Item 5.02
.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
.
(b) Resignation of Director
s
On November 2, 2017, the Board of Directors (the “
Board
”) of Pulse Biosciences, Inc. (the “
Company
”) accepted the resignations of Robert J. Greenberg
, M.D., Ph.D.
, Robert M. Levande, Mitch
ell
E. Levinson
and Thierry B. Thaure
from the Board
, including the resignation of Mr. Levande as Chairman of the Board
and
the
resignations of
Dr
.
Greenberg, Mr. Levinson and Mr.
Thaure from the Audit Committee, the Compensation Committee
,
and
the Nominating and Corporate Governance Committee
of the Board
.
The
resignations of
Dr
.
Greenberg, Mr.
Levande,
Mr. Levinson and
Mr
. Thaure
are
effective immediately, and are
not the result of any disagreement with the Company relating to the Company’s operations, policies or practices.
In connection with their
resignation
s
,
Dr
.
Greenberg, Mr.
Levande, M
r
.
Levinson and Mr.
Thaure
will each receive
a lump sum cash stipend equivalent to their annual retainer, prorated for the remainder of
the
ir respective
term, and
all equity awards held
by each
individual have been fully vested
.
(d) Election of Director
s
; Appointment of Committee Members
; New Outside Director Compensation Policy
On November 2, 2017, the Board elected Kenneth A. Clark, Robert W. Duggan, Thomas J. Fogarty
, M.D.
and Manmeet S. Soni to the Board, effective immediately.
Mr. Clark,
Mr. Duggan,
D
r. Fogarty
and
Mr. Soni
will serve
until their
respective
term
s
expire at the annual meeting of
stockholders to be held in 2018
and until his successor is duly elected and qualified or until his earlier death, resignation or removal
.
In addition
, to fill in the vacancies created by the departures of
Dr
. Greenberg, Mr. Levande, Levinson and Mr. Thaure
, the Board appointed
(i)
Mr. Duggan to
serve as Chairman of the Board
; (ii)
Dr. Fogarty, Mr. Soni and
Maky Za
n
ganeh
to serve as
member
s
of the
Audit Committee,
with Mr. Soni serving as Chair of the Audit Committee;
(
i
ii)
Mr. Soni and
Dr
.
Za
n
ganeh
to serve as members of
the Compensation Committee,
with
Dr
. Za
n
ganeh serving as Chair of the Compensation Committee;
and
(iv
)
Mr. Clark,
Mr. Duggan
and
Dr. Fogarty
to serve as members
the Nominating and Corporate Governance Committee,
with Mr.
Clark
serving as Cha
i
r
of the Nominating and Corporate Governance Committee
.
Robert W. Duggan
Mr. Duggan
, age
73
,
served as C
hairman of the Board of Directors of
Pharmacyclics, Inc.
(“
Pharmacycli
c
s
”)
,
a biopharmaceutical company focused on developing and commercializing innovative small-molecule drugs for the treatment of cancer and immune mediated diseases, from 2007 to
2015
and Chief Exec
utive Officer from 2008 to 2015
, when Pharmacyclics was acquired by AbbVie Inc.
Mr. Duggan
previously
served as Chairman of the Board of Directors of Computer Motion, Inc., a computerized surgical systems company, from 1990 to 2003 and Chief Executive Officer from 1997
until
Computer Motion was acquired by Intuitive Surgical, Inc. in 2003. Mr. Duggan served on the Intuitive Surgical, Inc. Board from 2003 through March 2011. Mr. Duggan has been a private venture investor for more than 30 years and has participated as a director of, investor in, and advisor to small and large businesses in the medical equipment, computer local and wide area network, PC hardware and software distribution, digital encryption, consumer retail goods and outdoor media communication industries.
He is a member of the University of California at Santa Barbara Foundation Board of Trustees.
As previously
disclosed on the Amendment No.
6 to Schedule 13D as filed on September 26, 2017
(“
Schedule 13D
”)
, Mr. Duggan is
currently the
beneficial owner of
approximately
36
% of the Company’s common stock.
Pursuant to the Securities Purchase Agreement, dated February 7, 2017, by and among the Company and the other parties thereto, the Company has granted certain registration rights to Mr. Duggan.
Pursuant to the Securities Purchase Agreement
,
dated September 24, 2017
by and between the Company and the other parties thereto,
(the “
Purchase Agreement
”)
,
the Company has granted certain registration rights to Mr. Duggan and the Company will, among other things, prepare and file with the
Securities and Exchange Commission (“
SEC
”)
a registration statement to register for resale the
shares sold
pursuant to
the Purchase Agreement
when commercially reasonably, but in any event no earlier than January 2, 2018.
Thomas J. Fogarty
, M.D.
Dr.
Fogarty, age 83,
is
a managing director of Emergent Medical Partners, an investment firm focused on private medical device companies, which he founded in 2007. Prior to Emergent Medical Partners, Dr. Fogarty held various positions at Stanford University where he performed both cardiac and peripheral vascular surgery. His positions at Stanford University included Professor of Cardiovascular Surgery and President of the Medical Staff. Dr. Fogarty holds a B.S. degree in Biology from Xavier University and an M.D. from Cincinnati College of Medicine.
There are no related person transactions within the meaning of Item 404(a) of Regulation S-K promulgated by the
SEC
between Dr. Fogarty and the Company required to be disclosed herein.
Manmeet S. Soni
Mr. Soni, age 39
,
has served as
Senior Vice President, Chief Financial Officer of Alnylam Pharmaceuticals, Inc.
since May 2017.
Mr. Soni
served as the Executive Vice President, Chief Financial Officer and Treasurer of ARIAD Pharmaceuticals, Inc.
(“
ARIA
D
”)
, a biopharmaceutical company, from March 2016 until February 2017, when ARIAD was acquired by Takeda Pharmaceutical Company Limited. Mr. Soni continued as an employee of ARIAD through May 2017. Previously, he served as Chief Financial Officer of Pharmacyclics until its acquisition by AbbVie in May 2015, after which he supported AbbVie during the post-acquisition transition through September 2015. He first joined Pharmacyclics in September 2012 as corporate controller and served in various roles prior to being appointed as Chief Financial Officer and Treasurer in February 2014. Mr. Soni worked at ZELTIQ Aesthetics Inc.
(“
ZELTIQ
”)
, a publicly held medical technology company, from January 2012 to September 2012, where he served as Controller and Senior Director of Finance. Prior to ZELTIQ, Mr. Soni worked at PricewaterhouseC
oopers in San Jose, CA from 2007 to
2012 in the Life Sci
ence and Venture Capital Group and had previously
worked at PricewaterhouseCoopers India providing audit and assurance services. Mr. Soni graduated from Hansraj College at Delhi University in India. He is a Certified Public Accountant and completed his Chartered Accountancy from the Institute of Chartered Accountants of India.
There are no related person transactions within the meaning of Item 404(a) of Regulation S-K promulgated by the SEC between Mr. Soni and the Company required to be disclosed herein.
Kenneth A. Clark
Mr. Clark, age
59
, has been a member of the law firm Wilson Sonsini Goodrich & Rosati, P
.
C
.
(“
WSGR
”)
, since 1993. His practice has focused on strategic transactions in the biopharmaceut
ical industry for over 25 years
, and has included several of the largest partnering transactions in the industry over that period
.
Mr. Clark served on the board of directors of Pharmacyclics, Inc. from November 2012 through the sale of the company to Abbvie in May 2015.
He holds a B.A. degree from Vanderbilt University and a law degree from the University of Texas at Austin.
The Company has retained
WSGR
as legal counsel for various matters
.
The aggregate f
ees paid by the Company to WSGR for
the fiscal
year ended December 31, 201
6
were
approximately $
31
thousand
, and for the current fiscal year
,
through October 31, 2017
,
were approximately
$
466
,000
. The Company
continues to retain WSGR with respect to these matters, and
believes that the services rendered by WSGR were
, and continue to be,
provided on terms no more or less favorable th
an those with unrelated parties.
Director Compensation
Amended and Restated
Outside Director Compensation
Policy
The Company
previously
consulted with
an
independent compensation consultant regarding its outside director compensation policy relative to prevailing market data.
T
he Board made changes to its cash and equity-based compensation (the “
Outside Director Compensation Policy
”)
based on the Board’s previous reviews and findings
as follows:
Cash compensation
: Beginning
November
3
,
2017 each non-employee member of the Board will be eligible to receive the following cash compensation: (1) an annual retainer for each member of the Board of $25,000 paid in equal quarterly installments; (2) the members of
the Company’s
Audit, Compensation and Nominating and Corporate Governance Committees will be paid an additional annual retainer of $4,000 for their service on each committee
;
(3)
the Chair of the Audit, Compensation and Nominating and Corporate Governance Committees will receive annual retainers of $10,000, $8,000, and $6,000, respectively, in lieu of the member retainer; (4)
the Chairm
an of the Board will be paid an
additional annual retainer of $18,000.
In addition, the Company shall
reimburse
its
non-employee directors for all reasonable out-of-pocket expenses incurred in the performance of their duties as directors.
Equity Compensation:
Each new non-employee director
shall
receive a stock option grant to purchase
6
5
,000
shares of
the Company’s
common stock under the terms of the then in effect equity compensation plan. These initial awards will vest over three years, with one-third of the shares subject to the option vesting on the one year anniversary of the date of grant, and the remaining shares vesting monthly over the following two years, provided such non-employee director continues to serve as a director through each vesting date.
In the event of a “change in control,” the participant non-employee director will fully vest in and have the right to exercise awards as to all shares underlying such awards and all restrictions on awards will lapse, and all performance goals or other vesting criteria will be deemed achieved at 100% of target level and all other terms and conditions met, provided the non-employee director remains a director through the date of such change in control.
Compensation for
Non-Employee
Directors
Pursuant to the Outside Director Compensation Policy,
as non-employee director
s
,
Mr.
Clark, Mr.
Duggan,
Dr. Fogarty
and
Mr. Soni
will
each
receive an annual retainer of $25,000
.
Mr. Clark will receive an additional annual retainer of $
6
,000 for his service as chair and a member
of the
Nominating and Corporate Governance Committee.
Mr. Duggan
will receive an additional annual retainer of $
4
,000 for his service
as
a
member
of
the Nominating and Corporate Governance Committee and an additional
annual
retainer of $18,000 for his service as the Chairman of the Board.
Dr. Fogarty will receive an additional annual retainer of $4,000 for his service
as a member
of
the Audit Committee and an additional annual retainer of $4,000 for his service
as a member
on the
Nominating and Governance
Committee.
Mr. Soni will receive
an additional annual retainer of $
10
,000 for his
service
as chair and
a
member
of
the Audit Committee
and
an additional annual retainer of $4,000 for his service
as member
of
the Compensation Committee
.
P
ursuant to the
Outside D
irector
Compensation P
olicy,
Mr. Duggan, Dr. Fogarty, Mr. Soni, and Mr. Clark
were
each
automatically granted a
stock option to purchase
65
,000
shares of the Company’s common stock on the date of
their respective
appointment to the Board
.
Indemnification Agreement
s
Mr.
Clark, Mr. Duggan, Dr. Fogarty and Mr. Soni
will also each execute
the Company’s standard form of indemnification agreement.