, and provide cash performance bonuses at the discretion of the Board of Directors. The agreements provide that options and restricted share units granted to the named executive officers accelerate upon termination of employment except for voluntary resignation by the officer or termination for cause. In the event of retirement, termination by the officer for good reason, or termination by the Company other than for cause, options outstanding immediately prior to July 1, 2016 may be exercised until the earlier of twenty-four months following termination or expiration of the option term, and options granted on or after July 1, 2016 may be exercised until expiration of the option term.
The Employment Agreements further provide for twenty-four months severance pay for Spana and eighteen months severance pay for Wills in the event of termination at the election of the Board of Directors, termination by the officer for good reason, or termination by the officer for good reason or at the election of the Board of Directors following a change in control. Health insurance premiums are paid for the period of severance pay.