SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
PROXY
STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE
ACT OF 1934 (AMENDMENT NO. )
Filed by
the Registrant
x
Filed by
a Party other than the Registrant
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Check the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to Rule 14a-11(c) or Rule
14a-12
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SENESCO
TECHNOLOGIES, INC.
(Name of
Registrant as Specified in Its Charter)
(Name of
Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
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(1)
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Amount
Previously Paid:
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Form,
Schedule or Registration Statement No.:
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SENESCO
TECHNOLOGIES, INC.
303
George Street, Suite 420
New
Brunswick, New Jersey 08901
To Our
Stockholders:
You are
cordially invited to attend the 2011 Annual Meeting of Stockholders of Senesco
Technologies, Inc. at 10:00 A.M., local time, on March 11, 2011, at the offices
of Morgan, Lewis & Bockius LLP at 101 Park Avenue, New York, NY
10178.
The
Notice of Meeting and Proxy Statement on the following pages describe the
matters to be presented at the meeting.
It is
important that your shares be represented at this meeting to assure the presence
of a quorum. Whether or not you plan to attend the meeting, we hope that you
will have your stock represented by voting
as soon as possible,
by
signing, dating and returning your proxy card in the enclosed envelope, which
requires no postage if mailed in the United States. Your stock will be voted in
accordance with the instructions you have given in your proxy.
Thank you
for your continued support.
Sincerely,
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/s/
Harlan W. Waksal, M.D.
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Harlan
W. Waksal, M.D.
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Chairman
of the Board
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SENESCO
TECHNOLOGIES, INC.
303
George Street, Suite 420
New
Brunswick, New Jersey 08901
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held March 11, 2011
The
Annual Meeting of Stockholders (the “Meeting”) of Senesco Technologies, Inc., a
Delaware corporation (the “Company”), will be held at the office of Morgan,
Lewis & Bockius, LLP at 101 Park Avenue, New York, NY 10178
on March 11, 2011, at
10:00 A.M., local time, for the following purposes. Capitalized terms are
defined in the attached proxy statement.
1.
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To
elect ten (10) directors to serve until the next Meeting of Stockholders
and until their respective successors shall have been duly elected and
qualified.
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2.
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To
approve an amendment to the Company’s 2008 Incentive Compensation Plan to
increase the shares of common stock reserved for issuance
thereunder.
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3.
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To
ratify the appointment of McGladrey & Pullen, LLP as the
Company’s independent registered public accounting firm for the fiscal
year ending June 30, 2011.
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4.
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To
transact such other business as may properly come before the Meeting or
any adjournment or adjournments
thereof.
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The
holders of common stock (the “Stockholders”) of record at the close of business
on January 31, 2011 (the “Record Date”), are entitled to notice of and to vote
at the Meeting, or any adjournment or adjournments thereof. A complete list of
such Stockholders will be open to the examination of any Stockholder at the
Company’s principal executive offices at 303 George Street, Suite 420, New
Brunswick, New Jersey 08901 for a period of ten (10) days prior to the Meeting
and at the New York offices of Morgan, Lewis & Bockius on the day of the
Meeting. The Meeting may be adjourned from time to time without notice other
than by announcement at the Meeting;
provided, however
, if the
adjournment is for more than thirty (30) days after the date of the Meeting, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting is required to be given to each
Stockholder.
IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES
YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE ENCLOSED
RETURN ENVELOPE. THE PROMPT RETURN OF PROXIES WILL ENSURE A QUORUM AND SAVE THE
COMPANY THE EXPENSE OF FURTHER SOLICITATION. EACH PROXY GRANTED MAY BE REVOKED
BY THE STOCKHOLDER APPOINTING SUCH PROXY AT ANY TIME BEFORE IT IS VOTED. IF YOU
RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT
NAMES OR ADDRESSES, EACH PROXY SHOULD BE SIGNED AND RETURNED TO ENSURE THAT ALL
OF YOUR SHARES WILL BE VOTED.
Important
Notice Regarding the Availability of
Proxy
Materials for the Annual Meeting of Stockholders to be held on March 11,
2011
Our
proxy statement is attached. Financial and other information concerning our
company is contained in our Annual Report for the fiscal year ended June 30,
2010, as amended. Pursuant to new rules promulgated by the SEC, we have elected
to provide access to our proxy materials both by sending you this full set of
proxy materials, including a proxy card, and by notifying you of the
availability of our proxy materials on the internet. This proxy statement and
our June 30, 2010 Annual Report, as amended are available on our website at
www.senesco.com
.
By
Order of the Board of Directors
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/s/
Joel Brooks
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Joel
Brooks
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Secretary
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New
Brunswick, New Jersey
February
11, 2011
SENESCO
TECHNOLOGIES, INC.
303
George Street, Suite 420
New
Brunswick, New Jersey 08901
This
proxy statement is furnished in connection with the solicitation by the board of
directors, or the board, of Senesco Technologies, Inc., a Delaware corporation,
referred to herein as the Company, Senesco, we, us or our, of proxies to be
voted at our annual meeting of stockholders to be held on March 11, 2011,
referred to herein as the Meeting, at the offices of Morgan Lewis & Bockius,
LLP at 101 Park Avenue, New York, NY 10178, at 10:00 A.M., local time, and at
any adjournment or adjournments thereof. The holders of record of our common
stock, $0.01 par value per share, also referred to herein as common stock, as of
the close of business on January 31, 2011, also referred to herein as the Record
Date, will be entitled to notice of and to vote at the Meeting and any
adjournment or adjournments thereof. As of the Record Date, there were
74,766,236 shares of our common stock issued and outstanding and entitled to
vote. Each share of our common stock is entitled to one (1) vote on any matter
presented at the Meeting.
If
proxies in the accompanying form are properly voted and received, the shares of
our common stock represented thereby will be voted in the manner specified
therein. If not otherwise specified, the shares of our common stock represented
by the proxies will be voted:
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1.
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FOR
the election of the ten (10) nominees named below as
directors;
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2.
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FOR
the approval of an amendment to the Company’s 2008 Incentive Compensation
Plan to increase the number of shares of common stock reserved for
issuance thereunder;
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3.
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FOR
the ratification of the appointment of McGladrey & Pullen, LLP as
our independent registered public accounting firm for the fiscal year
ending June 30, 2011; and
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4.
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In
the discretion of the persons named in the enclosed form of proxy, on any
other proposals which may properly come before the Meeting or any
adjournment or adjournments
thereof.
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Any
stockholder who has submitted a proxy may revoke it at any time before it is
voted, by written notice addressed to and received by our Corporate Secretary,
by submitting a duly executed proxy bearing a later date or by electing to vote
in person at the Meeting. The mere presence at the Meeting of the person
appointing a proxy does not, however, revoke the appointment.
The
presence, in person or by proxy, of holders of shares of our common stock having
a majority of the votes entitled to be cast at the Meeting shall constitute a
quorum. The affirmative vote by the holders of a plurality of the shares of our
common stock represented at the Meeting is required for the election of
directors (Proposal 1), provided a quorum is present in person or by proxy.
Provided a quorum is present in person or by proxy, Proposals 2 and 3
require the affirmative vote of our stockholders representing a majority of the
votes cast by holders of shares present, or represented by proxy, and entitled
to vote thereon.
Abstentions
are included in the shares present at the Meeting for purposes of determining
whether a quorum is present, and are counted as a vote against for purposes of
determining whether any of the foregoing proposals are approved. Broker
non-votes are when shares are represented at the Meeting by a proxy specifically
conferring only limited authority to vote on certain matters and no authority to
vote on other matters. Therefore, broker non-votes are included in the
determination of the number of shares represented at the Meeting for purposes of
determining whether a quorum is present but are not counted for purposes of
determining whether a proposal has been approved in matters where the proxy does
not confer the authority to vote on such proposal. In this year’s vote, brokers
are entitled to vote without instructions on Proposal 3, but not on Proposals 1
and 2. Accordingly, broker non-votes are not counted as a vote against and will
not affect the outcome of Proposals 1 and 2.
Your vote
is very important. All properly executed proxy cards delivered pursuant to this
solicitation and not revoked will be voted at the Meeting in accordance with the
directions given. In voting by proxy with regard to the election of directors,
you may vote in favor of all nominees, withhold your votes as to all nominees or
withhold your votes as to specific nominees. With regard to other proposals, you
may vote in favor of each proposal or against each proposal, or in favor of some
proposals and against others or you may abstain from voting on any or all
proposals. You should specify your respective choices on the proxy card. If you
do not give specific instructions with regard to the matters to be voted upon,
the shares of common stock represented by your signed proxy card will be voted
in accordance with the board of directors’ recommendation with respect to
Proposals 1 through 3. If any other matters properly come before the Meeting,
the persons named as proxies will vote for or against these matters according to
their best judgment. We strongly encourage you to submit your voting
instructions and exercise your right to vote as a stockholder.
You may
revoke your proxy and reclaim your right to vote up to and including the day of
the Meeting by giving written notice to the Secretary of Senesco, by delivering
a proxy card dated after the date of the proxy or by voting in person at the
Meeting. All written notices of revocation and other communications with respect
to revocations of proxies should be addressed to: Secretary, Senesco
Technologies, Inc., 303 George Street, Suite 420, New Brunswick, New Jersey
08901.
On or
about February 11, 2011, this proxy statement, together with the related proxy
card, is being mailed to our stockholders of record as of the Record Date. Our
annual report to our stockholders for the fiscal year ended June 30, 2010, as
amended, including our financial statements, is being mailed together with this
proxy statement to all of our stockholders of record as of the Record Date. In
addition, we have provided brokers, dealers, banks, voting trustees and their
nominees, at our expense, with additional copies of our annual report so that
our record holders could supply these materials to our beneficial owners as of
the Record Date.
Our
common stock is listed on the NYSE Amex under the symbol “SNT”. On January 31,
2011, the Record Date, the closing price for the common stock as reported by
NYSE Amex was $0.28 per share.
PROPOSAL
1
ELECTION
OF DIRECTORS
At the
Meeting, nine (9) directors are to be elected, which number shall constitute our
entire board, to hold office until the next annual meeting of stockholders or
until their successors shall have been duly elected and qualified.
Unless
otherwise specified in the proxy, it is the intention of the persons named in
the enclosed form of proxy to vote the stock represented thereby for the
election as directors, each of the nominees whose names and biographies appear
below. All of the nominees whose names and biographies appear below are at
present our directors. In the event any of the nominees should become
unavailable or unable to serve as a director, it is intended that votes will be
cast for a substitute nominee designated by our board. Our board has no reason
to believe that the nominees named will be unable to serve if elected. Each
nominee has consented to being named in this proxy statement and to serve if
elected.
The
following are the nominees for election to our board, and all of these nominees
are current members of our board:
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Served
as
a
Director
Since
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Harlan
W. Waksal, M.D.
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58
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2008
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Chairman
of the Board and Director
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David
Rector
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64
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2002
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Lead
Director
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Jack
Van Hulst
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71
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2007
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Director
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John
N. Braca
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53
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2003
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Director
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Christopher
Forbes
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60
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1999
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Director
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Warren
J. Isabelle
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59
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2009
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Director
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Thomas
C. Quick
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55
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1999
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Director
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Rudolf
Stalder
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70
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1999
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Director
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Leslie
J. Browne, Ph.D.
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60
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-
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President
and Chief Executive Officer
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John
E. Thompson, Ph.D.
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69
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2001
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Executive
Vice President, Chief Scientific Officer and
Director
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The
principal occupations and business experience, for at least the past five (5)
years, of each director and nominee is as follows:
Harlan W. Waksal, M.D.
has
been our chairman of the board of directors since June 2009 and a director since
October 2008. From July 2003 to present, Dr. Waksal has been the President and
Sole Proprietor of Waksal Consulting L.L.C., which provides strategic business
and clinical development counsel to biotechnology companies. Dr. Waksal
co-founded the biotechnology company ImClone Systems Inc. in 1984. From March
1987 through July 2003, Dr. Waksal had served in various senior roles for
ImClone Systems Inc. as follows: March 1987 through April 1994 – President;
April 1994 through May 2002 – Executive Vice President and Chief Operating
Officer; May 2002 through July 2003 – President, Chief Executive Officer and
Chief Operating Officer. Dr. Waksal also served as a director of ImClone Systems
Inc. from March 1987 through January 2005. Dr. Waksal is currently a member of
the Board of Trustees of Oberlin College. Dr. Waksal received a Bachelor of Arts
in Biology from Oberlin College and an M.D. from Tufts University School of
Medicine. Dr. Waksal is knowledgeable in science, drug development, regulatory
and clinical affairs. In addition, he ran and operated a public biotechnology
company and is familiar with the issues of corporate
governance.
David Rector
has been our
director since February 2002. Mr. Rector also serves as a director and member of
the compensation and audit committee of the Dallas Gold and Silver Exchange
(formerly Superior Galleries, Inc.) Mr. Rector also serves on the board of
directors of Nevada Gold Holdings, Inc., Standard Drilling, Inc., US Uranium,
Inc., California Gold Corp. and Li3 Energy, Inc. Since October 2009 through
present, Mr. Rector has served as President and CEO of Li3 Energy, Inc. Since
July 2009 through present, Mr. Rector has served as President and CEO of Nevada
Gold Holdings, Inc. From September 2008 through November 2010, Mr. Rector served
as President and CEO Universal Gold Mining Corp. Since October 2007 through
present, Mr. Rector has served as President and CEO of Standard Drilling, Inc.
From May 2004 through December 2006, Mr. Rector had served in senior
management positions with Nanoscience Technologies, Inc., a development stage
company engaged in the development of DNA Nanotechnology. Also, since 1985, Mr.
Rector has been the Principal of The David Stephen Group, which provides
enterprise consulting services to emerging and developing companies in a variety
of industries. From 1983 until 1985, Mr. Rector served as President and General
Manager of Sunset Designs, Inc., a domestic and international manufacturer and
marketer of consumer product craft kits, and a wholly-owned subsidiary of
Reckitt & Coleman N.A. From 1980 until 1983, Mr. Rector served as the
Director of Marketing of Sunset Designs. From 1971 until 1980, Mr. Rector served
in progressive roles in the financial and product marketing departments of Crown
Zellerbach Corporation, a multi-billion dollar pulp and paper industry
corporation. Mr. Rector received a Bachelor of Science degree in
Business/Finance from Murray State University in 1969. As a result of these
professional and other experiences, Mr. Rector has a deep business understanding
of developing companies. Mr. Rector also brings corporate governance experience
through his service on other company boards.
Jack Van Hulst
has been our
director since January 2007. Mr. Van Hulst was appointed as our President and
Chief Executive Officer effective November 16, 2009. Mr. Van Hulst was further
appointed as our Secretary effective February 1, 2010. Mr. Van Hulst resigned as
our President and Chief Executive Officer and Secretary effective May 25, 2010.
Since June 2010, Mr. Van Hulst has been a general partner of SK Capital
Partners. Mr. Van Hulst also serves as a director and member of the compensation
and audit committees of HiTech Pharmacal, Inc. He has more than 42 years of
international experience in the pharmaceutical industry. He began his career in
1968 at Organon, which was subsequently acquired by AKZO, N.V., the
multinational human and animal healthcare company, where he was based in Europe
and the US and responsible for establishing AKZO’s position in the US in the
manufacturing and sales and marketing of fine chemicals. Mr. Van Hulst later
became President of AKZO’s US Pharmaceutical Generic Drug Business and was
responsible for establishing AKZO in the US generic drug industry. From 1989 to
1999, Mr. Van Hulst successively owned and led two generic pharmaceutical
companies, improving their operations and then selling them to a private equity
group and a pharmaceutical company. From 1999 to 2005, he was Executive Vice
President at Puerto Rico-based MOVA Pharmaceutical Corporation, a contract
manufacturer to the pharmaceutical industry that recently merged with
Canadian-based Patheon. Mr. Van Hulst also serves as Chairman of the Board of
The International Center in New York, a non-profit organization. Mr. Van Hulst
received a Masters degree in law from the University in Utrecht, Netherlands in
1968. Mr. Van Hulst possesses management experience as a result of his prior
positions. Mr. Van Hulst spent years holding a number of management roles at
other pharmaceutical companies and this experience assists the Company in
working though the similar issues that it may face in its own
operations.
John N. Braca
has been our
director since October 2003. Mr. Braca has also served as a director and board
observer for other healthcare, technology and biotechnology companies over the
course of his career. Mr. Braca currently serves as a director of Nevada Gold
Holdings, Inc. Since August 2010, Mr. Braca has been the controller for Iroko
Pharmaceuticals, a privately-held global pharmaceutical company based in
Philadelphia. From April 2006 through July 2010, Mr. Braca was the managing
director of Fountainhead Venture Group, a healthcare information technology
venture fund based in the Philadelphia area, and has been working with both
investors and developing companies to establish exit and business development
opportunities. From May 2005 through March 2006, Mr. Braca was a consultant and
advisor to GlaxoSmithKline management in their research operations. From 1997 to
April 2005, Mr. Braca was a general partner and director of business investments
for S.R. One, Limited, or S.R. One, the venture capital subsidiary of
GlaxoSmithKline. In addition, from January 2000 to July
2003, Mr. Braca was a
general partner of Euclid SR Partners Corporation, an independent venture
capital partnership. Prior to joining S.R. One, Mr. Braca held various finance
and operating positions of increasing responsibility within several subsidiaries
and business units of GlaxoSmithKline. Mr. Braca is a licensed Certified Public
Accountant in the state of Pennsylvania and is affiliated with the American
Institute of Certified Public Accountants and the Pennsylvania Institute of
Certified Public Accountants. Mr. Braca received a Bachelor of Science in
Accounting from Villanova University and a Master of Business Administration in
Marketing from Saint Joseph’s University. Mr. Braca’s financial background,
operating experience with both large pharmaceutical companies and developing
biotechnology companies, provides the board with practical experience for issues
facing the Company. In addition, Mr. Braca also has a strong corporate
governance background through his experience with other company
boards.
Christopher Forbes
has been
our director since January 1999. Since 1989, Mr. Forbes has been Vice Chairman
of Forbes, Inc., which publishes Forbes Magazine and Forbes.com. From 1981 to
1989, Mr. Forbes was Corporate Secretary at Forbes. Prior to 1981, he held the
position of Vice President and Associate Publisher. Mr. Forbes has been a
director of Forbes, Inc. since 1977. Mr. Forbes is the Chairman of the American
Friends of the Louvre, and he also sits on the boards of The Friends of New
Jersey State Museum, The New York Academy of Art, and the Prince Wales
Foundation. He is also a member of the board of advisors of The Princeton
University Art Museum. Mr. Forbes received a Bachelor of Arts degree in Art
History from Princeton University in 1972. In 1986, he was awarded the honorary
degree of Doctor of Humane Letters by New Hampshire College and in 2003 was
appointed a Chevalier of the Legion of Honor by the French Government. Mr.
Forbes’s knowledge regarding corporate operations as well as his business
acumen, provide the board with experience in running a corporation and
addressing the issues that face a growing company, such as
ours.
Warren J. Isabelle
has been
our director since June 2009. Mr. Isabelle is a founder and principal of
Ironwood Investment Management L.L.C., located in Boston, MA. Mr. Isabelle
founded Ironwood Investment Management L.L.C in August 1997. From 1983 until
1997, Mr. Isabelle was with Pioneer Management Corporation where he served most
recently as Director of Research and Head of U.S. Equities. Mr. Isabelle has
also, since January 2004, served as a member of the Public Board and
Vice-Chairman of the Investment Committee of the University of Massachusetts
Foundation. Mr. Isabelle is a Chartered Financial Analyst and member of the CFA
institute and the American Chemical Society. Mr. Isabelle received a Bachelor of
Science degree in chemistry from Lowell Technological Institute, a Master of
Science degree in Polymer Science and Engineering from the University of
Massachusetts, and a MBA from the Wharton School, University of Pennsylvania.
Mr. Isabelle’s experience as an investment analyst and portfolio manager
provides the Company with valuable insight into the biotechnology industry and
the publicly-traded capital markets.
Thomas C. Quick
has been our
director since February 1999. Since 2003, Mr. Quick has been the President of
First Palm Beach Properties, Inc. From 2001 through 2003, Mr. Quick was the Vice
Chairman of Quick & Reilly/Fleet Securities, Inc., successor to The Quick
& Reilly Group, Inc., a holding company for four (4) major financial
services businesses. From 1996 until 2001, Mr. Quick was the President and Chief
Operating Officer and a director of Quick & Reilly/Fleet Securities, Inc.
From 1985 to 1996, he was President of Quick & Reilly, Inc., a Quick &
Reilly subsidiary and a national discount brokerage firm. Mr. Quick serves as a
member of the board of directors and compensation committee of B.F. Enterprises.
He is also a member of the board of directors of Best Buddies, The American
Ireland Fund and Venetian Heritage, Inc. He is a trustee of the National
Corporate Theater Fund, Cold Spring Harbor Laboratories, the Norton Museum and
the Inter-City Scholarship Foundation of New York City. Mr. Quick is a graduate
of Fairfield University. As a result of his professional and other experiences,
Mr. Quick has a deep understanding of corporate operations and strategy, and
operations in both the US and internationally. Mr. Quick also has significant
corporate governance experience through his service on other company
boards.
Rudolf Stalder
has been
our director since
February 1999 and was appointed as our Chairman and Chief Executive Officer on
January 10, 2000. On October 4, 2001, Mr. Stalder resigned as our Chief
Executive Officer. On June 8, 2009, Mr. Stalder resigned as our Chairman. Mr.
Stalder
is a former
member of the executive boards of Credit Suisse Group and Credit Suisse First
Boston and former Chief Executive Officer of the Americas Region of Credit
Suisse Private Banking. Mr. Stalder joined Credit Suisse in 1980 as a founding
member and Deputy Head of the Multinational Services Group. In 1986, he became
Executive Vice President. He was named to Credit Suisse’s Executive Board in
1989. In 1990, he became Head of the Commercial Banking Division and a Member of
the Executive Committee. From 1991 to 1995, Mr. Stalder was Chief Financial
Officer of Credit Suisse First Boston and a Member of the Executive Boards of
Credit Suisse Group and Credit Suisse First Boston. He became head of the
Americas Region of Credit Suisse Private Banking in 1995 and retired in 1998.
Prior to moving to the United States, Mr. Stalder was a member of the Board of
Directors for several Swiss subsidiaries of major corporations including AEG,
Bayer, BTR, Hoechst, Saint Gobain, Solvay and Sony. He is a fellow of the World
Economic Forum. He currently serves on the board of the Greater Bridgeport
Symphony. He was a member of the Leadership Committee of the Consolidated
Corporate Fund of Lincoln Center for the Performing Arts, Board of The American
Ballet Theatre and a Trustee of Carnegie Hall. From 1991 through 1998, Mr.
Stalder was Chairman of the New York Chapter of the Swiss-American Chamber of
Commerce. He continues to serve as an advisory board member of the
American-Swiss Foundation. Mr. Stalder received a diploma in advanced finance
management at the International Management Development Institute in Lausanne,
Switzerland in 1976. He completed the International Senior Managers Program at
Harvard University in 1985. Mr. Stalder is an experienced executive with former
CEO experience and senior executive level experience at large multinational
companies. He also has corporate governance experience through service on other
public company boards.
Leslie J. Browne, Ph.D.
was
appointed our President and Chief Executive Officer in May 2010. Dr. Browne has
over 30 years of experience in the pharmaceutical industry. Prior to joining
Senesco in May 2010, he served from October 2008 to May 2010 as President and
CEO, and is currently chair, of Phrixus Pharmaceuticals, Inc., a private biotech
working on muscular dystrophy and heart failure. He recently served from January
2007 to January 2009 as chair of the New Jersey Technology Council, where he
continues as a member of the board. He also served from April 2007 to January
2009 as an independent director of Genelabs Technologies, which was sold to GSK,
and from September 2004 to May 2008 as President, CEO and Director of
Pharmacopeia, a Nasdaq listed company, where he transformed the company from a
discovery contract research organization to a clinical development stage
biopharmaceutical company with multiple internal development programs. Prior to
joining Pharmacopeia, Dr. Browne was the Chief Operating Officer at Iconix
Pharmaceuticals, Inc., a privately-held chemogenomics company from October 2001
to July 2004. Before Iconix, Dr. Browne held key positions at Berlex/Schering AG
from 1990 to 2000, including Corporate Vice President, Berlex Laboratories, Inc.
and President of Schering Berlin Venture Corporation. In 1979, Dr. Browne began
his industrial career at Ciba-Geigy, now Novartis, where he invented fadrozole,
for the treatment of breast cancer and was closely involved in the discoveries
of Femara
â
and
Diovan
â
, which became
major products for Novartis. Dr. Browne received his Bachelor of Science degree
in Chemistry in 1972 from the University of Strathclyde, Glasgow Scotland. He
received his Ph.D. in Organic Chemistry in 1978 from the University of Michigan
and his postdoctoral training as a National Institutes of Health Postdoctoral
Fellow at Harvard University from January 1978 to April 1979. Dr. Browne is an
experienced executive with former CEO experience and senior executive level
experience at large multinational, as well as development stage, life sciences
companies. He also has corporate governance experience through service on boards
of other companies and organizations. Dr. Browne’s educational background also
provides him with the tools necessary to understand the science underlying our
technology and how it relates to human health and agricultural
applications.
John E. Thompson, Ph.D.
has
been our director since October 2001. Dr. Thompson was appointed our President
and Chief Executive Officer in January 1999, and he continued in that capacity
until September 1999 when he was appointed Executive Vice President of Research
and Development. In July 2004, Dr. Thompson became our Executive Vice President
and Chief Scientific Officer. Dr. Thompson is the inventor of the technology
that we develop. Since July 2001, he has been the Associate Vice President,
Research and, from July 1990 to June 2001, he was the Dean of Science at the
University of Waterloo in Waterloo, Ontario, Canada. Dr. Thompson has a Ph.D. in
Biology from the University of Alberta, Edmonton, and he is a Fellow of the
Royal Society of Canada. Dr. Thompson is also the recipient of a Lady Davis
Visiting Fellowship, the Sigma Xi Award for Excellence in Research, the CSPP
Gold Medal and the Technion Visiting Fellowship. Dr. Thompson has an in-depth
knowledge and understanding of the science underlying our technology and how it
relates to human health and agricultural applications.
Director Experience,
Qualifications, Attributes and Skills
We
believe that the backgrounds and qualifications of our directors, considered as
a group, should provide a composite mix of experience, knowledge and abilities
that will allow the board to fulfill its responsibilities. The board is composed
of a diverse group of leaders in their respective fields. Many of the current
directors have leadership experience at major domestic and international
companies with operations inside and outside the United States, which provides
an understanding of different business processes, challenges and strategies.
Other directors have prior experience as former executive officers of other
entities, which brings unique perspectives to the board. Further, the Company’s
directors also have other experience that makes them valuable members, such as
prior public policy or regulatory experience that provides insight into issues
faced by companies.
OUR
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF
THE
NOMINEES TO THE BOARD OF DIRECTORS.
Board
Leadership Structure and Role in Risk Oversight
The board
evaluates its leadership structure and role in risk oversight on an ongoing
basis. In March 2010, the Company’s board leadership structure separated the
Chairman of the Board, the Chief Executive Officer and the Lead Director roles
into three positions. Currently, Harlan W. Waksal, M.D. is the Chairman of the
Board, Leslie J. Browne Ph.D. is the Chief Executive Officer and David Rector is
the Lead Director. The board determines what leadership structure it deems
appropriate based on factors such as the experience of the applicable
individuals, the current business environment of the Company or other relevant
factors. In his capacity as Lead Director, Mr. Rector consults
independently of the Chairman of the Board with other members of the board in
matters that are presented for the independent board member’s consideration.
After considering these factors, the board determined that continuing to
separate the positions of Chairman of the Board, Lead Director and Chief
Executive Officer is the appropriate board leadership structure at this
time.
The board
is also responsible for oversight of the Company’s risk management practices
while management is responsible for the day-to-day risk management processes.
This division of responsibilities is the most effective approach for addressing
the risks facing the Company, and the Company’s board leadership structure
supports this approach. The board receives periodic reports from management
regarding the most significant risks facing the Company. In addition, the Audit
Committee assists the board in its oversight role by receiving periodic reports
regarding the Company’s risk and control environment.
Corporate
Governance Guidelines
Our board
has long believed that good corporate governance is important to ensure that we
are managed for the long-term benefit of our stockholders. During the past year,
our board has continued to review our governance practices in light of the
Sarbanes-Oxley Act of 2002, the new rules and regulations of the Securities and
Exchange Commission and the new listing standards, policies and requirements of
NYSE Amex.
Our board
has adopted corporate governance guidelines to assist it in the exercise of its
duties and responsibilities and to serve the best interests of Senesco and its
stockholders. These guidelines, which provide a framework for the conduct of our
board’s business, include that:
|
·
|
the
principal responsibility of the directors is to oversee the management of
Senesco;
|
|
·
|
a
majority of the members of our board shall be independent
directors;
|
|
·
|
the
independent directors met regularly in executive
session;
|
|
·
|
directors
have full and free access to management and, as necessary and appropriate,
independent advisors;
|
|
·
|
new
directors participate in an orientation program and all directors are
expected to participate in continuing director education on an ongoing
basis; and
|
|
·
|
at
least annually, our board and its committees will conduct a
self-evaluation to determine whether they are functioning
effectively.
|
Board
Determination of Independence
Under the
current rules set forth in the NYSE Amex Company Guide, a director will, among
other things, qualify as an “independent director” if, in the determination of
our board, that person does not have a relationship that would interfere with
his or her exercise of independent judgment in carrying out the responsibilities
of a director. Our board currently consists of Rudolf Stalder, John E. Thompson,
Ph.D., John N. Braca, Christopher Forbes, Warren J. Isabelle, Thomas C. Quick,
David Rector, Jack Van Hulst and Harlan W. Waksal, M.D. We are currently traded
on the NYSE Amex, which requires our board be comprised of a majority of
independent directors. Our board has determined that each of Messrs. Stalder,
Braca, Forbes, Isabelle, Quick and Rector is an “independent director” as
defined under Section 803 of the NYSE Amex Company Guide.
Committees
and Meetings of our Board of Directors
Our board
held fourteen (14) meetings during Fiscal 2010. Throughout this period, except
for Mr. Quick, each member of our board attended or participated in at least 75%
of the aggregate of the total number of meetings of our board held during the
period for which such person has been a director, and the total number of
meetings held by all committees of our board on which each the director served
during the periods the director served. Our board has three standing committees:
the Compensation Committee, the Audit Committee, and the Nominating and
Corporate Governance Committee. From time to time, our board may form additional
committees on a short-term basis, such as a Finance Committee to review the
Company’s financing activities and an Executive Committee to review certain of
the Company’s significant developments. Each standing committee operates under a
charter that has been approved by our board. Each of these charters are also
posted on our website at www.senesco.com. Our corporate governance guidelines
provide that directors are expected to attend the annual meeting of
stockholders. All directors, except Mr. Stalder who could not attend for medical
reasons, attended the 2010 annual meeting of stockholders.
Compensation
Committee
. Our Compensation Committee was established in July 1999,
pursuant to the Compensation Committee Charter. Our Compensation Committee
generally makes recommendations concerning salaries and incentive compensation
for our management and our employees. The primary responsibilities of our
Compensation Committee, as more fully set forth in the Compensation Committee
Charter adopted in July 1999 and amended and restated on June 27, 2008,
include:
|
·
|
annually
reviewing and approving, or recommending for approval by our board, the
corporate goals and objectives relevant to executive officer
compensation;
|
|
·
|
reviewing
and approving, or recommending for approval by our board, the salaries and
incentive compensation of our executive
officers;
|
|
·
|
preparing
the Compensation Committee report, including the Compensation Discussion
and Analysis;
|
|
·
|
administering
our 2008 Incentive Compensation Plan, or similar stock plan adopted by our
stockholders; and
|
|
·
|
reviewing
and making recommendations to our board with respect to director
compensation.
|
Our
Compensation Committee is currently comprised of David Rector and John. N.
Braca
.
Mr.
Waksal also served on the Compensation Committee during Fiscal 2010 until he
resigned from such position in February 2010. Mr. Rector currently serves as the
chairman of the Compensation Committee. All members of our Compensation
Committee are considered independent pursuant to Section 803 of the NYSE Amex
Company Guide. Our Compensation Committee held nine (9) meetings during Fiscal
2010.
Compensation Committee
Interlocks and Insider Participation
No member
of the Compensation Committee is or has been an officer or employee of our
company or any of our subsidiaries. In addition, no member of the Compensation
Committee had any relationships with us or any other entity that requires
disclosure under the proxy rules and regulations promulgated by the SEC and none
of our executive officers served on the Compensation Committee or board of any
company that employed any member of our board.
Audit Committee
. Our
Audit Committee was established in July 1999. On June 27, 2008, our board
adopted an Amended and Restated Audit Committee Charter. The primary
responsibilities of our Audit Committee include:
|
·
|
appointing,
approving the compensation of, and assessing the independence of our
independent registered public accounting
firm;
|
|
·
|
overseeing
the work of our independent registered public accounting firm, including
through the receipt and consideration of certain reports from our
independent registered public accounting
firm;
|
|
·
|
reviewing
and discussing with management and our independent registered public
accounting firm our annual and quarterly financial statements and related
disclosures;
|
|
·
|
monitoring
our internal control over financial reporting, disclosure controls and
procedures and code of business conduct and
ethics;
|
|
·
|
discussing
our risk management policies;
|
|
·
|
establishing
policies regarding hiring employees from our independent registered public
accounting firm and procedures for the receipt and retention of accounting
related complaints and concerns;
|
|
·
|
meeting
independently with our independent registered public accounting firm and
management; and
|
|
·
|
preparing
the audit committee report required by SEC
rules.
|
Our Audit
Committee is currently comprised of John N. Braca, David Rector and Rudolf
Stalder. Mr. Van Hulst also served on the Audit Committee during Fiscal 2010
until he resigned from such position in November 2009. Mr. Braca currently
serves as the chairman of the Audit Committee. The NYSE Amex currently requires
an Audit Committee comprised solely of independent directors. Messrs. Braca,
Rector and Stalder are “independent” members of our board as defined in Rule
10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange
Act, and Section 803 of the NYSE Amex Company Guide. In addition, our board of
directors has determined that Mr. Braca satisfies the definition of an audit
committee “financial expert” as set forth in Item 407(d) (5) of Regulation S-K
promulgated by the SEC. Our Audit Committee held six (6) meetings during Fiscal
2010.
Review and Approval of
Related Person Transactions
Our Audit
Committee Charter requires that our Audit Committee review and approve or ratify
transactions involving us and any executive officer, director, director nominee,
5% stockholder and certain of their immediate family members, also referred to
herein as a related person. The policy and procedures cover any transaction
involving a related person, also referred to herein as a related person
transaction, in which the related person has a material interest and which does
not fall under an explicitly stated exception set forth in the applicable
disclosure rules of the SEC.
A related
person transaction will be considered approved or ratified if it is authorized
by the Audit Committee after full disclosure of the related person’s interest in
the transaction. In considering related person transactions, the Audit Committee
will consider any information considered material to investors and the following
factors:
|
·
|
the
related person’s interest in the
transaction;
|
|
·
|
the
approximate dollar value of the
transaction;
|
|
·
|
whether
the transaction was undertaken in the ordinary course of our
business;
|
|
·
|
whether
the terms of the transaction are no less favorable to us than terms that
we could have reached with an unrelated third party;
and
|
|
·
|
the
purpose and potential benefit to us of the
transaction.
|
Nominating and Corporate
Governance Committee
. The primary responsibilities of our Nominating and
Corporate Governance Committee, as more fully set forth in the Nominating and
Corporate Governance Committee Charter and Corporate Governance Guidelines
adopted on October 15, 2004, and amended and restated on June 27, 2008
include:
|
·
|
identifying
individuals qualified to become our board
members;
|
|
·
|
evaluating
and recommending to our board the persons to be nominated for election as
directors at any meeting of stockholders and to each of our board’s
committees;
|
|
·
|
reviewing
and making recommendations to our board with respect to management
succession planning;
|
|
·
|
developing
and recommending to our board a set of corporate governance principles
applicable to Senesco; and
|
|
·
|
overseeing
the evaluation of our board.
|
Our
Nominating and Corporate Governance Committee was formed on September 29, 2004,
and it is currently comprised of Messrs. Stalder, Forbes and Quick. Mr. Forbes
currently serves as the chairman of the Nominating and Corporate Governance
Committee. All members of our Nominating and Corporate Governance Committee are
independent, as independence for nominating and corporate governance committee
members is defined under Section 803 of the NYSE Amex Company Guide. The
Nominating and Corporate Governance Committee had one (1) meeting during Fiscal
2010.
The
Nominating and Corporate Governance Committee does not have a specific policy
with regard to the consideration of diversity in identifying director nominees.
The Nominating and Corporate Governance Committee considers the diversity of the
professional experience, education and skill set in identifying the director
nominees.
Code of Business Ethics and
Conduct
. On March 17, 2003, our board adopted a Code of Business
Ethics and Conduct, which may also be found on our website at
www.senesco.com. Our Code of Ethics contains written standards designed to
deter wrongdoing and to promote:
|
·
|
honest
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships;
|
|
·
|
full,
fair, accurate, timely, and understandable disclosure in reports and
documents filed with the SEC and in other public communications made by
the Company;
|
|
·
|
compliance
with applicable governmental laws, rules and
regulations;
|
|
·
|
the
prompt internal reporting of violations of our Code of Ethics to an
appropriate person or persons identified in our Code of Ethics;
and
|
|
·
|
accountability
for adherence to our Code of
Ethics.
|
Each of
our employees, officers and directors completed a signed certification to
document his or her understanding of and compliance with our Code of
Ethics.
Director
Candidates
The
process followed by our Nominating and Corporate Governance Committee to
identify and evaluate director candidates includes requests to board members and
others for recommendations, meetings from time to time to evaluate biographical
information and background material relating to potential candidates and
interviews of selected candidates by members of the committee and the
board.
In
considering whether to recommend any particular candidate for inclusion in the
board’s slate of recommended director nominees, our Nominating and Corporate
Governance Committee will apply the criteria contained in the committee’s
charter. These criteria include the candidate’s integrity, business acumen,
knowledge of our business and industry, age, experience, diligence, conflicts of
interest and the ability to act in the interests of all stockholders. Our
Nominating and Corporate Governance Committee does not assign specific weights
to particular criteria and no particular criterion is a prerequisite for each
prospective nominee. In addition, although we do not have a formal diversity
policy, we review diversity as one of the criteria for nomination. We believe
that the backgrounds and qualifications of our directors, considered as a group,
should provide a composite mix of experience, knowledge and abilities that will
allow the board to fulfill its responsibilities.
Stockholders
may recommend individuals to our Nominating and Corporate Governance Committee
for consideration as potential director candidates by submitting their names,
together with appropriate biographical information and background materials and
a statement as to whether the stockholder or group of stockholders making the
recommendation has beneficially owned more than $2,000 in market value, or 1%,
of our common stock for at least one (1) year as of the date such recommendation
is made, to: Nominating and Corporate Governance Committee, c/o Corporate
Secretary, Senesco Technologies, Inc., 303 George Street, Suite 420, New
Brunswick, New Jersey 08901. Assuming that appropriate biographical and
background material has been provided on a timely basis, the committee will
evaluate stockholder-recommended candidates by following substantially the same
process, and applying substantially the same criteria, as it follows for
candidates submitted by others.
Communicating
with our Independent Directors
Our board
will give appropriate attention to written communications that are submitted by
stockholders, and will respond if and as appropriate. The Lead Director, with
the assistance of our outside counsel, is primarily responsible for monitoring
communications from our stockholders and for providing copies or summaries to
the other directors as he considers appropriate. Communications are forwarded to
all directors if they relate to important substantive matters and include
suggestions or comments that the Lead Director considers to be important for the
directors to know. In general, communications relating to corporate governance
and long-term corporate strategy are more likely to be forwarded than
communications relating to ordinary business affairs, personal grievances and
matters as to which we tend to receive repetitive or duplicative
communications.
Stockholders
who wish to send communications on any topic to our board should address such
communications to: Board of Directors, c/o Corporate Secretary, Senesco
Technologies, Inc., 303 George Street, Suite 420, New Brunswick, New Jersey
08901. Our Corporate Secretary will forward such communications to our Lead
Director, with a copy to the Chairman of our board.
Compensation
of Directors
We use a
combination of cash and equity-based compensation to attract and retain
qualified individuals to serve on our board. Dr. Thompson has received
compensation for providing research and development management services to us
and does not receive any additional compensation for his services as a board
member. See “Certain Relationships and Related Transactions” which sets forth
the details of the compensation for Dr. Thompson.
Equity
Grants Fiscal 2010:
We do not
automatically grant options or other equity to our board. Our Compensation
Committee reviews the equity program each year with its compensation consultant
and determines the appropriate level of the equity awards.
In
October 2010, the Committee granted the following options to the directors
(other than Dr. Thompson) for their service during Fiscal 2010. Such grants
became effective on November 17, 2010, which was two (2) trading days after we
filed our quarterly report on Form 10-Q for the quarter ended September 30,
2010:
Director
|
|
Total
# of Options
Granted
|
|
Harlan
W. Waksal, M.D.
|
|
200,000
|
|
Rudolf
Stalder
|
|
100,000
|
|
Christopher
Forbes
|
|
125,000
|
|
Thomas
C. Quick
|
|
100,000
|
|
John
N. Braca
|
|
150,000
|
|
David
Rector
|
|
150,000
|
|
Jack
Van Hulst(1)
|
|
100,000
|
|
Warren
J. Isabelle
|
|
100,000
|
|
|
(1)
|
Mr.
Van Hulst was employed by the Company as its chief executive officer from
November 16, 2009 through May 24, 2010; the options were granted in
connection with his service as a board
member.
|
Such
grants vest as follows: one-half (1/2) upon the date of grant and the remaining
one-half (1/2) will vest one (1) year from the date of grant, subject to
continued board service through the vesting date. .
Additionally,
in October 2010, the Committee granted an additional 500,000 options to Harlan
W. Waksal, M.D. for his commitment, leadership and individual performance during
Fiscal 2010. Such grant also became effective on November 17, 2010, which was
two (2) trading days after we file our quarterly report on Form 10-Q for the
quarter ended September 30, 2010. Twenty-five percent (25%) of such options
shall vest on the first anniversary of the date of grant and one-thirty-six of
such grant each month thereafter, subject to continued board service through
each vesting date.
Cash
Compensation
Commencing
in Fiscal 2009, after review and consultation with the Compensation Committee’s
compensation consultant, we implemented a new cash compensation plan for our
directors pursuant to which we pay each director (other than Dr. Thompson) cash
compensation as consideration for their service on our board for each fiscal
year as follows:
Annual
(Base) Retainer
|
|
$
|
10,000
|
|
Per
Scheduled Board Meeting Fee
|
|
$
|
1,500
|
(1)
|
Per
Committee Meeting Fee
|
|
$
|
750
|
(2)
|
Additional
Annual Retainer:
|
|
|
|
|
Chairman
of the Board
|
|
$
|
5,000
|
|
Audit
Committee Chair
|
|
$
|
3,500
|
|
Compensation
Committee Chair
|
|
$
|
3,500
|
|
Nominating
and Corporate Governance Committee Chair
|
|
$
|
1,500
|
|
Non-Chair
Committee Member Additional Retainer
(All
Committees)
|
|
$
|
1,000
|
|
Maximum
Per Diem For All Meetings
|
|
$
|
2,000
|
|
|
(1)
|
$750
for telephonic meetings (less than 30 minutes:
$375).
|
|
(2)
|
$375
for telephonic meetings.
|
Such cash
compensation is paid in quarterly increments. A director may elect, provided
such election is made at the beginning of the Company’s fiscal year, to receive,
in lieu of such cash payments, either (i) restricted stock units, or RSU’s,
covering that number of shares having a fair market value on the grant date
equal to such cash award or (ii) options in an amount equal to twice the number
of RSU’s that would have been received. Such election to receive (y) cash or (z)
equity in the form of RSU’s or options applies for the entire year. The
directors have all elected to receive options in lieu of cash for Fiscal 2010
and Fiscal 2011, except for Messrs. Braca and Rector, who have elected to
receive their retainer fees in cash and their meeting fees in options, and
Mr. Isabelle, who has elected to receive his fees in cash. The RSU’s or
options for each quarter are granted effective two (2) days following the filing
of our quarterly reports on Form 10-Q for that quarter and are fully vested as
of the grant date. The exercise price of the options will be the closing price
on the grant date.
Further,
in consideration for his service on a Finance Committee of the board, from
November 16, 2009 through May 31, 2010, Mr. Braca received additional board
compensation in the amount of $6,000 a month as well as 10,000 options per month
to purchase shares of the Company’s common stock. Such options vested on the
last business day of each applicable fiscal quarter in accordance with the terms
of the Company’s 2008 Incentive Compensation Plan, but were not issued until at
least two (2) trading days after the Company issues its financial results for
each applicable fiscal quarter. The Committee further indicated that such
compensation was in addition to any other fees received by Mr. Braca for his
service on the board and its other committees.
We
provide reimbursement to directors for reasonable and necessary expenses
incurred in connection with attendance at meetings of the board of directors and
other Senesco business.
Director
Compensation
The table
below shows the compensation paid or awarded to our directors (other than Dr.
Thompson) during the fiscal year ended June 30, 2010.
Name
|
|
Fees
Earned
or
Paid
in
Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
(1)
($)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
Rudolf
Stalder
|
|
|
—
|
|
|
|
—
|
|
|
$
|
56,153
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
56,153
|
|
Christopher
Forbes
|
|
|
—
|
|
|
|
—
|
|
|
$
|
42,632
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
42,632
|
|
Thomas
C. Quick
|
|
|
—
|
|
|
|
—
|
|
|
$
|
32,928
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
32,928
|
|
John
N. Braca
|
|
$
|
57,125
|
|
|
|
—
|
|
|
$
|
60,226
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
117,351
|
|
David
Rector
|
|
$
|
18,125
|
|
|
|
—
|
|
|
$
|
43,248
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
61,373
|
|
Jack
Van Hulst
(2)
|
|
|
—
|
|
|
|
—
|
|
|
$
|
33,502
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
33,502
|
|
Harlan
W. Waksal, M.D.
|
|
|
—
|
|
|
|
—
|
|
|
$
|
57,132
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
57,132
|
|
Warren
J. Isabelle
|
|
$
|
26,300
|
|
|
|
—
|
|
|
$
|
4,362
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
30,662
|
|
|
(1)
|
Represents
the aggregate grant date fair value for stock options granted in Fiscal
2010 as described below calculated in accordance with the FASB ASC Topic
718 and were not adjusted to take into account any estimated forfeitures.
For information regarding assumptions underlying the FASB ASC Topic 718
valuation of equity awards, see Note 7 of the Notes to the
Consolidated Financial Statements in our Annual Report on Form 10-K/A for
the fiscal year ended June 30, 2010. Does not include the aggregate grant
date fair value for stock options granted in October
2010.
|
As
described above, our non-employee directors (other than Mr. Isabelle) have
elected to receive option grants in lieu of their cash compensation.
Accordingly, on November 19, 2009, February 19, 2010, and May 20, 2010, each of
these non-employee directors received options to purchase shares of our common
stock pursuant to the provisions of the 2008 Stock Plan. Additionally, on
November 19, 2009, the non-employee directors were granted additional options
for their service during Fiscal 2009. The options have an exercise price of
$0.39 per share, $0.29 per share and $0.61 per share, respectively, the fair
market value of the common stock on the grant dates (except for the grants to
Christopher Forbes, which have exercise prices of $0.43 per share, $0.32 per
share and $0.67 per share, respectively (110% of the fair market value of the
common stock on the grant date).
The
following table sets forth information relating to options granted to the
directors during Fiscal 2010.
Director
|
|
Option Grant
Date
|
|
Exercise
Price
|
|
|
#
of Shares
|
|
|
Grant
Date Fair
Value
|
|
|
|
5/20/2010
|
|
$
|
0.61
|
|
|
|
10,041
|
|
|
$
|
4,464
|
|
Rudolf
Stalder
|
|
2/19/2010
|
|
$
|
0.29
|
|
|
|
56,666
|
|
|
$
|
11,719
|
|
|
|
11/19/2009
|
|
$
|
0.39
|
|
|
|
122,949
|
|
|
$
|
26,998
|
|
|
|
5/20/2010
|
|
$
|
0.67
|
|
|
|
9,631
|
|
|
$
|
4,228
|
|
Christopher
Forbes
|
|
2/19/2010
|
|
$
|
0.32
|
|
|
|
54,166
|
|
|
$
|
10,692
|
|
|
|
11/19/2009
|
|
$
|
0.43
|
|
|
|
88,718
|
|
|
$
|
19,957
|
|
|
|
5/20/2010
|
|
$
|
0.61
|
|
|
|
6,967
|
|
|
$
|
3,097
|
|
Thomas
C. Quick
|
|
2/19/2010
|
|
$
|
0.29
|
|
|
|
43,334
|
|
|
$
|
8,961
|
|
|
|
11/19/2009
|
|
$
|
0.39
|
|
|
|
60,898
|
|
|
$
|
14,384
|
|
|
|
5/20/2010
|
|
$
|
0.61
|
|
|
|
35,533
|
|
|
$
|
15,800
|
|
John
N. Braca
|
|
2/19/2010
|
|
$
|
0.29
|
|
|
|
65,834
|
|
|
$
|
13,614
|
|
|
|
11/19/2009
|
|
$
|
0.39
|
|
|
|
88,462
|
|
|
$
|
19,462
|
|
|
|
5/20/2010
|
|
$
|
0.61
|
|
|
|
5,533
|
|
|
$
|
2,460
|
|
David
Rector
|
|
2/19/2010
|
|
$
|
0.29
|
|
|
|
50,834
|
|
|
$
|
10,512
|
|
|
|
11/19/2009
|
|
$
|
0.39
|
|
|
|
86,539
|
|
|
$
|
18,926
|
|
|
|
5/20/2010
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Jack
Van Hulst
|
|
2/19/2010
|
|
$
|
0.29
|
|
|
|
29,166
|
|
|
$
|
6,031
|
|
|
|
11/19/2009
|
|
$
|
0.39
|
|
|
|
86,410
|
|
|
$
|
20,985
|
|
|
|
5/20/2010
|
|
$
|
0.61
|
|
|
|
22,951
|
|
|
$
|
10,205
|
|
Harlan
W. Waksal, M.D.
|
|
2/19/2010
|
|
$
|
0.29
|
|
|
|
77,500
|
|
|
$
|
16,027
|
|
|
|
11/19/2009
|
|
$
|
0.39
|
|
|
|
136,923
|
|
|
$
|
30,900
|
|
Warren
J. Isabelle
|
|
11/19/2009
|
|
$
|
0.39
|
|
|
|
25,000
|
|
|
$
|
4,362
|
|
The
following table shows the total number of shares of our common stock subject to
option awards (vested and unvested) held by each non-employee director as of
June 30, 2010:
Director
|
|
Total
# of Options
Outstanding
|
|
Rudolf
Stalder
|
|
|
909,951
|
|
Christopher
Forbes
|
|
|
478,211
|
|
Thomas
C. Quick
|
|
|
371,205
|
|
John
N. Braca
|
|
|
469,569
|
|
David
Rector
|
|
|
452,646
|
|
Jack
Van Hulst
|
|
|
378,032
|
|
Harlan
W. Waksal, M.D.
|
|
|
263,958
|
|
Warren
J. Isabelle
|
|
|
25,000
|
|
(2) Mr.
Van Hulst was employed by the Company as its chief executive officer from
November 16, 2009 through May 24, 2010. The compensation disclosed above is
compensation paid to him in consideration for his services a board member; the
compensation paid to Mr. Hulst for his services as our chief executive officer
is set forth in the Summary Compensation Tables below.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires a company’s directors, officers and
stockholders who beneficially own more than 10% of any class of equity
securities of the company registered pursuant to Section 12 of the Exchange Act,
collectively referred to herein as the Reporting Persons, to file initial
statements of beneficial ownership of securities and statements of changes in
beneficial ownership of securities with respect to the company’s equity
securities with the SEC. All Reporting Persons are required by SEC
regulation to furnish us with copies of all reports that such Reporting Persons
file with the SEC pursuant to Section 16(a).
Based
solely on our review of the copies of such forms received by us and upon written
representations of the Reporting Persons received by us, we believe that there
has been compliance with all Section 16(a) filing requirements applicable to our
Reporting Persons.
EXECUTIVE
OFFICERS
The
following table identifies our current executive officers:
|
|
|
|
Capacities
in
Which
Served
|
|
In
Current
Position
Since
|
Leslie
J. Browne, Ph.D.
|
|
61
|
|
President
and Chief Executive Officer
|
|
May
2010
|
|
|
|
|
|
|
|
John
E. Thompson, Ph.D.
|
|
69
|
|
Executive
Vice President and Chief Scientific Officer, Director
|
|
July
2004
|
Joel
P. Brooks
(1)
|
|
52
|
|
Chief
Financial Officer, Treasurer and Secretary
|
|
December
2000
|
Richard
Dondero
(2)
|
|
61
|
|
Vice
President of Research and Development
|
|
July
2004
|
|
(1)
|
Mr.
Brooks was appointed our Chief Financial Officer and Treasurer in December
2000. Mr. Brooks was appointed our Secretary in May 2010. From September
1998 until November 2000, Mr. Brooks was the Chief Financial Officer of
Blades Board and Skate, LLC, a retail establishment specializing in the
action sports industry. Mr. Brooks was Chief Financial Officer from 1997
until 1998 and Controller from 1994 until 1997 of Cable and Company
Worldwide, Inc. He also held the position of Controller at USA Detergents,
Inc. from 1992 until 1994, and held various positions at several public
accounting firms from 1983 through 1992. Mr. Brooks is also a director and
chairman of the audit committee of USA Technologies, Inc.
Mr. Brooks received
his Bachelor of Science degree in Commerce with a major in Accounting from
Rider University in February 1983.
|
|
(2)
|
Mr.
Dondero was appointed our Vice President of Research and Development in
July 2004. From July 2002 until July 2004, Mr. Dondero was a Group Leader
in the Proteomics Reagent Manufacturing division of Molecular Staging,
Inc., a biotech firm engaged in the measurement and discovery of new
biomarkers. From 1985 through June 2001, Mr. Dondero served in several
roles of increasing responsibility through Vice President of Operations
and Product Development at Cistron Biotechnology, Inc. From 1977 through
1985, Mr. Dondero served as a senior scientist at Johnson and Johnson, and
from 1975 through 1977, as a scientist at Becton Dickinson. Mr. Dondero
received his Bachelor of Arts degree from New Jersey State University in
1972 and his Master of Science degree from Seton Hall University in
1976.
|
None of
our current executive officers are related to any other executive officer or to
any of our directors. Our executive officers are elected annually by our board
and serve until their successors are duly elected and
qualified.
COMPENSATION
DISCUSSION AND ANALYSIS
This
Compensation Discussion and Analysis explains the principles underlying our
compensation policies and decisions and the principal elements of compensation
paid to our executive officers during Fiscal 2010 and as anticipated for Fiscal
2011. Our Chief Executive Officers, Chief Financial Officer and all of our other
executive officers included in the Summary Compensation Table will be referred
to as the “named executive officers” for purposes of this
discussion.
Compensation
Objectives and Philosophy
The
Compensation Committee, also referred to herein as the Committee, of the board
is responsible for the following:
|
·
|
annually
reviewing and approving, or recommending for approval by our board, the
corporate goals and objectives relevant to executive officer
compensation;
|
|
·
|
reviewing
and approving, or recommending for approval by our board, the salaries and
incentive compensation of our executive
officers;
|
|
·
|
preparing
the Compensation Committee report, including the Compensation Discussion
and Analysis;
|
|
·
|
administering
our 2008 Incentive Compensation Plan, or similar stock plan adopted by our
stockholders; and
|
|
·
|
reviewing
and making recommendations to our board with respect to director
compensation.
|
As part
of this process, the Committee seeks to accomplish the following objectives with
respect to our executive compensation programs:
|
·
|
to
motivate, recruit and retain executives capable of meeting our strategic
objectives;
|
|
·
|
to
provide incentives to ensure superior executive performance and successful
financial results for us; and
|
|
·
|
to
align the interests of executives with the long-term interests of our
stockholders.
|
The
Committee seeks to achieve these objectives by:
|
·
|
linking
a substantial portion of compensation to our achievement of long-term and
short-term financial objectives and the individual’s contribution to the
attainment of those objectives;
|
|
·
|
providing
long-term equity-based incentives and encouraging direct share ownership
by executives with the intention of providing incentive-based compensation
to encourage a long-term focus on company profitability and stockholder
value; and
|
|
·
|
understanding
the marketplace and establishing a compensation structure that is adjusted
for our position in the marketplace and our current financial condition
and limited capital resources.
|
Setting
Executive Compensation
In Fiscal
2009, the Committee engaged J. Richard and Co., also referred to herein as J.
Richard, a nationally recognized compensation consulting firm, to provide
competitive compensation data and general advice on our compensation programs
and policies for our Chief Executive Officer; J. Richard was available for
consultation with the Committee to discuss the compensation programs for our
other named executive officers. During Fiscal 2009, J. Richard performed a
market analysis of the compensation paid by comparable companies and provided
the Committee with recommended compensation ranges for the Chief Executive
Officer based on the competitive data. In addition, the Chief Executive Officer
provided recommendations to the Committee with respect to the compensation
packages for our other named executive officers for Fiscal 2009.
For
Fiscal 2010, the Committee’s objective was to target each component of
compensation listed below to be competitive with comparable positions at peer
group companies, and to target the total annual compensation of each named
executive officer at the appropriate level for comparable positions at the
competitive peer group companies.
During the compensation review process
for Fiscal 2010, the Committee elected not to engage an independent compensation
consultant for a full review of the Company’s compensation policies. This
decision was based on the Committee’s belief that prior years analysis did not
closely enough parallel the scope of our business relative to the breadth of
operations in general, executive officers scope of duties and responsibilities,
position in the life cycle, financial responsibilities, capitalization and size
of management staff. The Committee also met with the Chief Executive Officer who
agreed with the approach not to engage an outside consultant for a full review
of the Company’s compensation policies and agreed to provide a review of
management’s performance against objectives for the period to assist in
ascertaining equity award levels. However, during the compensation review
process for Fiscal 2010, the Committee engaged J. Richard as its compensation
consultant, on an as needed basis regarding its proposed programs and approaches
to compensation during Fiscal 2010, for which J. Richard was compensated. Other
than as described above, J. Richard did not provide any additional services to
the Committee or the Company for Fiscal 2010, and compensation to J. Richard for
services rendered in Fiscal 2010 was less than $120,000. In addition, the
Committee consulted with J. Richard in connection with its plans for Fiscal
2011.
The Committee elected to identify
various companies in the biotech sector it felt were somewhat close in scope of
operation to the Company. It became evident, as in prior years, that due to the
key banner points listed above (the breadth of operations in general, executive
officers scope of duties and responsibilities, position in the life cycle,
financial responsibilities, capitalization and size of management staff) it is
very difficult to identify such public entities for comparative purposes. For
Fiscal 2010 and Fiscal 2009, the companies we elected to evaluate were as
follows: Adolor Corporation (ADLR); MDRNA Inc. (MRNA); Anesiva Inc. (ANSV);
Santarus Inc. (SNTS); Sequenom, Inc.(SQNM); Cubist (CBST); Lexicon (LXRX); and
Targacept, Inc. (TRGT). In selecting companies to survey for such compensation
purposes, the Committee considered many factors not directly associated with the
stock price performance of those companies, such as geographic location,
development stage, organizational structure and market capitalization. For this
reason, there is not a meaningful correlation between the companies included
within the peer group identified for comparative compensation purposes and the
companies included within the RDG Micro Biotechnology Index.
In
determining the compensation of each named executive officer, the Committee also
considers a number of other factors, including our recent performance and the
named executive officer’s individual performance, the Chief Executive Officer’s
recommendations and the importance of the executive’s position and role in
relation to execution of the Company’s strategic plan. There is no
pre-established policy for allocation of compensation between cash and non-cash
components or between short-term and long-term components. Instead, the
Committee determines the mix of compensation for each named executive officer
based on its review of the competitive data, its subjective analysis of that
individual’s performance and contribution to our financial performance, the
financial strength and outlook of the Company and, most of all, what is
considered fair and reasonable based on the scope of operations and
responsibilities of the officer. For the Chief Executive Officer, for Fiscal
2010, the Committee set his performance targets and compensation levels based
upon the input from the Committee’s analysis and from the Chief Executive
Officer. For other named executive officers, the Committee sets performance
targets and compensation levels after taking into consideration recommendations
from the Chief Executive Officer.
Components
of Compensation
For
Fiscal 2010, our executive compensation program included the following
components:
|
·
|
annual
short-term equity incentives;
|
|
·
|
a
continuation of the long-term equity incentive program;
and
|
|
·
|
change
in control and other severance
arrangements.
|
Fiscal
2011 Compensation
Currently,
for Fiscal 2011, our executive compensation program includes the following
components:
|
·
|
annual
short-term equity incentives; and
|
|
·
|
a
continuation of the long-term equity incentive
program.
|
The
Committee seeks to align the named executive officers’ and stockholders’
interests in a pay for performance environment. On average, a large portion of
an executive officer's total compensation is at risk, with the amount actually
paid tied to achievement of pre-established objectives and individual
goals.
Base
Salary
In General
– It is the
Committee’s objective to set a competitive rate of annual base salary or
consulting fees for each named executive officer. The Committee believes
competitive base salaries are necessary to attract and retain top quality
executives, since it is common practice for public companies to provide their
executive officers with a guaranteed annual component of compensation that is
not subject to performance risk. However, the Committee recognizes that we are
still a development stage company, with little to no revenue currently and
believes that developing too rigid of a compensation structure can become
detrimental to our progress.
When
compared to comparable positions at the competitive peer group companies, it is
the Committee’s objective to target the base compensation level of executive
officers below the 50th percentile because of our current financial position.
Historically, the compensation level for our executive officers has been below
the 25
th
percentile of competitive peer group companies. However, in determining the
compensation of each executive officer, the Committee also considers a number of
other factors, including recent Company and individual performance, the
officer’s position and responsibilities and the CEO’s recommendations (with
respect to officers other than the CEO). .
Base Salary for Fiscal 2010
–
For Fiscal 2010, each named executive officer’s salary was not increased from
the Fiscal 2009 levels as the Committee deemed the scope of their resource
management (i.e. personnel, operating budgets, and outside relationships) were
commensurate, fair and reasonable relative to their current base salary rate.
The table below shows annual Fiscal 2010 and Fiscal 2009 base salary or
consulting rates for each named executive officer:
|
|
|
|
2010
|
|
|
2009
|
|
|
%
|
|
Name
|
|
Title
|
|
Salary
|
|
|
Salary
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leslie
J. Browne, Ph.D.
|
|
President
and Chief Executive Officer (1)
|
|
$
|
250,000
|
|
|
$
|
0
|
|
|
|
0.0
|
%
|
Bruce
C. Galton
|
|
President
and Chief Executive Officer (2)
|
|
$
|
255,000
|
|
|
$
|
255,000
|
|
|
|
0.0
|
%
|
Jack
Van Hulst
|
|
President
and Chief Executive Officer (3)
|
|
$
|
60,000
|
|
|
$
|
0
|
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
E. Thompson
|
|
Executive
Vice-President and Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scientific
Officer
|
|
$
|
65,000
|
(4)
|
|
$
|
65,000
|
(4)
|
|
|
0.0
|
%
|
Sascha
P. Fedyszyn
|
|
Vice-President
of Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
and Secretary (5)
|
|
$
|
107,500
|
|
|
$
|
107,500
|
|
|
|
0.0
|
%
|
Joel
P. Brooks
|
|
Chief
Financial Officer and Treasurer
|
|
$
|
160,000
|
|
|
$
|
160,000
|
|
|
|
0.0
|
%
|
Richard
Dondero
|
|
Vice-President
of Research and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
|
$
|
143,000
|
|
|
$
|
143,000
|
|
|
|
0.0
|
%
|
|
(1)
|
Dr.
Browne was appointed President and Chief Executive Officer on May 25,
2010.
|
|
(2)
|
Mr.
Galton resigned from the Company on November 16,
2009.
|
|
(3)
|
Mr.
Van Hulst was appointed President and Chief Executive Officer on November
16, 2009 and resigned as President and Chief Executive Officer on May 24,
2010.
|
|
(4)
|
Represents
consulting fees paid under a consulting
agreement.
|
|
(5)
|
Mr.
Fedyszyn resigned from the Company on February 1,
2010.
|
Effective
November 16, 2009, Jack Van Hulst, a member of our board of directors, assumed
the role of President and Chief Executive Officer of Senesco. We did not enter
into an employment agreement with Mr. Van Hulst; however, the Committee and
independent members of the board determined to pay to Mr. Van Hulst a monthly
salary in the amount of $5,000 and to grant to Mr. Van Hulst options to purchase
shares of our common stock, par value $0.01, in the amount of 25,000 options per
month, pursuant to our 2008 Incentive Compensation Plan. Such options vested
immediately upon each issuance. Such options were granted quarterly, two (2)
trading days following the Company’s filing of its quarterly report for the
respective quarterly period. Mr. Van Hulst resigned as President and Chief
Executive Officer on May 24, 2010, but remains a member of our board of
directors.
Base Salary for Fiscal 2011
–
For Fiscal 2011, after a review of the factors discussed above, the following
named executive officer’s salaries were increased as follows.
|
|
|
|
2011
|
|
|
2010
|
|
|
%
|
|
Name
|
|
Title
|
|
Salary
|
|
|
Salary
|
|
|
Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joel
P. Brooks
|
|
Chief
Financial Officer , Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
and
Secretary
|
|
$
|
164,800
|
|
|
$
|
160,000
|
|
|
|
3.0
|
%
|
Richard
Dondero
|
|
Vice-President
of Research and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
|
$
|
147,300
|
|
|
$
|
143,000
|
|
|
|
3.0
|
%
|
The
Committee did not change the salary of Leslie J. Browne, Ph.D., our President
and Chief Executive Officer, due to the fact that Dr. Browne’s compensation was
recently determined in connection with his appointment to his current positions
in May 2010. Additionally, the Committee did not change the consulting fee for
John E. Thompson, Ph.D., our Executive Vice President and Chief Scientific
Officer, as such consulting fee will be reviewed and revised, as necessary, by
the Committee in connection with the board’s review of our research and
development budget for Fiscal 2011.
Annual Bonuses for Fiscal
2010
– In October 2010, cash bonuses were granted to Mr. Brooks and
Mr. Dondero in the amount of $15,000 each for services rendered in Fiscal
2010.
The
Committee wishes to provide additional compensation to all of the named
executive officers, including the Chief Executive Officer, through the
development of incentive programs based on the named executives performance and
attainment of stated objectives that enhance shareholder value in order to (i)
link a substantial portion of their compensation to the achievement of
short-term and long-term objectives and (ii) to save cash given our limited
capital resources.
Annual Bonuses for Fiscal
2011
– Bonuses will be determined at the discretion of the board after the
end of the fiscal year based upon the recommendation of the
Committee.
Short
Term Incentive Equity Awards
In General
– A portion of each
named officer’s compensation is provided in the form of short-term equity
awards. It is the Committee’s belief that properly structured equity awards are
an effective method of aligning the short-term interests of our named executive
officers with those of our stockholders.
Short-term
equity awards were made in the form of incentive stock options, also referred to
herein as ISO’s, for tax purposes. The Committee has followed a grant practice
of tying equity awards to its annual year-end review of individual performance,
its assessment of our performance and our operational results.
Incentive Stock Option Fiscal 2010
Awards
– On February 16, 2010, the Committee determined to award options
to purchase shares of common stock of the Company, par value $0.01, to each of
Joel Brooks and Richard Dondero. These option grants were intended to
retain such officers and to motivate such officers in the continued performance
of their respective offices.
Accordingly,
effective February 19, 2010, Mr. Brooks and Mr. Dondero were each granted
options to purchase 300,000 shares of the Company’s common stock pursuant to the
Company’s 2008 Incentive Compensation Plan. Such options vest as
follows:
|
·
|
Options
to purchase 60,000 shares of common stock vest immediately upon issuance;
and
|
|
·
|
Unless
otherwise determined by the Committee, options to purchase up to 60,000
shares of common stock vest on each of June 30, 2010, June 30, 2011, June
30, 2012 and June 30, 2013.
|
The
Committee had the right to evaluate Mr. Brooks’ and Mr. Dondero’s respective
performances during the fiscal year preceding each vesting date and unilaterally
reduce their unvested options in the Committee’s sole discretion. The
unvested options of a relevant officer shall be forfeited upon the termination
of such officer’s employment. The options were granted at an exercise
price equal to the fair market value of the Company’s common stock on February
19, 2010 or $0.29.
Short-Term Incentive Plan for Fiscal
2011 –
The Committee, in coordination with the Company’s Chief Executive
Officer, has established the Company’s short-term goals and objectives for
Fiscal 2011, which include the following:
|
·
|
Contributions
relating to the development of the Company’s SNS01-T
assets:
|
|
o
|
Submit
IND for Phase I/II clinical trial;
|
|
o
|
Initiate
Phase I/II clinical trial;
|
|
o
|
Plan
Phase II clinical trial;
|
|
o
|
Develop
SNS01-T development plan to NDA
submission;
|
|
·
|
Contributions
relating to finance objectives:
|
|
o
|
Maintain
sufficient capital resources;
|
|
o
|
Maintain
NYSE Amex compliance;
|
|
o
|
Increase
shareholder communications and enhance investor
relations;
|
|
·
|
Contributions
relating to corporate development:
|
|
o
|
Update
corporate strategy; and
|
|
o
|
Re-align
Company structure to best implement corporate
strategies.
|
The
foregoing goals and objectives shall be weighted as follows: 50% for
contributions relating to the development of the Company’s SNS01-T assets; 25%
to contributions relating to finance objectives; and 25% to contributions
relating to corporate development. The option awards for each of the foregoing
goals and objectives shall be equally allotted to the following named executive
officers – Dr. Browne and Messrs. Brooks and Dondero – at one-third
each.
The
Committee, working with the Company’s Chief Executive Officer, has identified
additional individual performance goals and objectives for Fiscal 2011 for
Messrs. Brooks and Dondero, which primarily include broadening their knowledge
base and leadership profile within the scientific and business community of our
peers, competitors, clients and customers.
In
October 2010, the Committee determined to award the following options to
purchase shares of common stock of the Company, par value $0.01, to the
following named executive officers in connection with the short-term goals and
objectives for Fiscal 2011:
Leslie
J. Browne, Ph.D.
|
|
|
725,000
|
|
Joel
Brooks
|
|
|
425,000
|
|
Richard
Dondero
|
|
|
425,000
|
|
John
E. Thompson, Ph.D.
|
|
|
425,000
|
|
Such
options were granted on November 17, 2010, which was two days after the filing
of our quarterly report on Form 10-Q for the period ended September 30, 2010,
and have an exercise price of $0.26, which is equal to the closing price of the
common stock on the date of grant. Twenty-five percent (25%) of such options
will vest on the first anniversary of the date of grant with the balance vesting
at a rate of 1/36 for each month thereafter, unless the Committee has determined
that the performance metrics have not been met.
Long-Term
Incentive Equity Awards
In General
– A portion of each
named executive officer’s compensation is provided in the form of long-term
incentive equity awards as set forth in the Long-Term Incentive Plan (the
“LTIP”) discussed below. It is the Committee’s belief that properly structured
equity awards are an effective method of aligning the long term interests of our
named executive officers with those of our stockholders.
Beginning
with the LTIP for the Fiscal 2008, equity awards have been made in the form of
restricted stock units, also referred to herein as RSU’s; however, each
executive officer could elect to receive an equity award in the form of stock
options. Beginning with Fiscal 2010, equity awards have been made in the form of
stock options. Under the LTIP, equity awards are based upon of the completion of
certain event milestones (“LTIP Event Milestones”) to be achieved over a period
of 3 years as discussed below. Accordingly, it is expected that any equity
awards to the named executive officers under the LTIP will be made promptly
after the completion of each LTIP Event Milestone based on the level of
achievement of the milestones. The Committee has established LTIP grant
guidelines for eligible named executive officers based on competitive annual
grant data provided by management’s compensation consultant and by J. Richard,
the Committee’s compensation consultant.
Long-Term Incentive Plan
– For
the Fiscal 2008 LTIP period beginning on December 13, 2007 (the “LTIP Effective
Date”) and ending on the earlier of (i) the completion of the Third LTIP Event
Milestone or (ii) three (3) years from the LTIP Effective Date LTIP equity
grants were to be made to our named executive officers in the form of RSU’s and
ISO’s, based on achievement of the LTIP Event Milestones Each RSU entitles the
recipient to receive one share of our common stock upon vesting or upon a
designated date or event following such vesting. Each named executive had the
option of receiving their RSU grant in the form of RSU’s or ISO’s. If a named
executive chose to receive ISO’s in lieu of RSU’s, then such named executive was
granted twice as many ISO’s, due to the exercise price of such
ISO’s.
The total
RSU’s and ISOs in the LTIP pool awarded to our named executive officers was
775,000 shares, which consisted of 225,000 RSU’s and 550,000 ISO’s, representing
3.9% of the outstanding shares as of July 1, 2009.
The LTIP
Event Milestones to be achieved, the weighting allocated to each milestone,
amount and percentage of the RSU’s and ISOs to be awarded, as adjusted for
forfeitures to all the named executive officers as a whole for the completion of
each of the three LTIP Event Milestones are as follows:
LTIP Event Milestone
|
|
Percentage of
LTIP RSU and
ISO Award Pool
|
|
|
Total Amount of RSUs and
ISO’s Awarded As a Whole to
All Named Executive
Officers
|
|
First LTIP Event Milestone.
|
|
|
|
|
|
|
The
Execution of a Research Agreement to Conduct Phase I/II Trials at a
Research Facility
|
|
|
20
|
%
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
Second LTIP Event
Milestone.
|
|
|
|
|
|
|
|
|
The
Filing and Acceptance by the U.S. FDA of an investigation new drug
application, or IND, by the date set by the Committee
|
|
|
20
|
%
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
Third LTIP Event Milestone.
|
|
|
|
|
|
|
|
|
The
Successful Completion of Phase I/II Trials Approved by the FDA by the date
set by the Committee
|
|
|
60
|
%
|
|
|
360,000
|
|
The LTIP
awards for each named executive officer upon the completion of each individual
LTIP Event Milestone was to be as follows:
Name
|
|
Title
|
|
Percentage
of
Total
RSU’s
Awarded
Upon
Completion
of a
LTIP
Event
Milestone
|
|
|
Number
of
RSU’s
Awarded
upon
Completion
of
First LTIP
Event
Milestone
|
|
|
Number
of
RSU’s
Awarded
upon
Completion
of
Second LTIP
Event
Milestone
|
|
|
Number
of
RSU’s
Awarded
upon
Completion
of
Third
LTIP
Event
Milestone
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joel
P. Brooks
(1)
|
|
Chief
Financial Officer, Treasurer and Secretary
|
|
|
10
|
%
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
E. Thompson
(2)
|
|
Executive
Vice-President and Chief Scientific Officer
|
|
|
25
|
%
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
Dondero
(2)
|
|
Vice-President
of Research and Development
|
|
|
30
|
%
|
|
|
60,000
|
|
|
|
60,000
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce
C. Galton(1) (3)
|
|
Former
President and Chief Executive Officer
|
|
|
25
|
%
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sascha
P. Fedyszyn(1)(4)
|
|
Former
Vice-President of Corporate Development and Secretary
|
|
|
10
|
%
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
30,000
|
|
|
(3)
|
Mr.
Galton resigned from the Company on November 16, 2009 and, thus his awards
set forth above, which were unvested at the time of his resignation, were
forfeited.
|
|
(4)
|
Mr.
Fedyszyn resigned from the Company on February 1, 2010 and, thus his
awards set forth above, which were unvested at the time of his
resignation, were forfeited
|
The Committee reviewed the LTIP Event
Milestones and determined that the First LTIP Event Milestone had been met and
the RSU’s and ISOs related to such event were granted to Messrs. Brooks and
Dondero and Dr. Thompson on November 17, 2010, which was two trading days after
the filing of our quarterly report on Form 10-Q for the period ended September
30, 2010. Each such option grant had an exercise price of $0.99 per share, the
closing selling price of our stock on the grant date. The Committee also
determined that none of the remaining LTIP Event Milestones have been met and
the RSU’s and Options related to such events expired on December 13,
2010.
Market Timing of Equity
Awards
. The Compensation Committee does not engage in any market timing
of the equity awards made to the executive officers or other award recipients,
and accordingly, there is no established practice of timing our awards in
advance of the release of favorable financial results or adjusting the award
date in connection with the release of unfavorable financial developments
affecting our business. In general, we will attempt, when possible, to make
equity awards to our executive officers and directors promptly after the release
of our financial results. For example, the October 2010 awards on November 17,
2010, which was two trading days after the filing of our quarterly report on
Form 10-Q for the quarter ended September 30, 2010.
Clawback
Policy
The Company is reviewing its current
“clawback” policy which provides for recoupment of incentive compensation in
certain circumstances in connection with the enactment of recent regulations in
that regard and is awaiting final SEC rules and regulations in order to revise
its “clawback” policy in compliance with such rules and
regulations.
Analysis
of Risk Associated with our Compensation Plans
In making decisions regarding
compensation program design and pay levels, our Compensation Committee and
senior management, working with our Audit Committee, consider many factors,
including any potential risks to the Company and its stockholders. Although a
significant portion of our executives’ compensation is performance-based and
“at-risk,” we believe the Company’s compensation plans are appropriately
structured and are not reasonably likely to have a material adverse effect on
the Company.
Executive
Benefits and Perquisites
In General
– The named
executive officers also are provided with certain market competitive benefits.
They are currently not provided with any perquisites. It is the Committee’s
belief that such benefits are necessary for us to remain competitive and to
attract and retain top caliber executive officers, since such benefits are
typically provided by companies in the biotechnology industry and with other
companies with which we compete for executive talent.
Retirement Benefits
– The
named executive officers may participate in the company-wide 401(k) plan. We do
not make any contributions to the 401(k) plan and do not have any additional
retirement benefits.
Other Benefits and Perquisites
– All administrative employees, including the named executive officers, are
eligible to receive standard health, disability, and life insurance. We do not
provide any additional benefits and perquisites.
Employment
Agreements
We had previously entered into
employment agreements with our executive officers. During Fiscal 2009, the
Committee determined that we could in no manner financially support the terms of
the various employment agreements in effect. The Committee issued a notice of
non-renewal to all named executive officers in effect not renewing the
employment agreements moving forward following the various upcoming anniversary
dates of each agreement. As such, Mr. Brooks’ employment agreement expired on
June 30, 2010, and Mr. Dondero’s employment agreement expired on July 19, 2010.
Each of the named executive officers have, following the expiration of their
employment agreements, continued as employees on an “at will basis”, meaning
that either we or the employees may discontinue their employment with or without
notice or cause. The employees’ respective salaries, duties and
titles may be adjusted as determined by the Committee. In May 2010, we entered
into an employment agreement with Dr. Browne in connection with his appointment
as our chief executive officer. Such agreement was entered into with Dr. Browne
as part of an inducement to join the Company and become our President and CEO in
May 2010. The terms of the agreement with Dr. Browne are described in Employment
Contracts, Termination of Employment, and Change in Control Arrangements
below.
IRC
Section 162(m) compliance
As a
result of Section 162(m) of the Internal Revenue Code, publicly-traded
companies such as us are not allowed a federal income tax deduction for
compensation, paid to the Chief Executive Officer and the three other highest
paid executive officers, to the extent that such compensation exceeds
$1 million per officer in any one year and does not otherwise qualify as
performance-based compensation. Currently, our stock option compensation
packages are structured so that compensation deemed paid to an executive officer
in connection with the exercise of a stock option should qualify as
performance-based compensation that is not subject to the $1 million
limitation. However, other awards, like RSU’s, made under our stock incentive
plans may or may not so qualify. In establishing the cash and equity incentive
compensation programs for the executive officers, it is the Committee’s view
that the potential deductibility of the compensation payable under those
programs should be only one of a number of relevant factors taken into
consideration, and not the sole governing factor. For that reason the Committee
may deem it appropriate to continue to provide one or more executive officers
with the opportunity to earn incentive compensation, including cash bonus
programs tied to our financial performance and RSU awards, which may be in
excess of the amount deductible by reason of Section 162(m) or other
provisions of the Internal Revenue Code. It is the Committee’s belief that cash
and equity incentive compensation must be maintained at the requisite level to
attract and retain the executive officers essential to our financial success,
even if part of that compensation may not be deductible by reason of the
Section 162(m) limitation. For Fiscal 2010, none of our executive officer’s
compensation reached the $1 million limitation. The Committee will continue to
evaluate such $1 million limitation in Fiscal 2011.
Report
of the Compensation Committee
The
Compensation Committee has reviewed and discussed the Compensation, Discussion
and Analysis with management, and based on this review and these discussions,
the Compensation Committee recommended to the board that the Compensation,
Discussion and Analysis be included in the Company’s Annual Report on Form
10-K/A.
This
report is submitted on behalf of the
|
Compensation
Committee
|
David
Rector, Chairman
|
John
N. Braca
|
Summary
Compensation Table
The
following table sets forth information concerning compensation for services
rendered in all capacities during the fiscal years ended June 30, 2010, June 30,
2009 and June 30, 2008 awarded to, earned by or paid to: (i) each person who
served as our Chief Executive Officer in Fiscal 2010; (ii) our Chief Financial
Officer; and (iii) each of our three other executive officers whose total
compensation for Fiscal 2010 was in excess of $100,000, collectively referred to
herein as the named executive officers. No other executive officers who would
have otherwise been includable in such table on the basis of total compensation
for Fiscal 2010 have been excluded by reason of their termination of employment
or change in executive status during that year.
Name
and
Principal
Position
|
|
Year
(1)
|
|
Salary
($)(2)
|
|
|
Bonus
($)(3)
|
|
|
Stock
Awards
($)
(4)
|
|
|
Option
Awards
($)
(5)
|
|
|
Non-
Equity
Incentive
Plan
Compensation
($)
|
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All
Other
Compensation
($)
(6)
|
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
Leslie
J. Browne, Ph.D. (7)
|
|
2010
|
|
$
|
27,885
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
440,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
$
|
467,885
|
|
(President
and Chief
|
|
2009
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Executive
Officer)
|
|
2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Jack
Van Hulst (8)
|
|
2010
|
|
$
|
32,538
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
38,625
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
74,514
|
|
(Former
President and Chief
|
|
2009
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Executive
Officer)
|
|
2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Bruce
C. Galton (9)
|
|
2010
|
|
$
|
91,612
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
97,875
|
|
|
$
|
189,487
|
|
(Former
President and Chief
|
|
2009
|
|
$
|
258,348
|
|
|
|
-
|
|
|
$
|
39,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
297,948
|
|
Executive
Officer)
|
|
2008
|
|
$
|
258,347
|
|
|
|
-
|
|
|
$
|
49,723
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
14,711
|
|
|
$
|
308,070
|
|
Joel
P. Brooks
|
|
2010
|
|
$
|
163,306
|
|
|
$
|
15,000
|
|
|
|
-
|
|
|
$
|
66,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
244,306
|
|
(Chief
Financial Officer ,
|
|
2009
|
|
$
|
161,986
|
|
|
|
-
|
|
|
$
|
16,800
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
178,786
|
|
Secretary
and Treasurer)
|
|
2008
|
|
$
|
149,885
|
|
|
|
-
|
|
|
$
|
36,903
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
186,788
|
|
Richard
Dondero
|
|
2010
|
|
$
|
146,677
|
|
|
$
|
15,000
|
|
|
|
-
|
|
|
$
|
66,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
227,677
|
|
(Vice-President
of
|
|
2009
|
|
$
|
145,507
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
34,960
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
180,467
|
|
Research)
|
|
2008
|
|
$
|
130,008
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
286,381
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
416,389
|
|
Sascha
P. Fedyszyn (10)
|
|
2010
|
|
$
|
56,407
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
42,666
|
|
|
$
|
99,073
|
|
(Former
Vice-President of
|
|
2009
|
|
$
|
108,091
|
|
|
|
-
|
|
|
$
|
25,200
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
133,291
|
|
Corporate
Development and Secretary)
|
|
2008
|
|
$
|
103,634
|
|
|
|
-
|
|
|
$
|
24,948
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3,731
|
|
|
$
|
128,582
|
|
John
E. Thompson Ph.D.
|
|
2010
|
|
$
|
65,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
65,000
|
|
(Executive
Vice-President
|
|
2009
|
|
$
|
65,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
22,080
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
87,080
|
|
and
Chief Scientific Officer)
|
|
2008
|
|
$
|
65,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
233,060
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
298,060
|
|
(1) Senesco’s
fiscal year ends on June 30.
(2) Such
amount represents actual salary paid or earned, including such amounts deferred
in connection with our 401K plan.
(3) The
bonus earned for the fiscal year ended June 30, 2010 was declared and paid in
October 2010. There were no bonuses earned or paid during the fiscal years ended
June 30, 2009 and June 30, 2008.
(4) The
amounts shown are the grant date fair value of RSU’s awarded to each named
executive officer in each year. The fair values of the RSU’s awarded were
calculated based on the fair market value of the underlying shares of common
stock on the respective grant dates in accordance with FASB ASC Topic 718 and
were not adjusted to take into account any estimated forfeitures. In accordance
with the recently adopted SEC rules, the amounts previously reported in the
“Stock Awards” column” column for 2009 and 2008 have been revised to reflect the
grant date fair values of the awards granted in such years, as determined in
accordance with FASB ASC Topic 718, excluding the effect of
forfeitures.
(5) The
amounts shown are the grant date fair value of stock options granted to each
named executive officer, in accordance with FASB ASC Topic 718 pursuant to the
Black Scholes pricing model. For a discussion of valuation assumptions used in
the calculations, see Notes 2 and 12 of Notes to Consolidated Financial
Statements included in Part II, Item 8 of our 2010 Form 10-K/A. The grant date
fair values used to calculate such compensation costs were not adjusted to take
into account any estimated forfeitures. In accordance with the recently adopted
SEC rules, the amounts previously reported in the “Option Awards” column for
2009 and 2008 have been revised to reflect the grant date fair values of the
awards granted in such years, as determined in accordance with FASB ASC Topic
718, excluding the effect of forfeitures.
(6) Such
amount represents unused vacation time (12,750 for Mr. Galton and 7,456 for Mr.
Fedyszyn) and severance (85,125 for Mr. Galton and 35,210 for Mr. Fedyszyn) paid
during the fiscal year ended June 30, 2010 and unused vacation time paid during
the fiscal year ended June 30, 2008.
(7) Dr.
Browne was appointed President and Chief Executive Officer on May 25,
2010.
(8) Mr.
Van Hulst served as our President and Chief Executive Officer from November 16,
2009 through May 24, 2010. He continues to serve as a member of our board. The
compensation paid to him for his services as a board member are described in
Director Compensation above.
(9) Mr.
Galton resigned as our President and Chief Executive Officer on November 16,
2009.
(10) Mr.
Fedyszyn resigned as our Vice-President Corporate Development and Secretary on
February 1, 2010.
Executive
Compensation Agreements
On July
1, 2003, Joel P. Brooks entered into an employment agreement with Senesco for a
term of three (3) years. The agreement automatically renewed for successive one
(1) year terms thereafter, unless written notice of termination was provided at
least 120 days prior to the end of the applicable term. Notice of termination of
the agreement was provided on May 18, 2009, and Mr. Brooks’ employment agreement
expired on June 30, 2010.
On July
19, 2004, we hired Richard Dondero as our new Vice President of Research and
Development. In conjunction with Mr. Dondero’s appointment, we entered into a
three (3) year employment agreement with Mr. Dondero, effective July 19, 2004.
The agreement automatically renewed for successive one (1) year terms
thereafter, unless written notice of termination was provided at least 120 days
prior to the end of the applicable term. Notice of termination of the agreement
was provided on May 18, 2009 and Mr. Dondero’s employment agreement expired on
July 18, 2010.
On May 25, 2010, we hired Leslie J.
Browne, Ph.D. as our new President and Chief Executive Office. In conjunction
with Dr. Browne’s appointment, we entered into an agreement whereby we will pay
six months of severance at his base salary in effect at such time, in the event
that Dr. Browne is terminated without cause within the first year of employment,
which would amount to $125,000. He would also be provided with a continuation of
his medical benefits for a period of six months from the date of
termination.
Grants
of Plan-Based Awards
The
following Grants of Plan Based Awards table provides additional information
about stock and option awards and equity incentive plan awards granted to our
named executive officers during the fiscal year ended June 30,
2010.
|
|
|
|
Estimated
Future Payouts
Under
Non-Equity Incentive
Plan
Awards
|
|
|
Estimated
Future Payouts Under
Equity
Incentive Plan Awards
|
|
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stock
|
|
|
All
Other
Option
Awards:
Number
of
Securities
Under-
lying
|
|
|
Exercise
or
Base
Price
of
Option
|
|
|
Grant
Date
Fair
Value
of
Equity
|
|
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
or
Units
(#)
|
|
|
Options
(#)
|
|
|
Awards
($/Sh)
|
|
|
Awards
($)(1)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
|
|
Leslie
J. Browne, Ph.D.
|
|
5/25/2010
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000,000
|
|
|
$
|
0.55
|
|
|
$
|
440,000
|
|
Jack
Van Hulst
|
|
2/19/2010
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
37,500
|
|
|
$
|
0.29
|
|
|
$
|
8,250
|
|
|
|
5/20/2010
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
75,000
|
|
|
$
|
0.61
|
|
|
$
|
34,500
|
|
Joel
P. Brooks
|
|
2/19/2010
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
300,000
|
|
|
$
|
0.29
|
|
|
$
|
66,000
|
|
Richard
Dondero
|
|
2/19/2010
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
300,000
|
|
|
$
|
0.29
|
|
|
$
|
66,000
|
|
(1)
The amounts shown are the
grant date fair value of stock options granted to each named executive officer,
in accordance with FASB ASC Topic 718 pursuant to the Black Scholes pricing
model. For a discussion of valuation assumptions used in the calculations, see
Notes 2 and 12 of Notes to Consolidated Financial Statements included in Part
II, Item 8 of our 2010 Form 10-K/A. The grant date fair values used to calculate
such compensation costs were not adjusted to take into account any estimated
forfeitures.
Outstanding
Equity Awards at Fiscal Year-End
The
following table summarizes the equity awards we have made to our named executive
officers which are outstanding as of June 30, 2010.
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexer-
cisable
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
Number
of
Shares
or
Units
of Stock
That
Have Not
Vested
(#)
|
|
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
|
|
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 ($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
(1)
|
|
Leslie
J. Browne, Ph.D.
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000,000
|
(2)
|
|
$
|
0.55
|
|
|
5/25/2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Jack
Van Hulst
|
|
|
37,500
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
0.29
|
|
|
2/19/2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
75,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
0.61
|
|
|
5/20/2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Bruce
C. Galton
|
|
|
130,000
|
(3)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.10
|
|
|
10/05/2011
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
300,000
|
(4)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.05
|
|
|
12/01/2011
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
50,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.16
|
|
|
06/19/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
30,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.15
|
|
|
12/16/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
35,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.45
|
|
|
12/16/2014
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
40,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.40
|
|
|
12/14/2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
40,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.08
|
|
|
12/14/2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Joel
P. Brooks
|
|
|
120,000
|
(6)
|
|
|
-
|
|
|
|
180,000
|
|
|
$
|
0.29
|
|
|
2/19/2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.25
|
|
|
12/01/2010
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
15,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.15
|
|
|
11/01/2011
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
12,500
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.65
|
|
|
10/09/2012
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.16
|
|
|
06/19/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
15,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.15
|
|
|
12/16/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.45
|
|
|
12/16/2014
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.40
|
|
|
12/14/2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.08
|
|
|
12/14/2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
50,000
|
(7)
|
|
$
|
16,000
|
|
Richard
Dondero
|
|
|
120,000
|
(6)
|
|
|
-
|
|
|
|
180,000
|
|
|
$
|
0.29
|
|
|
2/19/2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
10,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.45
|
|
|
12/16/2014
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.40
|
|
|
12/14/2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.08
|
|
|
12/14/2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
71,924
|
(8)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
0.99
|
|
|
12/13/2017
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
300,000
|
(7)
|
|
$
|
0.99
|
|
|
12/13/2017
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
76,000
|
(8)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
0.60
|
|
|
11/19/2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Sascha
P. Fedyszyn
|
|
|
35,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.25
|
|
|
12/01/2010
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
10,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.15
|
|
|
11/01/2011
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
10,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.65
|
|
|
10/09/2012
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.16
|
|
|
06/19/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
15,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.15
|
|
|
12/16/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.45
|
|
|
12/16/2014
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.40
|
|
|
12/14/2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.08
|
|
|
12/14/2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
John
E. Thompson Ph.D.
|
|
|
80,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.05
|
|
|
12/01/2011
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.35
|
|
|
01/07/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.15
|
|
|
12/16/2013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
55,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
3.45
|
|
|
12/16/2014
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.40
|
|
|
12/14/2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,000
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1.08
|
|
|
12/14/2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
52,676
|
(8)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
0.99
|
|
|
12/13/2017
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
250,000
|
(7)
|
|
$
|
0.99
|
|
|
12/13/2017
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
48,000
|
(8)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
0.60
|
|
|
11/19/2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
(1)
|
The
amounts in this column are calculated by multiplying the number in column
(i) by the closing price on June 30, 2010 of
$0.32.
|
(2)
|
One-third
of such options will vest on the first anniversary of the date of grant
with one-thirty-sixth of the balance vesting each month
thereafter.
|
(3)
|
100,000
of such options vested on the date of grant and an additional 10,000
options vested on each of the one month, two month and three month
anniversary of the date of grant.
|
(4)
|
100,000
of such options vested on each of the first, second and third anniversary
of the date of grant.
|
(5)
|
One-third
of such options vested on the date of grant and an additional one-third of
such options vested or will vest on each of the first and second
anniversary of the date of grant.
|
(6)
|
60,000
of such options vested on the date of grant and an additional 60,000 of
such options vested on June 30, 2010. One-third of the remaining options
will vest on each of June 30, 2011, June 30, 2012 and June 30,
2013.
|
(7)
|
Such
amounts consist of performance based RSU’s which will vest if certain
milestones are met under our long-term incentive plan. As disclosed
herein, the Second and Third LTIP Event Milestones were not met, and
therefore, the RSU’s assigned for such milestones were
forfeited.
|
(8)
|
Such
amounts consist of performance based options which have vested upon the
achievement of certain milestones or will vest if certain milestones are
met under our and long-term incentive
plan.
|
Options Exercised and Stock
Vested
The table
below shows option exercise and stock award vesting activity for our named
executive officers during the year ended June 30, 2010.
|
|
Option
Awards
|
|
|
|
|
|
Stock
Awards
|
|
|
|
|
|
|
Number
of
Shares
|
|
|
Value
|
|
|
Number
of
Shares
|
|
|
Value
|
|
|
|
Acquired
on
|
|
|
Realized
on
|
|
|
Acquired
on
|
|
|
Realized
on
|
|
|
|
Exercise
|
|
|
Exercise
|
|
|
Vesting
|
|
|
Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)(1)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leslie
J. Browne Ph.D.
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Jack
Van Hulst
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Bruce
C. Galton
|
|
|
—
|
|
|
|
—
|
|
|
|
49,500
|
|
|
$
|
19,800
|
|
Joel
P. Brooks
|
|
|
—
|
|
|
|
—
|
|
|
|
26,600
|
|
|
$
|
10,374
|
|
Sascha
Fedyszyn
|
|
|
—
|
|
|
|
—
|
|
|
|
39,900
|
|
|
$
|
15,561
|
|
Richard
Dondero
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
John
E. Thompson, Ph.D.
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(1)
|
Such
amounts in this column were calculated by multiplying the number in column
(d) by the closing price on the date of
vesting.
|
Employment
Contracts, Termination of Employment, and Change-in-Control
Arrangements
As
previously disclosed, none of our named executive officers, except Dr. Browne,
has a current employment agreement or any termination or change of control
arrangements with the Company. The terms of Dr. Browne’s employment are set
forth in an Offer Letter dated May 25, 2010 (the “Offer Letter”), whereby Dr.
Browne is entitled to an annual salary in the amount of $250,000 and to grants
of options to purchase shares of the Company’s common stock in the amount of
1,000,000 options which shall vest 25% one year from grant date (or 250,000
shares) and 1/36 of the remaining options (or 750,000 shares) shall vest on the
first of each month thereafter. In the event Dr. Browne is terminated from his
employment with the Company without Cause (as defined in the Offer Letter)
during his first year of employment, the Company will pay him six (6) months
worth of severance at his base salary which is then in effect, which shall be
paid over time in accordance with normal payroll practices, as well as six (6)
months worth of medical benefits.
Executive Severance
.
Certain of our named executive officer’s had employment agreements which
contained severance provisions. The following table shows the potential
incremental payments to our named executive officers in the event of their
termination or termination in connection with a change of control of our company
as of June 30, 2010. John E. Thompson, Ph.D. is not included in this table as he
does not currently, and did not as of June 30, 2010, have an employment contract
or any termination or change of control arrangements with the
Company.
|
|
|
|
|
|
|
|
|
|
Benefit
|
|
Without
Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
(5)
|
|
$
|
125,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
143,000
|
|
|
$
|
125,457
|
|
#
of Months
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12
|
|
|
|
12
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested
Restricted Stock
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Unvested
RSU’s
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Unvested
Options
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Common
Stock
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Other
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health,
Disability and Life Insurance
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total
|
|
$
|
125,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
143,000
|
|
|
$
|
125,457
|
|
(1)
|
Mr.
Brooks’ employment agreement terminated on June 30,
2010.
|
(2)
|
Mr.
Dondero’s employment agreement terminated on July 19,
2010.
|
(3)
|
Such
amounts are calculated using the named executive’s base salary in effect
as of June 30, 2010 multiplied by the number of months of severance the
named executive is entitled to.
|
(4)
|
Such
amounts are calculated using the named executive’s average compensation
paid during the past five years multiplied by the number of months of
severance the named executive is entitled
to.
|
(5)
|
Such
amounts are payable as a lump sum.
|
Equity
Compensation Plans
The
following table reflects information relating to equity compensation plans as of
June 30, 2010.
|
|
Number
of securities
to
be issued upon
exercise
of outstanding
options,
warrants
and
rights
|
|
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
|
|
|
Number
of securities remaining
available
for future issuance
under
equity compensation plans
|
|
Stock
Option plans approved by security holders
|
|
|
7,319,172
|
(1)
|
|
$
|
1.13
|
|
|
|
7,935,712
|
(2)
|
Equity
compensation plans not approved by security holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
|
7,319,172
|
(1)
|
|
$
|
1.13
|
|
|
|
7,935,712
|
(2)
|
|
(1)
|
Issued
pursuant to our 1998 Stock Plan and 2008 Stock
Plan.
|
|
(2)
|
Available
for future issuance pursuant to our 2008 Stock
Plan.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Our
common stock is the only class of stock entitled to vote at the Meeting. Only
our stockholders of record as of the close of business on the Record Date are
entitled to receive notice of and to vote at the Meeting. As of the Record Date,
there were 295 holders of record of our common stock, and we had outstanding
74,766,236 shares of our common stock and each outstanding share is entitled to
one (1) vote at the Meeting. The following table sets forth certain information,
as of the Record Date, with respect to holdings of our common stock by (i) each
person known by us to be the beneficial owner of more than 5% of the total
number of shares of our common stock outstanding as of such date; (ii) each of
our directors, which includes all nominees, and our Named Executives; and (iii)
all of our directors and our current executive officers as a group.
Name and Address of Beneficial Owner
(1)
|
|
Amount
and Nature of
Beneficial Ownership
(2)
|
|
|
Percent
of Class
(3)
|
|
(i) Certain
Beneficial Owners:
|
|
|
|
|
|
|
Partlet
Holdings Ltd.
|
|
|
|
|
|
|
International
House, 1
st
Floor
|
|
|
|
|
|
|
41,
The Parade
|
|
|
|
|
|
|
St.
Helier, JERSEY, Channel Islands
|
|
|
7,961,309
|
(4)
|
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
(ii)
Directors (which includes all nominees), Named Executives and Chief
Executive Officer:
|
|
|
|
|
|
|
|
|
Harlan
W. Waksal
|
|
|
3,116,280
|
(5)
|
|
|
4.0
|
%
|
John
N. Braca
|
|
|
802,130
|
(6)
|
|
|
1.1
|
%
|
Jack
Van Hulst
|
|
|
582,149
|
(7)
|
|
|
*
|
|
Christopher
Forbes
|
|
|
18,470,118
|
(8)
|
|
|
21.5
|
%
|
Warren
J. Isabelle
|
|
|
244,323
|
(9)
|
|
|
*
|
|
Thomas
C. Quick
|
|
|
1,710,694
|
(10)
|
|
|
2.3
|
%
|
David
Rector
|
|
|
959,526
|
(11)
|
|
|
1.3
|
%
|
Rudolf
Stalder
|
|
|
2,674,743
|
(12)
|
|
|
3.5
|
%
|
John
E. Thompson, Ph.D.
|
|
|
942,676
|
(13)
|
|
|
1.3
|
%
|
Joel
P. Brooks
|
|
|
303,375
|
(14)
|
|
|
*
|
|
Richard
Dondero
|
|
|
387,924
|
(15)
|
|
|
*
|
|
Leslie
J. Browne, Ph.D.
|
|
|
-
|
(16)
|
|
|
*
|
|
(iii) All
Directors and current executive officers as a group (12
persons)
|
|
|
30,193,938
|
(17)
|
|
|
32.2
|
%
|
* Less
than 1%
|
(1)
|
Unless
otherwise provided, all addresses should be care of Senesco Technologies,
Inc., 303 George Street, Suite 420, New Brunswick, New Jersey
08901.
|
|
(2)
|
Except
as otherwise indicated, all shares of common stock are beneficially owned
and sole investment and voting power is held by the persons
named.
|
|
(3)
|
Applicable
percentage of ownership is based on 74,766,236 shares of our common stock
outstanding as of the Record Date, plus any common stock equivalents and
options or warrants held by such holder which are presently or will become
exercisable within sixty (60) days after the Record
Date.
|
|
(4)
|
Includes
3,618,056 shares of common stock issuable pursuant to presently
exercisable warrants.
|
|
(5)
|
Includes
1,627,445 shares of common stock issuable pursuant to presently
exercisable warrants and options or options which will become exercisable
within sixty (60) days after the Record Date. Also includes 666,667 shares
of common stock issuable pursuant to the conversion of convertible
preferred stock at a conversion rate of $0.30. Excludes 600,000 shares of
common stock issuable pursuant to options which become exercisable after
sixty (60) days from the Record
Date.
|
|
(6)
|
Includes
664,166 shares of common stock issuable pursuant to presently exercisable
warrants and options or options which will become exercisable within sixty
(60) days after the Record Date. Excludes 75,000 shares of common stock
issuable pursuant to options which become exercisable after sixty (60)
days from the Record Date.
|
|
(7)
|
Includes
615,209 shares of common stock issuable pursuant to presently exercisable
warrants and options or options which will become exercisable within sixty
(60) days after the Record Date. Excludes 100,000 shares of common stock
issuable pursuant to options which become exercisable after sixty (60)
days from the Record Date.
|
|
(8)
|
Includes
7,699,496 shares of common stock issuable pursuant to presently
exercisable warrants and options or options which will become exercisable
within sixty (60) days after the Record Date. Also includes 3,333,333
shares of common stock issuable pursuant to the conversion of convertible
preferred stock at a conversion rate of $0.30. Excludes 62,500 shares of
common stock issuable pursuant to options which become exercisable after
sixty (60) days from the Record
Date.
|
|
(9)
|
Includes
125,000 shares of common stock issuable pursuant to presently exercisable
warrants and options or options which will become exercisable within sixty
(60) days after the Record Date. Excludes 50,000 shares of common stock
issuable pursuant to options which become exercisable after sixty (60)
days from the Record Date.
|
|
(10)
|
Represents
675,173 shares of common stock and 403,428 shares of common stock issuable
pursuant to warrants issued to Thomas C. Quick Charitable Foundation, of
which Mr. Quick is the sole trustee. Represents 139,734 shares of common
stock and 492,359 shares of common stock issuable pursuant to presently
exercisable options or options which will become exercisable within sixty
(60) days after the Record Date issued to Thomas C. Quick. Excludes 50,000
shares of common stock issuable pursuant to options issued to Thomas C.
Quick which become exercisable after sixty (60) days from the Record
Date.
|
|
(11)
|
Includes
708,780 shares of common stock issuable pursuant to presently exercisable
warrants and options or options which will become exercisable within sixty
(60) days after the Record Date. Excludes 75,000 shares of common stock
issuable pursuant to options which become exercisable after sixty (60)
days from the Record Date.
|
|
(12)
|
Includes
1,620,805 shares of common stock issuable pursuant to presently
exercisable warrants and options or options which will become exercisable
within sixty (60) days after the Record Date. Excludes 50,000 shares of
common stock issuable pursuant to options which become exercisable after
sixty (60) days from the Record
Date.
|
|
(13)
|
Represents
572,000 shares of common stock held by 2091794 Ontario Ltd., of which Dr.
Thompson is the sole owner, and 370,676 shares of common stock issuable
pursuant to presently exercisable options or options which will become
exercisable within sixty (60) days after the Record Date issued to John E.
Thompson, Ph.D. Excludes 425,000 shares of common issuable pursuant to
options which will become exercisable after sixty (60) days from the
Record Date.
|
|
(14)
|
Includes
252,500 shares of common stock issuable pursuant to presently exercisable
options or options which will become exercisable within sixty (60) days
after the Record Date. Excludes 605,000 shares of common stock issuable
pursuant to options which will become exercisable after sixty (60) days
from the Record Date.
|
|
(15)
|
Includes
387,924 shares of common stock issuable pursuant to presently exercisable
options or options which will become exercisable within sixty (60) days
after the Record Date. Excludes 605,000 shares of common stock issuable
pursuant to options which will become exercisable after sixty (60) days
from the Record Date.
|
|
(16)
|
Excludes
1,725,000 shares of common stock issuable pursuant to options which will
become exercisable after sixty (60) days from the Record
Date.
|
|
(17)
|
See
Notes 5 through 16.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Contractual
Relationships
Service
Agreements
Christopher
Forbes, our director, is also Vice Chairman of Forbes, Inc., which publishes
Forbes Magazine. Forbes, Inc. has provided and will continue to provide us
with introductions to strategic alliance partners and, from time to time, use of
its office space. In recognition of these services, during the last two
fiscal years, we granted to Forbes, Inc. warrants to purchase shares of our
common stock as follows:
|
|
|
|
|
|
|
|
Value
of Services
on
Date of Grant
|
|
|
#
of Warrant
Shares
Vested
|
|
November
19, 2008
|
|
|
500
|
|
|
$
|
0.60
|
|
|
$
|
230
|
|
|
|
500
|
|
November
17, 2010
|
|
|
5,000
|
|
|
$
|
0.26
|
|
|
$
|
1,300
|
|
|
|
1,667
|
|
The
exercise price of the warrants granted to Forbes, Inc. represented the fair
market value of our common stock on the dates of grant.
Research and Development
Agreements
Effective
September 1, 1998, we entered into a three-year research and development
agreement, which has been extended for successive periods through August 31,
2011, with John E. Thompson, Ph.D. and the University of Waterloo in Waterloo,
Ontario, Canada, referred to as the University. Dr. Thompson is our director and
officer and beneficially owns approximately 1.3% of our common stock. Dr.
Thompson is the Associate Vice President, Research and former Dean of Science of
the University. Dr. Thompson and the University will provide research and
development under our direction. Research and development expenses under this
agreement for the years ended June 30, 2010 and 2009 aggregated US $672,693 and
US $653,104, respectively. Effective December 1, 2010, we, Dr. Thompson and the
University extended the agreement for an additional nine-month period through
August 31, 2011 in the amount of CAN $434,687. As of September 30, 2010, such
amount represented approximately US $434,687.
Consulting
Agreement
Effective
May 1, 1999, we entered into a three-year consulting agreement, which has been
extended for successive periods through June 30, 2011, for research and
development with Dr. Thompson. This agreement provided for monthly payments
of $3,000 through June 2004. However, effective January 1, 2003, 2006 and
2007, the agreement was amended to increase the monthly payments from $3,000 to
$5,000, from $5,000 to $5,200, and from $5,200 to $5,417,
respectively.
Debt
/ Equity Transactions
Transaction With Stanford
Entities
As
previously disclosed in a Form 8-K filed on November 9, 2009, on November 6,
2009, each of Stanford Venture Capital Holdings, Inc., or SVCH, and Stanford
International Bank, Ltd., or SIBL (collectively SVCH and SIBL are referred to
herein as Stanford), who are the beneficial owners of a significant interest in
Senesco Technologies, Inc., simultaneously entered into definitive agreements
with certain members of the Company’s board to sell all of their respective
interests in the Company, including shares of common stock, convertible
debentures and warrants, (the “Securities”) held by each of the Stanford
entities to each of Harlan W. Waksal, M.D., Rudolf Stalder, Christopher Forbes,
David Rector, John N. Braca, Jack Van Hulst, Warren Isabelle and the Thomas C.
Quick Charitable Foundation. Each of Harlan W. Waksal, M.D., Rudolf Stalder,
Christopher Forbes, David Rector, John N. Braca, Jack Van Hulst and Warren
Isabelle are members of the Company’s board, also referred to herein as the
Insiders. The Thomas C. Quick Charitable Foundation is an affiliate of Mr.
Thomas C. Quick who is also a member of the Company’s board. Such transaction
was negotiated privately between Stanford and the foregoing persons and their
affiliates and was subject to certain closing conditions.
On
February 19, 2010, SVCH and the Insiders closed on their definitive agreement to
sell all of their Securities for an aggregate purchase price of $890,000. The
Insiders and SIBL have decided not to close on the agreement between them and
SIBL as certain closing conditions to that agreement had not been
met.
On March
4, 2010, the insiders of Senesco Technologies, Inc. who had previously purchased
all of the convertible debentures, warrants and common stock of Senesco which
were previously held by Stanford Venture Capital Holdings, Inc., notified the
Company that they have elected, subject to stockholder approval, to convert
their convertible debentures at a conversion price of $0.83. Under the terms of
the convertible debentures, such convertible debentures could have converted at
a floating conversion rate equal to the lower of $0.83, or 80 percent of the
lowest daily Volume-Weighted Average Price (VWAP) for the five-day period
immediately preceding the conversion date, which equated to $0.22. The
conversion of the debentures was approved by our stockholders on May 25,
2010.
Transaction with JMP
Securities
On
February 17, 2010, the Company entered into a credit agreement with JMP
Securities LLC, also referred to herein as the Credit Agreement. The agreement
provides the Company with, subject to certain restrictions, including the
existence of suitable collateral, up to a $3.0 million line of credit upon which
the Company may draw at any time, also referred to herein as the Line of Credit.
Any draws upon the Line of Credit accrue at a monthly interest rate of (i) the
broker rate in effect at the time of the draw (which is currently 2.0%), plus
(ii) 2.75%. There are no other conditions or fees or expenses associated with
the Line of Credit. The Line of Credit is not secured by any assets of the
Company, but it is secured by certain assets of the Chairman of our Board of
Directors, Harlan W. Waksal, M.D., which are currently held by JMP
Securities.
March 2010 Transaction with
Christopher Forbes and Harlan W. Waksal, M.D.
On June 2, 2010, we sold 1,200 shares
of 10% Series B Preferred Stock to Christopher Forbes and Harlan W. Waksal, M.D.
for cash. We received proceeds in the amount of $1,200,000.
Pursuant to the securities purchase
agreement, the Series B Preferred Stock is convertible into approximately
3,750,000 shares of our common stock. In addition, Mr. Forbes and Dr. Waksal
received immediately exercisable warrants to purchase up to approximately
3,750,000 shares of our common stock.
Each share of Preferred Stock has a
stated value of $1,000 (the “Stated Value”). Each holder of shares of Preferred
Stock is entitled to receive semi-annually dividends at the rate of 10% per
annum of the Stated Value for each share of Preferred Stock. Except in limited
circumstances, we can elect to pay the dividends in cash or shares of common
stock. If the dividends are paid in shares of common stock, such shares will be
priced at the lower of 90% of the average VWAP for the 20 days immediately
preceding the payment date or $0.224. The dividends are subject to a 30% make
whole provision.
The shares of Preferred Stock were
convertible into shares of common stock at an initial conversion price of $0.32
per share, now $0.30 per share, and are convertible at any time. The conversion
price is subject to adjustment if we sell or grant any common stock or common
stock equivalents, subject to certain exclusions, at an effective price per
share that is lower than the conversion price of the Preferred Stock. After 18
months from the date of issuance of the Preferred Stock, if our common stock
trades above $0.80 for 20 out of 30 consecutive trading days, the Preferred
Stock will no longer be subject to adjustment.
We may force conversion of the
Preferred Stock if our common stock trades above $0.80 for 20 out of 30
consecutive trading days and there is an effective registration statement for
the underlying common stock or such underlying common stock is freely tradable
under rule 144.
Warrants
Pursuant to the purchase agreement, we
delivered a Series B Warrant to each of Mr. Forbes and Dr. Waksal. Each Warrant
has an initial exercise price of $0.35 per share of common stock. The Warrants
are immediately exercisable and have a five year term.
Review and Approval of
Related Person Transactions
Our Audit
Committee Charter requires that our Audit Committee review and approve or ratify
transactions involving us and any executive officer, director, director nominee,
5% stockholder and certain of their immediate family members, also referred to
herein as a related person. The policy and procedures cover any transaction
involving a related person, also referred to herein as a related person
transaction, in which the related person has a material interest and which does
not fall under an explicitly stated exception set forth in the applicable
disclosure rules of the SEC.
A related
person transaction will be considered approved or ratified if it is authorized
by the Audit Committee after full disclosure of the related person’s interest in
the transaction. In considering related person transactions, the Audit Committee
will consider any information considered material to investors and the following
factors:
|
·
|
the
related person’s interest in the
transaction;
|
|
·
|
the
approximate dollar value of the
transaction;
|
|
·
|
whether
the transaction was undertaken in the ordinary course of our
business;
|
|
·
|
whether
the terms of the transaction are no less favorable to us than terms that
we could have reached with an unrelated third party;
and
|
|
·
|
the
purpose and potential benefit to us of the
transaction.
|
PROPOSAL
2
APPROVAL
OF AN AMENDMENT TO THE SENESCO TECHNOLOGIES, INC. 2008
INCENTIVE
COMPENSATION
PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK RESERVED
FOR
ISSUANCE THEREUNDER
We are
asking our stockholders to vote on a proposal to approve an amendment to the
2008 Incentive Compensation Plan, also referred to herein as the 2008 Plan that
will increase the maximum number of shares of our common stock reserved for
issuance over the term of the 2008 Plan as follows:
|
·
|
the
share reserve under the 2008 Plan will initially be increased by an
additional 11,867,803 shares to a total of 23,005,003 shares, which
represents 15% of the fully-diluted outstanding shares as of January 1,
2011;
|
|
·
|
on
January 1 of each calendar beginning with the calendar year 2012 and
ending with the calendar year 2015, the share reserve will automatically
increase so that the total number of shares available for issuance under
the 2008 Plan is 15% of the fully-diluted shares as of the date of such
increase, but in no event will such annual increase exceed 7,000,000
shares per year; and
|
|
·
|
the
maximum number of shares of common stock which may be issued pursuant to
options intended to be incentive stock options under the federal tax laws
shall be limited to 23,005,003 plus increased each year by the increase in
the share reserve under the automatic share increase provisions, up to a
maximum increase of 7,000,000 per
year.
|
As of
January 31, 2011, 7,317,380 shares of common stock were subject to outstanding
options under the 2008 Plan, no shares of common stock were subject to
outstanding restricted stock units under the 2008 Plan, no shares had been
issued under the 2008 Plan and 3,819,820 shares of common stock remained
available for future equity awards.
Incentive
compensation programs play a pivotal role in our efforts to attract and retain
key personnel essential to our long-term growth and financial success. The 2008
Plan is structured to provide us with more flexibility in designing cash and
equity incentive programs in an environment where a number of companies have
moved from traditional option grants to other stock or stock-based awards such
as restricted stock and restricted stock units and performance-based
compensation. Accordingly, with the 2008 Plan we have a broad array of
incentives to utilize to attract and retain key personnel.
The
proposed share increase will enable the Company to continue to attract and
retain executives and other key employees, to link incentive awards to Company
performance, to encourage employee ownership in the Company and to more closely
align the interests of employees with those of its stockholders.
In
connection with our stock-based compensation programs, we also seek to balance
the need to retain key employees with efforts to closely monitor our stock award
“burn rate” each year. Our annual burn rate is determined by dividing the
number of shares of our common stock subject to stock-based awards we grant in a
calendar year by the weighted average number of our shares of common stock
outstanding for that calendar year. In order to address any potential
stockholder concerns regarding the number of shares of common stock that will be
subject to awards that we intend to grant under the 2008 Plan in a given year,
our board commits to our stockholders that for the next five calendar years,
beginning with the January 1, 2011 the “burn rate” (with respect to grants other
than to newly-hired employees) under the 2008 Plan will not exceed 3% per year
on average.
The 2008
Plan was originally approved by our stockholders at the 2008 Annual Meeting; the
Plan was subsequently amended to increase the share reserve and such amendment
was approved by the stockholders on May 25, 2010. On January 31, 2011, our board
approved the amendment to the 2008 Plan that is the subject of this Proposal 2,
subject to the approval of the stockholders at the Meeting.
Summary
Description of 2008 Incentive Compensation Plan
The
principal terms and provisions of the 2008 Plan, as amended, are set forth
below. The summary, however, is not intended to be a complete description of all
the terms of the 2008 Plan and is qualified in its entirety by reference to the
complete text of the 2008 Plan, as amended, filed with this Proxy Statement as
Appendix A. Any stockholder who wishes to obtain a copy of the actual plan
documents may do so upon written request to our Corporate Secretary at our
principal offices at 303 George Street, Suite 420, New Brunswick, New Jersey
08901.
Types of Awards.
The following types of awards may be granted under the 2008 Plan:
options, stock appreciation rights, stock awards, restricted stock units, cash
awards, performance units and dividend equivalent rights. The principal features
of each type of award are described below.
Administration
.
The Compensation Committee
of our board has the exclusive authority to administer the 2008 Plan with
respect to awards made to our executive officers and non-employee board members
and has the authority to make awards under the 2008 Plan to all other eligible
individuals. However, our board may at any time appoint a secondary committee of
one (1) or more board members to have separate but concurrent authority with the
Compensation Committee to make awards under the 2008 Plan to individuals other
than executive officers and non-employee board members. In addition, our board
may delegate to one (1) or more executive officers the power to grant awards
under the 2008 Plan to one (1) or more employees (other than executive officers)
and to exercise such other powers under the 2008 Plan as the board may
determine. However, either the board or the Compensation Committee will fix the
terms of the awards granted by such officers and the maximum number of shares
for which the executive officers may grant such awards.
The term
“plan administrator,” as used in this summary, will mean our compensation
committee, any secondary committee and any executive officers to whom
administrative authority is delegated, to the extent each such entity or
individual is acting within the scope of its administrative authority under the
2008 Plan.
Eligibility
.
Officers and employees,
non-employee members of our board of directors (or the board of our parent or
subsidiary), as well as independent consultants and contractors, in our employ
or service or in the employ or service of our parent or subsidiary companies
(whether now existing or subsequently established) are eligible to participate
in the 2008 Plan. As of January 31, 2011, approximately 12 persons (including 3
executive officers) and 9 non-employee board members were eligible to
participate in the 2008 Plan.
Securities
Subject to 2008 Plan
.
23,005,003 shares of our
common stock will initially be reserved for issuance over the term of the 2008
Plan, including the 11,867,803 share increase subject to approval under this
proposal. This initial total number of shares represents 15% of the
fully-diluted outstanding shares of stock as of January 1, 2011. To the extent
any options or restricted stock units outstanding under the predecessor 1998
Stock Incentive Plan, also referred to herein as the 1998 Plan, on the effective
date of the 2008 Plan subsequently terminate unexercised or without the issuance
of shares, the number of shares of common stock subject to those terminated
options and restricted stock units will be added to the share reserve available
for issuance under the 2008 Plan, up to an additional 1,000,000
shares.
On January 1 of each calendar year
beginning with the calendar year 2012 and ending with the calendar year 2015,
the share reserve will automatically increase so that the total number of shares
available for issuance under the 2008 Plan as of the date of such increase is
equal to 15% of the fully-diluted outstanding shares as of such date, but in no
event will such annual increase exceed 7,000,000 shares per year.
The maximum number of shares of common
stock which may be issued pursuant to options intended to qualify as incentive
stock options under the federal tax laws shall be limited to 23,005,003 plus
increased each year by the increase in the share reserve under the automatic
share increase provisions, up to a maximum increase of 7,000,000 per
year.
Awards
made under the 2008 Plan will be subject to the following per-participant
limitations in order to provide the plan administrator with the opportunity to
structure one (1) or more of those awards as performance-based compensation
under Section 162(m) of the Internal Revenue Code (“Section
162(m)”):
|
·
|
For
awards measured in terms of shares of our common stock (whether payable in
our common stock, cash or a combination of both), no participant in the
2008 Plan may receive awards for more than 1,000,000 shares of our common
stock in any single calendar year, subject to adjustment for subsequent
stock splits, stock dividends and similar transactions. Stockholder
approval of this proposal will also constitute re-approval of that
1,000,000-share limitation for purposes Section 162(m). Accordingly, such
limitation will assure that any deductions to which we would otherwise be
entitled upon the exercise of stock options or stock appreciation rights
granted under the 2008 Plan will not be subject to the $1 million
limitation on the income tax deductibility of compensation paid per
executive officer imposed under Section 162(m). In addition, one (1) or
more shares issued under stock awards or restricted stock units may also
qualify as performance-based compensation that is not subject to the
Section 162(m) limitation, if the vesting of those shares is tied to the
attainment of the corporate performance milestones discussed in the
summary description below.
|
|
·
|
For
awards measured in terms of cash dollars at the time of grant (whether
payable in cash, shares of our common stock, or both), no participant in
the 2008 Plan may receive awards with an aggregate dollar value in excess
of $1,000,000 in any one (1) calendar year, with such limitation to be
measured at the time the award is made. Stockholder approval of this
proposal will also constitute re-approval of that $1,000,000 limitation
for purposes of Section 162(m). Accordingly, such limitation will assure
that any deductions to which we would otherwise be entitled upon the
payment of cash bonuses or the settlement of performance units will not be
subject to the $1 million limitation on the income tax deductibility of
compensation paid per executive officer imposed under Section 162(m), to
the extent the vesting of those awards is tied to the attainment of one
(1) or more of the corporate performance milestones discussed
below.
|
The
shares of common stock issuable under the 2008 Plan may be drawn from shares of
our authorized but unissued common stock or from shares of our common stock that
we acquire, including shares purchased on the open market or in private
transactions.
Shares
subject to outstanding awards under the 2008 Plan that expire or otherwise
terminate prior to the issuance of the shares subject to those awards will be
available for subsequent issuance under the 2008 Plan. Any unvested shares
issued under the 2008 Plan that are subsequently forfeited or that we
repurchase, at a price not greater than the original issue price paid per share,
pursuant to our repurchase rights under the 2008 Plan will be added back to the
number of shares reserved for issuance under the 2008 Plan and will accordingly
be available for subsequent issuance.
In
addition, the following share counting procedures will apply in determining the
number of shares of common stock available from time to time for issuance under
the 2008 Plan:
|
·
|
Should
the exercise price of an option be paid in shares of our common stock,
then the number of shares reserved for issuance under the 2008 Plan will
be reduced by the net number of shares issued under the exercised
option.
|
|
·
|
Should
shares of common stock otherwise issuable under the 2008 Plan be withheld
by us in satisfaction of the withholding taxes incurred in connection with
the issuance, exercise or settlement of an award under the plan, then the
number of shares of common stock available for issuance under the 2008
Plan will be reduced by the net number of shares actually issued after any
such share withholding.
|
|
·
|
Upon
the exercise of any stock appreciation right granted under the 2008 Plan,
the share reserve will be reduced by the net number of shares actually
issued upon such exercise.
|
Awards.
The plan administrator has complete discretion to determine which eligible
individuals are to receive awards, the time or times when those awards are to be
granted, the number of shares or amount of payment subject to each such award,
the vesting and exercise schedule (if any) to be in effect for the award, the
cash consideration (if any) payable per share subject to the award and the form
of payment in which the award is to be settled, the maximum term for which the
award is to remain outstanding, the status of any granted option as either an
incentive stock option or a non-statutory option under the federal tax laws, and
with respect to performance-based awards, the amount payable at one or more
levels of attained performance, the payout schedule and the form of
payment.
Stock
Options.
Each granted option will have an exercise price per share
determined by the plan administrator, but the exercise price will not be less
than one hundred percent (100%) of the fair market value of the option shares on
the grant date. No granted option will have a term in excess of ten (10) years.
The shares subject to each option will generally vest in one or more
installments over a specified period of service measured from the grant date or
upon the achievement of pre-established performance objectives. However, one or
more options may be structured so that they will be immediately exercisable for
any or all of the option shares. The shares acquired under such immediately
exercisable options will be subject to repurchase by us, at the lower of the
exercise price paid per share or the fair market value per share, if the
optionee ceases service prior to vesting in those shares.
Upon
cessation of service, the optionee will have a limited period of time in which
to exercise his or her outstanding options to the extent exercisable for vested
shares. The plan administrator will have complete discretion to extend the
period following the optionee’s cessation of service during which his or her
outstanding options may be exercised, provide for continued vesting during the
applicable post-service exercise period and/or accelerate the exercisability or
vesting of options in whole or in part. Such discretion may be exercised at any
time while the options remain outstanding,
Stock
Appreciation Rights
.
The 2008 Plan allows the
issuance of two types of stock appreciation rights:
|
·
|
Tandem
stock appreciation rights granted in conjunction with options which
provide the holders with the right to surrender the related option grant
for an appreciation distribution from us in an amount equal to the excess
of (i) the fair market value of the vested shares of our common stock
subject to the surrendered option over (ii) the aggregate exercise price
payable for those shares.
|
|
·
|
Stand-alone
stock appreciation rights which allow the holders to exercise those rights
as to a specific number of shares of our common stock and receive in
exchange an appreciation distribution from us in an amount equal to the
excess of (i) the fair market value of the shares of common stock as to
which those rights are exercised over (ii) the aggregate exercise price in
effect for those shares. The exercise price per share may not be less than
the fair market value per share of our common stock on the date the
stand-alone stock appreciation right is granted, and the right may not
have a term in excess of ten (10)
years.
|
The
appreciation distribution on any exercised stock appreciation right will be paid
in (i) cash, (ii) shares of our common stock or (iii) a combination of cash and
shares of our common stock. Upon cessation of service with us, the holder of a
stock appreciation right will have a limited period of time in which to exercise
that right to the extent exercisable at that time. The plan administrator has
complete discretion to extend the period following the holder’s cessation of
service during which his or her outstanding stock appreciation rights may be
exercised, provide for continued vesting during the applicable post-service
exercise period and/or accelerate the exercisability or vesting of stock
appreciation rights in whole or in part. Such discretion may be exercised at any
time while the stock appreciation rights remain outstanding.
Repricing
Prohibition.
The plan administrator may not implement any of the
following repricing programs without obtaining stockholder approval: (i) the
cancellation of outstanding options or stock appreciation rights in return for
new options or stock appreciation rights with a lower exercise price per share,
(ii) the cancellation of outstanding options or stock appreciation rights with
exercise prices per share in excess of the then current fair market value per
share of our common stock for consideration payable in our equity securities or
(iii) the direct reduction of the exercise price in effect for outstanding
options or stock appreciation rights.
Stock Awards and
Restricted Stock Units.
Shares of our common stock may be issued under
the 2008 Plan subject to performance or service vesting requirements established
by the plan administrator or as a fully-vested bonus for past services without
any cash outlay required of the recipient. Shares of our common stock may also
be issued under the 2008 Plan pursuant to restricted stock units which entitle
the recipients to receive those shares upon the attainment of designated
performance goals or the completion of a prescribed service period or upon the
expiration of a designated time period following the vesting of those units,
including (without limitation), a deferred distribution date following the
termination of the recipient’s service with us.
In order
to assure that the compensation attributable to one or more stock awards or
restricted stock units will qualify as performance-based compensation which will
not be subject to the $1 million limitation on the income tax deductibility of
the compensation paid per executive officer which is imposed under Internal
Revenue Code Section 162(m), the plan administrator will have the discretionary
authority to structure one or more such awards so that the shares of common
stock subject to those awards will vest only upon the achievement of certain
pre-established corporate performance goals based on one or more of the
following criteria: (i) pre-tax or after-tax earnings, profit or net income,
(ii) revenue or revenue growth, (iii) earnings per share, (iv) return on assets,
capital or stockholder equity, (v) total stockholder return, (vi) gross or net
profit margin, (vii) cash flow, (viii) earnings or operating income before
interest, taxes, depreciation, amortization and/or charges for stock-based
compensation, (ix) market share, (x) increases in customer base, (xi) operating
income, net operating income or net operating income after recorded tax expense;
(xii) operating profit, net operating profit or net operating profit after
recorded tax expense, (xiii) operating margin, (xiv) cost reductions or other
expense control objectives, (xv) market price of our common stock, whether
measured in absolute terms or in relationship to earnings or operating income,
(xvi) budget objectives, (xvii) working capital, (xviii) mergers, acquisitions
or divestitures or (xix) measures of customer satisfaction. Each performance
criteria may be based upon the attainment of specified levels of our performance
under one or more of the measures described above relative to the performance of
other entities and may also be based on the performance of any of our business
units or divisions or any parent or subsidiary. Each applicable performance goal
may include a minimum threshold level of performance below which no award will
be earned, levels of performance at which specified portions of an award will be
earned and a maximum level of performance at which an award will be fully
earned. Each applicable performance goal may be structured at the time of the
award to provide for appropriate adjustment for one or more of the following
items: (A) asset impairments or write-downs; (B) litigation judgments or claim
settlements; (C) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results; (D) accruals for
reorganization and restructuring programs; (E) any extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in our annual report to stockholders for the applicable
year; (F) the operations of any business acquired by us or any parent or
subsidiary or of any joint venture in which we or any parent or subsidiary
participate; (G) the divestiture of one or more business operations or the
assets thereof; or (H) the costs incurred in connection with such acquisitions
or divestitures.
Stockholder
approval of this proposal will also constitute re-approval of the foregoing
performance goals for purposes of establishing the vesting targets for one or
more awards under the 2008 Plan that are intended to qualify as
performance-based compensation under Section 162(m).
Should
the participant cease to remain in service while holding one or more unvested
shares or should the performance objectives not be attained with respect to one
or more such unvested shares, then those shares will be immediately susceptible
for cancellation. Outstanding restricted stock units will automatically
terminate, and no shares of our common stock will actually be issued in
satisfaction of those awards, if the performance goals or service requirements
established for such awards are not attained. The plan administrator, however,
will have the discretionary authority to issue shares of our common stock in
satisfaction of one or more outstanding awards as to which the designated
performance goals or service requirements are not attained. However, no vesting
requirements tied to the attainment of performance objectives may be waived with
respect to awards which were intended at the time of issuance to qualify as
performance-based compensation under Section 162(m), except in the event of a
change in control, as described under the heading “General Provisions –
Vesting
Acceleration
.”
Cash
Awards.
Cash awards vest over an eligible individual’s designated service
period or upon the attainment of pre-established performance goals. Cash awards
which become due and payable following the attainment of the applicable
performance goal and satisfaction of any service period may be paid in cash
and/or shares of our common stock.
In order
to assure that the compensation attributable to one or more cash awards will
qualify as performance-based compensation which will not be subject to the $1
million limitation on the income tax deductibility of the compensation paid per
executive officer which is imposed under Internal Revenue Code Section 162(m),
the plan administrator has the discretionary authority to structure one or more
awards so that cash or shares of common stock subject to those awards will vest
only upon the achievement of certain pre-established corporate performance goals
based on one or more of the performance goals described above in the summary of
“Stock Awards and Restricted Stock Units”.
The plan
administrator has the discretionary authority at any time to accelerate the
vesting of any and all cash awards. However, no vesting requirements tied to the
attainment of performance objectives may be waived with respect to awards which
were intended at the time of issuance to qualify as performance-based
compensation under Section 162(m), except in the event of a change in control as
described under the heading “General Provisions – Vesting
Acceleration.”
Performance
Units.
A performance unit represents a participating interest in a
special bonus pool tied to the attainment of pre-established corporate
performance objectives based on one or more performance goals described above in
the summary of “Stock Awards and Restricted Stock Units”. The amount of the
bonus pool may vary with the level at which the applicable performance
objectives are attained, and the value of each performance unit which becomes
due and payable upon the attained level of performance will be determined by
dividing the amount of the resulting bonus pool (if any) by the total number of
performance units issued and outstanding at the completion of the applicable
performance period.
Performance
units may also be structured to include a service-vesting requirement which the
participant must satisfy following the completion of the performance period in
order to vest in the performance units awarded with respect to that performance
period.
Performance
units which become due and payable following the attainment of the applicable
performance objectives and the satisfaction of any applicable service-vesting
requirement may be paid in cash and/or shares of our common stock valued at fair
market value on the payment date.
The plan
administrator will have the discretionary authority at any time to accelerate
the vesting of any and all performance units. However, no vesting requirements
tied to the attainment of performance objectives may be waived with respect to
awards which were intended at the time of issuance to qualify as
performance-based compensation under Section 162(m), except in the event of a
change in control as described under the heading “General Provisions –
Vesting
Acceleration
.”
Dividend
Equivalent Rights.
Dividend equivalent rights may be issued as
stand-alone awards or in tandem with other awards made under the 2008 Plan. Each
dividend equivalent right award will represent the right to receive the economic
equivalent of each dividend or distribution, whether in cash, securities or
other property (other than shares of our common stock) which is made per issued
and outstanding share of common stock during the term the dividend equivalent
right remains outstanding. Payment of the amounts attributable to such dividend
equivalent rights may be made either concurrently with the actual dividend or
distribution made per issued and outstanding share of our common stock or may be
deferred to a later date. Payment may be made in cash or shares of our common
stock.
Stock
Awards
The
following table sets forth, as to each person who served as our Chief Executive
Officer, our Chief Financial Officer, our three other most highly compensated
executive officers and the other individuals and groups indicated, the number of
shares of our common stock subject to option grants made under the 2008 Plan
from January 1, 2009 through January 31, 2011, together with the weighted
average exercise price per share in effect for such option grants.
|
|
Number
of Shares
Underlying
Options
Granted
(#)
|
|
|
Weighted
Average
Exercise
Price Per
Share
($)
|
|
Leslie
J. Browne, Ph.D.
|
|
|
1,725,000
|
|
|
$
|
0.43
|
|
Joel
Brooks
|
|
|
725,000
|
|
|
$
|
0.27
|
|
Richard
Dondero
|
|
|
725,000
|
|
|
$
|
0.27
|
|
John
E. Thompson, Ph.D.
|
|
|
425,000
|
|
|
$
|
0.26
|
|
All
current executive officers as a group (4 persons)
|
|
|
3,600,000
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
Directors:
|
|
|
|
|
|
|
|
|
Harlan
W. Waksal, M.D.
|
|
|
1,060,112
|
|
|
$
|
0.29
|
|
Rudolf
Stalder
|
|
|
423,409
|
|
|
$
|
0.35
|
|
Christopher
Forbes
|
|
|
395,935
|
|
|
$
|
0.37
|
|
Thomas
Quick
|
|
|
328,609
|
|
|
$
|
0.33
|
|
John
Braca
|
|
|
418,607
|
|
|
$
|
0.34
|
|
David
Rector
|
|
|
365,915
|
|
|
$
|
0.32
|
|
Jack
Van Hulst
|
|
|
507,293
|
|
|
$
|
0.36
|
|
Warren
Isabelle
|
|
|
125,000
|
|
|
$
|
0.29
|
|
All
current non-employee directors as a group (8 persons)
|
|
|
3,624,880
|
|
|
$
|
0.33
|
|
All
employees, including current officers who are not executive officers, as a
group (1 person)
|
|
|
7,500
|
|
|
$
|
0.39
|
|
New
Plan Benefits
No awards
have been made under the 2008 Plan on the basis of the share increase subject to
stockholder approval under this proposal.
General
Provisions
Vesting Acceleration
. In the
event we should experience a change in control, the following special vesting
acceleration provisions is in effect for all outstanding awards under the 2008
Plan:
|
·
|
Each
outstanding option, stock appreciation right, stock award and restricted
stock unit award will automatically accelerate in full upon a change in
control, if that award is not assumed, substituted, replaced with a cash
retention program that preserves the intrinsic value of the award and
provides for subsequent payout in accordance with the same vesting
schedule applicable to the award or otherwise continued in effect by the
successor corporation.
|
|
·
|
The
plan administrator has complete discretion to grant one or more awards
which will vest in the event the individual’s service with us or the
successor entity is terminated within a designated period following a
change in control transaction in which those awards are assumed or
otherwise continued in effect.
|
|
·
|
The
plan administrator has the discretion to structure one or more awards so
that those awards will immediately vest upon a change in control, whether
or not they are to be assumed or otherwise continued in
effect.
|
|
·
|
Unless
the plan administrator establishes a different definition for one or more
awards, a change in control will be deemed to occur for purposes of the
2008 Plan in the event (a) we are acquired by merger or asset sale or (b)
there occurs any transaction (or series of related transactions within the
twelve (12)-month period ending with the most recent acquisition) pursuant
to which any person or group of related persons becomes directly or
indirectly the beneficial owner of securities possessing (or convertible
into or exercisable for securities possessing) fifty percent (50%) or more
of the total combined voting power of our outstanding securities or (c)
there is a change in the majority of the board effected through one or
more contested elections for board
membership.
|
The plan
administrator’s authority above extends to any awards intended to qualify as
performance-based compensation under Section 162(m), even though the accelerated
vesting of those awards may result in their loss of performance-based status
under Section 162(m).
Changes in
Capitalization
.
In the event any change is made to the outstanding shares of our common
stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares, spin-off transaction or other change
in corporate structure effected without our receipt of consideration or should
the value of our outstanding shares of common stock be substantially reduced by
reason of a spin-off transaction or extraordinary dividend or distribution or
should there occur any merger, consolidation or other reorganization,
equitable adjustments
will be made to: (i) the maximum number and/or class of securities issuable
under the 2008 Plan; (ii) the maximum number and/or class of securities by which
the share reserve may increase by reason of the expiration or termination of
unexercised options or restricted stock units under the 1998 Plan, (iii) the
maximum number and/or class of securities by which the share reserve may
increase annually under the automatic share increase provisions of the 2008
Plan; (iv) the maximum number and/or class of securities for which incentive
stock options may be granted under the 2008 Plan; (v) the maximum number and/or
class of securities for which any one (1) person may be granted common
stock-denominated awards under the 2008 Plan per calendar year; (vi) the number
and/or class of securities and the exercise price per share in effect for
outstanding options and stock appreciation rights and (vii) the number and/or
class of securities subject to each outstanding stock award, restricted stock
unit, performance unit, dividend equivalent right and any other award
denominated in shares of our common stock and the cash consideration (if any)
payable per share. Such adjustments will be made in such manner as the plan
administrator deems appropriate in order to preclude any dilution or enlargement
of benefits under the 2008 Plan or the outstanding awards
thereunder.
Valuation.
The fair market value per share of our common stock on any relevant date
under the 2008 Plan is deemed to be equal to the closing selling price per share
on that date on the NYSE AMEX market. As of January 31, 2011, the fair market
value of our common stock determined on such basis was $0.28 per
share.
Stockholder
Rights and Transferability
.
No optionee has any
stockholder rights with respect to the option shares until such optionee has
exercised the option and paid the exercise price for the purchased shares. The
holder of a stock appreciation right will not have any stockholder rights with
respect to the shares subject to that right unless and until such person
exercises the right and becomes the holder of record of any shares of our common
stock distributed upon such exercise. Options are not assignable or transferable
other than by will or the laws of inheritance following optionee’s death, and
during the optionee’s lifetime, the option may only be exercised by the
optionee. However, the plan administrator may structure one or more
non-statutory options under the 2008 Plan so that those options will be
transferable during optionee’s lifetime to one or more members of the optionee’s
family or to a trust established for the optionee and/or one or more such family
members or to the optionee’s former spouse, to the extent such transfer is in
connection with the optionee’s estate plan or pursuant to a domestic relations
order. Stand alone stock appreciation rights will be subject to the same
transferability restrictions applicable to non-statutory
options.
A
participant will have full stockholder rights with respect to any shares of
common stock issued to him or her under the 2008 Plan, whether or not his or her
interest in those shares is vested. A participant will not have any stockholder
rights with respect to the shares of common stock subject to restricted stock
units until that award vests and the shares of common stock are actually issued
thereunder. However, dividend-equivalent units may be paid or credited, either
in cash or in actual or phantom shares of common stock, on outstanding
restricted stock units, subject to such terms and conditions as the plan
administrator may deem appropriate.
Special Tax
Election.
The plan administrator may provide one or more holders of
awards under the 2008 Plan with the right to have us withhold a portion of the
shares otherwise issuable to such individuals in satisfaction of the withholding
taxes to which they become subject in connection with the issuance, exercise or
settlement of those awards. Alternatively, the plan administrator may allow such
individuals to deliver previously acquired shares of our common stock in payment
of such withholding tax liability.
Amendment and
Termination
.
Our
board of directors may amend or modify the 2008 Plan at any time subject to
stockholder approval to the extent required under applicable law or regulation
or pursuant to the listing standards of the stock exchange on which our common
stock is at the time primarily traded. Unless sooner terminated by our board of
directors, the 2008 Plan will terminate on the earliest of (i) September 22,
2018, (ii) the date on which all shares available for issuance under the 2008
Plan have been issued as fully-vested shares or (iii) the termination of all
outstanding awards in connection with certain changes in control or
ownership.
Summary
of Federal Income Tax Consequences
The
following is a summary of the Federal income taxation treatment applicable to us
and the participants who receive awards under the 2008 Plan.
Option Grants.
Options
granted under the discretionary grant program may be either incentive stock
options which satisfy the requirements of Section 422 of the Internal Revenue
Code or non-statutory options which are not intended to meet such requirements.
The Federal income tax treatment for the two types of options differs as
follows:
Incentive Options.
No taxable
income is recognized by the optionee at the time of the option grant, and no
taxable income is recognized for regular tax purposes at the time the option is
exercised, although taxable income may arise at that time for alternative
minimum tax purposes. The optionee will recognize taxable income in the year in
which the purchased shares are sold or otherwise made the subject of certain
other dispositions. For Federal tax purposes, dispositions are divided into two
categories: (i) qualifying, and (ii) disqualifying. A qualifying disposition
occurs if the sale or other disposition is made more than two (2) years after
the date the option for the shares involved in such sale or disposition is
granted and more than one (1) year after the date the option is exercised for
those shares. If the sale or disposition occurs before these two periods are
satisfied, then a disqualifying disposition will result.
Upon a
qualifying disposition, the optionee will recognize long-term capital gain in an
amount equal to the excess of (i) the amount realized upon the sale or other
disposition of the purchased shares over (ii) the exercise price paid for the
shares. If there is a disqualifying disposition of the shares, then the excess
of (i) the fair market value of those shares on the exercise date or (if less)
the amount realized upon such sale or disposition over (ii) the exercise price
paid for the shares will be taxable as ordinary income to the optionee. Any
additional gain recognized upon the disposition will be a capital
gain.
If the
optionee makes a disqualifying disposition of the purchased shares, then we will
be entitled to an income tax deduction, for the taxable year in which such
disposition occurs, equal to the amount of ordinary income recognized by the
optionee as a result of the disposition. We will not be entitled to any income
tax deduction if the optionee makes a qualifying disposition of the
shares.
Non-Statutory Options.
No
taxable income is recognized by an optionee upon the grant of a non-statutory
option. The optionee will in general recognize ordinary income, in the year in
which the option is exercised, equal to the excess of the fair market value of
the purchased shares on the exercise date over the exercise price paid for the
shares, and the optionee will be required to satisfy the tax withholding
requirements applicable to such income. We will be entitled to an income tax
deduction equal to the amount of ordinary income recognized by the optionee with
respect to the exercised non-statutory option. The deduction will in general be
allowed for our taxable year in which such ordinary income is recognized by the
optionee.
Stock Appreciation Rights
. No
taxable income is recognized upon receipt of a stock appreciation right. The
holder will recognize ordinary income in the year in which the stock
appreciation right is exercised, in an amount equal to the excess of the fair
market value of the underlying shares of common stock on the exercise date over
the base price in effect for the exercised right, and the holder will be
required to satisfy the tax withholding requirements applicable to such income.
We will be entitled to an income tax deduction equal to the amount of ordinary
income recognized by the holder in connection with the exercise of the stock
appreciation right. The deduction will be allowed for the taxable year in which
such ordinary income is recognized.
Stock Awards.
The recipient
of unvested shares of common stock issued under the 2008 Plan will not recognize
any taxable income at the time those shares are issued but will have to report
as ordinary income, as and when those shares subsequently vest, an amount equal
to the excess of (i) the fair market value of the shares on the vesting date
over (ii) the cash consideration (if any) paid for the shares. The recipient
may, however, elect under Section 83(b) of the Internal Revenue Code to include
as ordinary income in the year the unvested shares are issued an amount equal to
the excess of (i) the fair market value of those shares on the issue date over
(ii) the cash consideration (if any) paid for such shares. If the Section 83(b)
election is made, the recipient will not recognize any additional income as and
when the shares subsequently vest. We will be entitled to an income tax
deduction equal to the amount of ordinary income recognized by the recipient
with respect to the unvested shares. The deduction will in general be allowed
for our taxable year in which such ordinary income is recognized by the
recipient.
Restricted Stock Units.
No
taxable income is recognized upon receipt of restricted stock units. The holder
will recognize ordinary income in the year in which the shares subject to the
units are actually issued to the holder. The amount of that income will be equal
to the fair market value of the shares on the date of issuance, and the holder
will be required to satisfy the tax withholding requirements applicable to such
income. We will be entitled to an income tax deduction equal to the amount of
ordinary income recognized by the holder at the time the shares are issued. The
deduction will be allowed for the taxable year in which such ordinary income is
recognized.
Cash Awards
. The payment of a
cash award will result in the recipient’s recognition of ordinary income equal
to the dollar amount received. The recipient will be required to satisfy the tax
withholding requirements applicable to such income. We will be entitled to an
income tax deduction equal to the amount of ordinary income recognized by the
holder at the time the cash award is paid. The deduction will be allowed for the
taxable year in which such ordinary income is recognized.
Performance Units.
No taxable
income is recognized upon receipt of performance units. The holder will
recognize ordinary income in the year in which the performance units are
settled. The amount of that income will be equal to the fair market value of the
shares of common stock or cash received in settlement of the performance units,
and the holder will be required to satisfy the tax withholding requirements
applicable to such income. We will be entitled to an income tax deduction equal
to the amount of the ordinary income recognized by the holder of the performance
units at the time those units are settled. That deduction will be allowed for
the taxable year in which such ordinary income is recognized.
Dividend Equivalent Rights
.
No taxable income is recognized upon receipt of a dividend equivalent right
award. The holder will recognize ordinary income in the year in which a dividend
or distribution, whether in cash, securities or other property, is paid to the
holder. The amount of that income will be equal to the fair market value of the
cash, securities or other property received, and the holder will be required to
satisfy the tax withholding requirements applicable to such income. We will be
entitled to an income tax deduction equal to the amount of the ordinary income
recognized by the holder of the dividend equivalent right award at the time the
dividend or distribution is paid to such holder. That deduction will be allowed
for the taxable year in which such ordinary income is recognized.
Deductibility of Executive
Compensation.
We anticipate that any compensation deemed paid by us in
connection with the exercise of non-statutory options or stock appreciation
rights will qualify as performance-based compensation for purposes of Section
162(m) and will not have to be taken into account for purposes of the $1 million
limitation per covered individual on the deductibility of the compensation paid
to certain of our executive officers. Accordingly, the compensation deemed paid
with respect to options and stock appreciation rights granted under the 2008
Plan will remain deductible by us without limitation under Section 162(m).
However, any compensation deemed paid by us in connection with shares issued
under stock awards or restricted stock units or shares or cash issued under the
incentive bonus program will be subject to the $1 million limitation, unless the
issuance of the shares or cash is tied to one or more of the performance
milestones described above.
Accounting
Treatment.
Pursuant to the accounting standards under FASB
Accounting Standards Codification Topic 718, we will be required to expense all
share-based payments, including grants of stock options, stock appreciation
rights, restricted stock, restricted stock units and all other stock-based
awards under the 2008 Plan. Accordingly, stock options and stock
appreciation rights which are granted to our employees and non-employee board
members and payable in shares of our common stock will have to be valued at fair
value as of the grant date under an appropriate valuation formula, and that
value will then have to be charged as a direct compensation expense against our
reported earnings over the designated vesting period of the
award. For shares issuable upon the vesting of restricted stock units
awarded under the 2008 Plan, we will be required to amortize over the vesting
period a compensation cost equal to the fair market value of the underlying
shares on the date of the award. If any other shares are unvested at
the time of their direct issuance, then the fair market value of those shares at
that time will be charged to our reported earnings ratably over the vesting
period. Such accounting treatment for restricted stock units and
direct stock issuances will be applicable whether vesting is tied to service
periods or performance goals, although for performance-based awards, the grant
date fair value will initially be determined on the basis of the probable
outcome of performance goal attainment. The issuance of a
fully-vested stock bonus will result in an immediate charge to our earnings
equal to the fair market value of the bonus shares on the issuance
date.
For
performance units awarded under the 2008 Plan and payable in stock, we will be
required to amortize, over the applicable performance period and any subsequent
service vesting period, a compensation cost equal to the fair market value of
the underlying shares on the date of the award. For performance units
awarded under the 2008 Plan and payable in cash, we will amortize the potential
cash expense over the applicable performance period and any subsequent service
vesting period. Dividends or dividend equivalents paid on the portion
of an award that vests will be charged against our retained
earnings. If the award holder is not required to return the dividends
or dividend equivalents if they forfeit their awards, dividends or dividend
equivalents paid on instruments that do not vest will be recognized by us as
additional compensation cost.
Finally,
it should be noted that the compensation expense accruable for performance-based
awards under the 2008 Plan will, in general, be subject to adjustment to reflect
the actual outcome of the applicable performance goals, and any expenses accrued
for such performance-based awards will be reversed if the performance goals are
not met, unless those performance goals are deemed to constitute market
conditions (i.e., because they are tied to the price of our common stock) under
FASB Accounting Standards Codification Topic 718.
Required
Vote and Board Recommendation
Provided
a quorum is present, the affirmative vote of the holders of a majority of the
shares present in person or represented by proxy and voting on this Proposal 2
is required for approval of the amendment to the 2008 Plan. Should
such approval not be obtained, then the share reserve will not be
increased. However, awards will continue to be made under the 2008
Plan until the date all the shares of our common stock currently reserved for
issuance under the 2008 Plan have been issued or any earlier termination of the
2008 Plan.
Recommendation
of the Board of Directors
The
board believes that Proposal 2 is in the Company’s best interests and in the
best interests
of
our stockholders and recommends a vote “FOR” the amendment to the 2008 Incentive
Compensation Plan.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The audit
committee of our board of directors intends to, subject to stockholder
ratification, retain McGladrey & Pullen, LLP as our independent registered
public accounting firm for the fiscal year ending June 30,
2011. Neither the firm nor any of its directors has any direct or
indirect financial interest in or any connection with us in any capacity other
than as auditors.
Although
stockholder ratification of the selection of McGladrey & Pullen, LLP, is not
required by law, our board of directors believes that it is desirable to give
our stockholders the opportunity to ratify this selection. If this
proposal is not approved at the Meeting, our board of directors will reconsider
the selection of McGladrey & Pullen, LLP.
OUR
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT
OF MCGLADREY & PULLEN, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE FISCAL YEAR ENDING JUNE 30, 2011.
Principal
Accountant Fees and Services
The
aggregate fees billed by McGladrey & Pullen, LLP and RSM McGladrey, Inc. for
services performed for the years ended June 30, 2010 and 2009 are as
follows:
|
|
2010
|
|
|
2009
|
|
Audit
Fees
|
|
$
|
91,000
|
|
|
$
|
105,000
|
|
Audit
Related Fees
|
|
|
8,500
|
|
|
|
8,000
|
|
Tax
Fees
|
|
|
-
|
|
|
|
5,815
|
|
All
Other Fees
|
|
|
-
|
|
|
|
1,715
|
|
Total
Fees
|
|
$
|
99,500
|
|
|
$
|
120,530
|
|
AUDIT
FEES
The
aggregate audit fees for the years ended June 30, 2010 and 2009 were primarily
related to the audit of the our annual financial statements and review of those
financial statements included in our quarterly reports on Form 10-Q and fees for
professional services rendered in connection with documents filed with the
Securities and Exchange Commission.
AUDIT
RELATED FEES
Audit
related fees for the years ended June 30, 2010 and 2009 were primarily incurred
in connection with our equity offerings and fees in connection with
correspondence with the SEC and the NYSE Amex.
TAX
FEES
Tax fees
for the year ended June 30, 2009 related to the review of our tax
returns.
ALL
OTHER FEES
All other
fees for the year ended June 30, 2009 related to consultations in connection
with our short-term and long-term incentive plans.
Pre-Approval
Policies and Procedures
In
accordance with its charter, the Audit Committee is required to approve all
audit and non-audit services provided by the independent auditors and shall not
engage the independent auditors to perform the specific non-audit services
prescribed by law or regulation.
The Audit
Committee has adopted policies and procedures relating to the pre-approval of
all audit and non-audit services that are to be performed by our independent
registered public accounting firm. This policy generally provides
that we will not engage our independent registered public accounting firm to
render audit or non-audit services unless the service is specifically approved
in advance by the Audit Committee or the engagement is entered into pursuant to
one of the pre-approval procedures described below.
From time
to time, the Audit Committee may pre-approve specified types of services that
are expected to be provided to us by our independent registered public
accounting firm during the next 12 months. Any such pre-approval is
detailed as to the particular service or type of services to be provided and is
also generally subject to a maximum dollar amount.
The Audit
Committee has also delegated to the chairman of the Audit Committee the
authority to approve any audit or non-audit services to be provided to us by our
independent registered public accounting firm. Any approval of
services by a member of the Audit Committee pursuant to this delegated authority
is reported on at the next meeting of the Audit Committee.
A
representative of McGladrey & Pullen, LLP is expected to be present at the
annual meeting. The representative will have an opportunity to make a statement
and will be available to respond to appropriate questions.
Audit
Committee Report
The Audit
Committee oversees our financial reporting process on behalf of the
board. The Audit Committee consists of three members of the board who
meet the independence and experience requirements of the NYSE
/Amex.
On June
27, 2008, we amended and restated our Audit Committee Charter, which was
originally adopted on July 26, 1999.
The Audit
Committee held six (6) meetings during Fiscal 2010.
Management
is responsible for our financial reporting process including its system of
internal controls and for the preparation of consolidated financial statements
in accordance with generally accepted accounting principles. Our independent
registered public accounting firm is responsible for auditing those financial
statements. The Audit Committee’s responsibility is to monitor and review these
processes. As appropriate, the Audit Committee reviews and evaluates,
and discusses with our management and our independent registered public
accounting firm, the following:
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·
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the
plan for, and the independent registered public accounting firm’s report
on, each audit of our financial
statements;
|
|
·
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the
independent registered public accounting firm’s review of our unaudited
interim financial statements;
|
|
·
|
our
financial disclosure documents, including all financial statements and
reports filed with the Securities and Exchange Commission or sent to
stockholders;
|
|
·
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our
management’s selection, application and disclosure of critical accounting
policies;
|
|
·
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changes
in our accounting practices, principles, controls or
methodologies;
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·
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significant
developments or changes in accounting rules applicable to us;
and
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·
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the
adequacy of our internal controls and accounting and financial
personnel.
|
The Audit
Committee reviewed and discussed with our management our audited financial
statements for the year ended June 30, 2010. The Audit Committee also
reviewed and discussed the audited financial statements and the matters required
by Statement on Auditing Standards No. 61, titled Communication with Audit
Committees, with our independent registered public accounting firm. These
standards require our independent registered public accounting firm to discuss
with our Audit Committee, among other things, the following:
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·
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methods
used to account for significant unusual
transactions;
|
|
·
|
the
effect of significant accounting policies in controversial or emerging
areas for which there is a lack of authoritative guidance or
consensus;
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|
·
|
the
process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditors’ conclusions regarding
the reasonableness of those estimates;
and
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|
·
|
disagreements
with management over the application of accounting principles, the basis
for management’s accounting estimates and the disclosures in the financial
statements.
|
The Audit
Committee has received the written disclosures from the independent registered
public accounting firm required by the applicable requirements of the Public
Company Accounting Oversight Board regarding the independent accountants’
communications with the audit committee concerning independence, as currently in
effect, and has considered whether the provision of non-audit services by the
independent registered public accounting firm to us is compatible with
maintaining the auditor’s independence and has discussed with the auditors the
auditors’ independence.
Based on
our discussions with management and our independent registered public accounting
firm, and our review of the representations and information provided by our
management and our independent registered public accounting firm, the Audit
Committee recommended to our board that the audited financial statements be
included in our annual report on Form 10-K/A for the year ended June 30,
2010.
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By
the Audit Committee of the Board of Directors of
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Senesco
Technologies, Inc.
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John
N. Braca, Chairman
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Rudolf
Stalder
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David
Rector
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The above
Audit Committee report is not deemed to be “soliciting material,” is not “filed”
with the SEC and is not incorporated by reference in any filings including Form
S-3 that we file with the SEC.
STOCKHOLDERS’
PROPOSALS
Stockholders
may submit proposals on matters appropriate for stockholder action at annual
meetings in accordance with the rules and regulations adopted by the Securities
and Exchange Commission. Any proposal that an eligible stockholder
wishes to submit for inclusion in our proxy statement must advise our Secretary
of such proposals in writing by October 11, 2011. Such proposal will
be included if it complies with Securities and Exchange Commission rules
regarding inclusion of proposals in proxy statements.
Stockholders
who intend to submit a proposal at such meeting without inclusion in our proxy
statement must advise our Secretary of such proposals in writing by December 25,
2011.
If we do
not receive notice of a stockholder proposal within the timeframes set forth
above, our management will use its discretionary authority to vote the shares
they represent, as our board of directors may recommend. We reserve
the right to reject, rule out of order, or take other appropriate action with
respect to any proposal that does not comply with these
requirements.
FINANCIAL
INFORMATION
Financial
and other information concerning our company is contained in our Annual Report
for the fiscal year ended June 30, 2010, as amended, which has been mailed to
you along with this proxy statement. This proxy statement and our
June 30, 2010 Annual Report are also available on our website at
www.senesco.com
.
HOUSEHOLDING
OF ANNUAL MEETING MATERIALS
Some
banks, brokers and other nominee record holders may be participating in the
practice of “householding” proxy statements and annual reports. This
means that only one (1) copy of our proxy statement or annual report may have
been sent to multiple stockholders in your household. We will
promptly deliver a separate copy of either document to you if you call or write
us at the following address or phone number: Senesco Technologies,
Inc., 303 George Street, Suite 420, New Brunswick, New Jersey 08901, (732)
296-8400. If you want to receive separate copies of the annual report
and proxy statement in the future or if you are receiving multiple copies and
would like to receive only one (1) copy for your household, you should contact
your bank, broker, or other nominee record holders, or you may contact us at the
above address and phone number.
OTHER
MATTERS
Our board
is not aware of any matter to be presented for action at the Meeting other than
the matters referred to above and does not intend to bring any other matters
before the Meeting. However, if other matters should come before the
Meeting, it is intended that holders of the proxies will vote thereon in their
discretion.
GENERAL
The
accompanying proxy is solicited by and on behalf of our board, whose notice of
meeting is attached to this proxy statement, and the entire cost of such
solicitation will be borne by us. Our officers and selected employees
may solicit proxies from stockholders. In addition to the use of the
mails, proxies may be solicited by personal interview, telephone and telegram by
our directors, officers and other employees who will not be specially
compensated for these services. We will also request that brokers, nominees,
custodians and other fiduciaries forward soliciting materials to the beneficial
owners of shares held of record by such brokers, nominees, custodians and other
fiduciaries. We will reimburse such persons for their reasonable
expenses in connection therewith.
Certain
information contained in this proxy statement relating to the occupations and
security holdings of our directors and officers is based upon information
received from the individual directors and officers.
WE
WILL FURNISH, WITHOUT CHARGE, A COPY OF OUR REPORT ON FORM 10-K/A FOR THE YEAR
ENDED JUNE 30, 2010, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO, BUT
NOT INCLUDING EXHIBITS, TO EACH OF OUR STOCKHOLDERS OF RECORD ON JANUARY 31,
2011 AND TO EACH BENEFICIAL STOCKHOLDER ON THAT DATE UPON WRITTEN REQUEST MADE
TO OUR SECRETARY. A REASONABLE FEE WILL BE CHARGED FOR COPIES OF
REQUESTED EXHIBITS.
PLEASE
DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE
APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
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By
Order of the Board of Directors
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/s/
Joel Brooks
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Joel
Brooks
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Secretary
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New
Brunswick, New Jersey
February
11, 2011
APPENDIX
A
SENESCO
TECHNOLOGIES, INC.
2008 INCENTIVE COMPENSATION
PLAN
(As
Amended and Restated January 31, 2011)
ARTICLE
ONE
GENERAL
PROVISIONS
I.
PURPOSE OF THE
PLAN
This 2008
Incentive Compensation Plan (the “Plan”) is intended to promote the interests of
Senesco Technologies, Inc., a Delaware corporation, by providing eligible
persons in the Corporation’s service with the opportunity to participate in one
or more cash or equity incentive compensation programs designed to encourage
them to continue their service relationship with the Corporation.
The Plan
serves as the successor to the Corporation’s 1998 Stock Incentive Plan (the
“Predecessor Plan”), and no further awards shall be granted under the
Predecessor Plan after the Plan Effective Date. All awards outstanding under the
Predecessor Plan on the Plan Effective Date shall continue to be governed solely
by the terms of the documents evidencing such award, and no provision of the
Plan shall be deemed to affect or otherwise modify the rights or obligations of
the holders of such transferred awards.
Capitalized
terms shall have the meanings assigned to such terms in the attached
Appendix.
II.
TYPES OF AWARDS
Awards
may be made under the Plan in the form of (i) options, (ii) stock
appreciation rights, (iii) stock awards, (iv) restricted stock units,
(v) cash awards, (vi) performance units, and (vii) dividend equivalent
rights.
III.
ADMINISTRATION OF THE
PLAN
A.
The Compensation Committee shall have sole and exclusive authority to administer
the Plan with respect to Section 16 Insiders. Administration of the Plan
with respect to all other persons eligible to participate in the Plan may, at
the Board’s discretion, be vested in the Compensation Committee or a Secondary
Board Committee, or the Board may retain the power to administer those programs
with respect to such persons.
B. Members
of the Compensation Committee or any Secondary Board Committee shall serve for
such period of time as the Board may determine and may be removed by the Board
at any time. The Board may also at any time terminate the functions of any
Secondary Board Committee and reassume all powers and authority previously
delegated to such committee.
C. To
the extent permitted by and consistent with applicable law, the Board may
delegate to one or more executive officers the power to grant awards to
employees other than Section 16 Insiders.
D. Each
Plan Administrator shall, within the scope of its administrative functions under
the Plan, have full power and authority (subject to the provisions of the Plan)
to establish such rules and regulations as it may deem appropriate for proper
administration of the Plan and to make such determinations under, and issue such
interpretations of, the provisions of the Plan and any outstanding Awards
thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions under the Plan
shall be final and binding on all parties who have an interest in the Plan under
its jurisdiction or any Award thereunder.
E. Service
as a Plan Administrator by the members of the Compensation Committee or the
Secondary Board Committee shall constitute service as Board members, and the
members of each such committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their service on such
committee. No member of the Compensation Committee or the Secondary Board
Committee shall be liable for any act or omission made in good faith with
respect to the Plan or any Award thereunder.
IV.
ELIGIBILITY
A. The
persons eligible to participate in the Plan are as follows:
(i) Employees,
(ii) non-employee
members of the Board or the board of directors of any Parent or Subsidiary,
and
(iii) consultants
and other independent advisors who provide services to the Corporation (or any
Parent or Subsidiary).
B. The
Plan Administrator shall have full authority to determine which eligible persons
are to receive Awards under the Plan, the time or times when those Awards are to
be made, the number of shares to be covered by each such Award, the time or
times when the Award is to become exercisable, the status of an option for
federal tax purposes, the maximum term for which an option or stock appreciation
right is to remain outstanding, the vesting and issuance schedules applicable to
the shares which are the subject of the Award, the cash consideration (if any)
payable for those shares and the form (cash or shares of Common Stock) in which
the Award is to be settled and, with respect to performance–based Awards, the
performance objectives for each such Award, the amounts payable at designated
levels of attained performance, any applicable service vesting requirements, and
the payout schedule for each such Award.
V.
STOCK SUBJECT TO THE
PLAN
A. The
stock issuable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the Corporation on the
open market. The number of shares of Common Stock initially reserved for
issuance over the term of the Plan shall be limited to Twenty Three Million Five
Thousand Three (23,005,003) shares. Such reserve shall consist of
(i) the number of shares of Common Stock estimated to remain available for
issuance, as of the Plan Effective Date, under the Predecessor Plan as last
approved by the Corporation’s stockholders (excluding shares subject to
outstanding awards under the Predecessor Plan), plus (ii) an additional
increase of Four Million (4,000,000) shares plus (iii) an additional increase of
Five Million (5,000,000) shares approved by the Board on March 25, 2010 and
approved by the stockholders at the 2010 Annual Meeting plus (iv) an additional
increase of Eleven Million Eight Hundred Sixty-Seven Thousand Eight Hundred
Three (11,867,803) shares approved by the Board on January 31, 2011 subject to
stockholder approval at the 2011 Annual Meeting. To the extent any
options or restricted stock units outstanding under the Predecessor Plan on the
Plan Effective Date expire or terminate unexercised or without the issuance of
shares thereunder, the number of shares of Common Stock subject to those expired
or terminated options and restricted stock units at the time of expiration or
termination shall be added to the share reserve under this Plan and shall
accordingly be available for issuance hereunder, up to a maximum of an
additional One Million (1,000,000) shares.
B. On
January 1 of each calendar year, beginning in calendar year 2012 and ending with
the calendar year 2015, the share reserve will automatically increase so that
the number of shares of Common Stock reserved for issuance over the term of the
Plan shall be equal to fifteen percent (15%) of the fully-diluted outstanding
shares of Common Stock on such date, provided, however, that in no event shall
such annual increase exceed Seven Million (7,000,000) shares per
year.
C. The
maximum number of shares of Common Stock which may be issued pursuant to
Incentive Options granted under the Plan shall be limited to Twenty Three
Million Five Thousand Three Shares (23,005,003) plus increased each year by the
increase in the share reserve under the automatic share increase provisions
under Section V.B. of this Article One, up to a maximum increase of Seven
Million Shares (7,000,000) per year.
D. Each
person participating in the Plan shall be subject the following
limitations:
(i) for
Awards denominated in shares of Common Stock (whether payable in Common Stock,
cash or a combination of both), the maximum number of shares of Common Stock for
which such Awards may be made to such person in any calendar year shall not
exceed One Million (1,000,000) shares of Common Stock in the aggregate,
and
(ii) for
Awards denominated in dollars (whether payable in cash, Common Stock or a
combination of both), the maximum dollar amount for which such Awards may be
made in the aggregate to such person shall not exceed One Million Dollars
($1,000,000) per calendar year within the applicable service or performance
measurement period.
E. Shares
of Common Stock subject to outstanding Awards made under the Plan (including
Awards transferred to this Plan from the Predecessor Plan) shall be available
for subsequent issuance under the Plan to the extent those Awards expire or
terminate for any reason prior to the issuance of the shares of Common Stock
subject to those Awards. Unvested shares issued under the Plan and subsequently
forfeited or repurchased by the Corporation, at a price per share not greater
than the original issue price paid per share, pursuant to the Corporation’s
repurchase rights under the Plan shall be added back to the number of shares of
Common Stock reserved for issuance under the Plan and shall accordingly be
available for subsequent reissuance. Should the exercise price of an option
under the Plan be paid with shares of Common Stock, then the authorized reserve
of Common Stock under the Plan shall be reduced only by the net number of shares
issued under the exercised stock option and not by the gross number of shares
for which that option is exercised. Upon the exercise of any stock appreciation
right under the Plan, the share reserve shall be reduced only by the net number
of shares actually issued by the Corporation upon such exercise and not by the
gross number of shares as to which such right is exercised. If shares of Common
Stock otherwise issuable under the Plan are withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise,
vesting or settlement of an Award, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the net number of
shares issued after such share withholding.
F. Should
any change be made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares, spin-off
transaction or other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration, or should the value of
outstanding shares of Common Stock be substantially reduced as a result of a
spin-off transaction or an extraordinary dividend or distribution, or should
there occur any merger, consolidation or other reorganization, then equitable
adjustments shall be made by the Plan Administrator to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the maximum
number and/or class of securities by which the share reserve under the Plan may
increase by reason of the expiration or termination of options or restricted
stock units under the Predecessor Plan, (iii) the maximum number and/or
class of securities by which the share reserve under the Plan may increase each
year under the automatic share increase provisions, (iv) the maximum number
and/or class of securities that may be issued under the Plan pursuant to
Incentive Options, (v) the maximum number and/or class of securities for which
any one person may be granted Common Stock-denominated Awards under the Plan per
calendar year, (vi) the number and/or class of securities and the exercise
or base price per share in effect under each outstanding award under the Plan
and the cash consideration (if any) payable per share, and (vii) the number
and/or class of securities subject to the Corporation’s outstanding repurchase
rights under the Plan and the repurchase price payable per share. The
adjustments shall be made in such manner as the Plan Administrator deems
appropriate in order to prevent the dilution or enlargement of benefits under
the Plan and the outstanding Awards thereunder, and such adjustments shall be
final, binding and conclusive. In the event of a Change in Control, however, the
adjustments (if any) shall be made solely in accordance with the applicable
provisions of the Plan governing Change in Control transactions.
G. Outstanding
Awards granted pursuant to the Plan shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
ARTICLE
TWO
AWARDS
I.
OPTIONS
A.
Authority
.
The Plan Administrator shall have full power and authority, exercisable in its
sole discretion, to grant Incentive Options and Nonstatutory Options evidenced
by one or more Award Agreements in the form approved by the Plan Administrator;
provided, however, that each such agreement shall comply with the terms
specified below. Each agreement evidencing an Incentive Option shall, in
addition, be subject to the provisions of Section H below.
B.
Exercise
Price
.
(i) The
exercise price per share shall be fixed by the Plan Administrator;
provided,
however,
that such exercise price shall not be less than one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the grant
date.
(ii) The
exercise price shall become immediately due upon exercise of the option and
shall, subject to the provisions of the documents evidencing the option, be
payable in one or more of the forms specified below:
(1) cash
or check made payable to the Corporation,
(2) shares
of Common Stock (whether delivered in the form of actual stock certificates or
through attestation of ownership) held for the requisite period (if any)
necessary to avoid any resulting charge to the Corporation’s earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date, or
(3) to
the extent the option is exercised for vested shares of Common Stock, through a
special sale and remittance procedure pursuant to which the Participant shall
concurrently provide instructions to (a) a brokerage firm (reasonably
satisfactory to the Corporation for purposes of administering such procedure in
compliance with the Corporation’s pre-clearance/pre-notification policies) to
effect the immediate sale of the purchased shares and remit to the Corporation,
out of the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares plus all
applicable income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm
on such settlement date in order to complete the sale.
Except to
the extent such sale and remittance procedure is utilized, payment of the
exercise price for the purchased shares must be made on the Exercise
Date.
C.
Exercise
and Term of Options
.
Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
Award Agreements evidencing the option. However, no option shall have a term in
excess of ten (10) years measured from the option grant
date.
D.
Effect of
Termination of Service
.
(i) The
following provisions shall govern the exercise of any options that are
outstanding at the time of the Participant’s cessation of Service or
death:
(1) Any
option outstanding at the time of the Participant’s cessation of Service for any
reason shall remain exercisable for such period of time thereafter as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option, but no such option shall be exercisable after the expiration of the
option term.
(2) Any
option held by the Participant at the time of the Participant’s death and
exercisable in whole or in part at that time may be subsequently exercised by
the personal representative of the Participant’s estate or by the person or
persons to whom the option is transferred pursuant to the Participant’s will or
the laws of inheritance or by the Participant’s designated beneficiary or
beneficiaries of that option.
(3) Should
the Participant’s Service be terminated for Misconduct or should the Participant
otherwise engage in Misconduct while holding one or more outstanding options
granted under this Article Two, then all of those options shall terminate
immediately and cease to be outstanding.
(4) During
the applicable post-Service exercise period, the option may not be exercised for
more than the number of vested shares for which the option is at the time
exercisable;
provided,
however,
that one or more options may be structured so that those options
continue to vest in whole or part during the applicable post-Service exercise
period. Upon the expiration of the applicable exercise period or (if earlier)
upon the expiration of the option term, the option shall terminate and cease to
be outstanding for any shares for which the option has not been
exercised.
(ii) The
Plan Administrator shall have complete discretion, exercisable either at the
time an option is granted or at any time while the option remains outstanding,
to:
(1) extend
the period of time for which the option is to remain exercisable following the
Participant’s cessation of Service from the limited exercise period otherwise in
effect for that option to such greater period of time as the Plan Administrator
shall deem appropriate, but in no event beyond the expiration of the option
term;
(2) include
an automatic extension provision whereby the specified post-Service exercise
period in effect for any option shall automatically be extended by an additional
period of time equal in duration to any interval within the specified
post-Service exercise period during which the exercise of that option or the
immediate sale of the shares acquired under such option could not be effected in
compliance with applicable federal and state securities laws, but in no event
shall such an extension result in the continuation of such option beyond the
expiration date of the term of that option; and/or
(3) permit
the option to be exercised, during the applicable post-Service exercise period,
not only with respect to the number of vested shares of Common Stock for which
such option is exercisable at the time of the Participant’s cessation of Service
but also with respect to one or more additional installments in which the
Participant would have vested had the Participant continued in
Service.
E.
Stockholder
Rights
.
The
holder of an option shall have no stockholder rights with respect to the shares
subject to the option until such person shall have exercised the option, paid
the exercise price and become a holder of record of the purchased
shares.
F.
Repurchase
Rights
.
The Plan
Administrator shall have the discretion to grant options which are exercisable
for unvested shares of Common Stock. Should the Participant cease Service while
such shares are unvested, the Corporation shall have the right to repurchase any
or all of those unvested shares at a price per share equal to the
lower
of
(i) the exercise price paid per share or (ii) the Fair Market Value
per share of Common Stock at the time of repurchase. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document evidencing
such repurchase right.
G.
Transferability
of Options
. The transferability of options granted under the Plan shall
be governed by the following provisions:
(i)
Incentive
Options
: During the lifetime of the Participant, Incentive Options shall
be exercisable only by the Participant and shall not be assignable or
transferable other than by will or the laws of inheritance following the
Participant’s death.
(ii)
Non-Statutory
Options
. Non-Statutory Options shall be subject to the same limitation on
transfer as Incentive Options, except that the Plan Administrator may structure
one or more Non-Statutory Options so that the option may be assigned in whole or
in part during the Participant’s lifetime. The assigned portion may only be
exercised by the person or persons who acquire a proprietary interest in the
option pursuant to the assignment. The terms applicable to the assigned portion
shall be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate.
(iii)
Beneficiary
Designation
.
Notwithstanding the foregoing, the Participant may designate one or more persons
as the beneficiary or beneficiaries of his or her outstanding options, and those
options shall, in accordance with such designation, automatically be transferred
to such beneficiary or beneficiaries upon the Participant’s death while holding
those options. Such beneficiary or beneficiaries shall take the transferred
options subject to all the terms and conditions of the applicable agreement
evidencing each such transferred option, including (without limitation) the
limited time period during which the option may be exercised following the
Participant’s death.
H.
Incentive
Options
. The terms specified below shall be applicable to all Incentive
Options.
(i)
Eligibility
.
Incentive Options may only be granted to Employees.
(ii)
Dollar
Limitation
. The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which one or more
options granted to any Employee under the Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000).
To the
extent the Employee holds two (2) or more such options which become
exercisable for the first time in the same calendar year, then for purposes of
the foregoing limitations on the exercisability of those options as Incentive
Options, such options shall be deemed to become first exercisable in that
calendar year on the basis of the chronological order in which they were
granted, except to the extent otherwise provided under applicable law or
regulation.
(iii)
10%
Stockholder
. If any Employee to whom an Incentive Option is granted is a
10% Stockholder, then the exercise price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value per share of Common Stock on
the option grant date, and the option term shall not exceed five (5) years
measured from the option grant date.
I.
Prohibition
on Repricing Programs
. The Plan Administrator shall not (i)
implement any cancellation/regrant program pursuant to which outstanding options
or stock appreciation rights under the Plan are cancelled and new options or
stock appreciation rights are granted in replacement with a lower exercise price
per share, (ii) cancel outstanding options or stock appreciation rights under
the Plan with exercise or base prices per share in excess of the then current
Fair Market Value per share of Common Stock for consideration payable in equity
securities of the Corporation, or (iii) otherwise directly reduce the exercise
price in effect for outstanding options or stock appreciation rights under the
Plan, without in each such instance obtaining stockholder
approval.
II.
STOCK APPRECIATION
RIGHTS
A.
Authority
.
The Plan Administrator shall have full power and authority, exercisable in its
sole discretion, to grant stock appreciation rights evidenced by one or more
Award Agreements in the form approved by the Plan Administrator which complies
with the terms specified below.
B.
Types
.
Two types of stock appreciation rights shall be authorized for issuance under
this Section II: (i) tandem stock appreciation rights (“Tandem
Rights”) and (ii) stand-alone stock appreciation rights (“Stand-alone
Rights”).
C.
Tandem
Rights
. The following terms and conditions shall govern the grant and
exercise of Tandem Rights.
(i) One
or more Participants may be granted a Tandem Right, exercisable upon such terms
and conditions as the Plan Administrator may establish, to elect between the
exercise of the underlying option for shares of Common Stock or the surrender of
that option in exchange for a distribution from the Corporation in an amount
equal to the excess of (i) the Fair Market Value (on the option surrender
date) of the number of shares in which the Participant is at the time vested
under the surrendered option (or surrendered portion thereof) over (ii) the
aggregate exercise price payable for such vested shares.
(ii) Any
distribution to which the Participant becomes entitled upon the exercise of a
Tandem Right may be made in (i) shares of Common Stock valued at Fair
Market Value on the option surrender date, (ii) cash or (iii) a
combination of cash and shares of Common Stock, as specified in the applicable
Award agreement.
D.
Stand-Alone
Rights
. The following terms and conditions shall govern the grant and
exercise of Stand-alone Rights:
(i) One
or more Participants may be granted a Stand-alone Right not tied to any
underlying option. The Stand-alone Right shall relate to a specified number of
shares of Common Stock and shall be exercisable upon such terms and conditions
as the Plan Administrator may establish. In no event, however, may the
Stand-alone Right have a maximum term in excess of ten (10) years measured
from the grant date.
(ii) Upon
exercise of the Stand-alone Right, the holder shall be entitled to receive a
distribution from the Corporation in an amount equal to the excess of
(i) the aggregate Fair Market Value (on the exercise date) of the shares of
Common Stock underlying the exercised right over (ii) the aggregate base
price in effect for those shares.
(iii) The
number of shares of Common Stock underlying each Stand-alone Right and the base
price in effect for those shares shall be determined by the Plan Administrator
in its sole discretion at the time the Stand-alone Right is granted. In no
event, however, may the base price per share be less than the Fair Market Value
per underlying share of Common Stock on the grant date.
(iv) Stand-alone
Rights shall be subject to the same transferability restrictions applicable to
Non-Statutory Options and may not be transferred during the holder’s lifetime,
except to the extent otherwise provided in the applicable Award Agreement. In
addition, one or more beneficiaries may be designated for an outstanding
Stand-alone Right in accordance with substantially the same terms and provisions
as set forth in Section I.G.(iii) of this Article Two.
(v) The
distribution with respect to an exercised Stand-alone Right may be made in
(i) shares of Common Stock valued at Fair Market Value on the exercise
date, (ii) cash or (iii) a combination of cash and shares of Common
Stock, as specified in the applicable Award agreement.
(vi) The
holder of a Stand-alone Right shall have no stockholder rights with respect to
the shares subject to the Stand-alone Right unless and until such person shall
have exercised the Stand-alone Right and become a holder of record of the shares
of Common Stock issued upon the exercise of such Stand-alone Right.
E.
Post-Service
Exercise
. The provisions governing the exercise of Tandem and Stand-alone
Rights following the cessation of the Participant’s Service shall be
substantially the same as those set forth in Section I.C. of this Article
Two for the options granted under the Plan, and the Plan Administrator’s
discretionary authority under Section I.C.(ii) of this Article Two shall
also extend to any outstanding Tandem or Stand-alone Appreciation
Rights.
III.
STOCK AWARDS
A.
Authority
.
The Plan Administrator shall have full power and authority, exercisable in its
sole discretion, to grant stock awards either as vested or unvested shares of
Common Stock, through direct and immediate issuances. Each stock
award shall be evidenced by one or more Award Agreements in the form approved by
the Plan Administrator; provided, however, that each such agreement shall comply
with the terms specified below.
B.
Issue
Price/Consideration
.
(i) Shares
of Common Stock may be issued under a stock award for a price per share fixed by
the Plan Administrator at the time of the Award, but in no event shall such
issue price be less than one hundred percent (100%) of the Fair Market Value per
share of Common Stock on the Award date.
(ii) Shares
of Common Stock may be issued under a stock award for any of the following items
of consideration which the Plan Administrator may deem appropriate in each
individual instance:
(1) cash;
(2) past
services rendered or to be rendered the Corporation (or any Parent or
Subsidiary); or
(3) any
other valid consideration under the State in which the Corporation is at the
time incorporated.
C.
Vesting
Provisions
.
(i) Stock
awards may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance as a bonus for Service rendered or may vest in
one or more installments over the Participant’s period of Service and/or upon
the attainment of specified performance objectives. The elements of the vesting
schedule applicable to any stock award shall be determined by the Plan
Administrator and incorporated into the Award Agreement.
(ii) The
Plan Administrator shall also have the discretionary authority, consistent with
Code Section 162(m), to structure one or more stock awards so that the
shares of Common Stock subject to those Awards shall vest upon the achievement
of pre-established performance objectives based on one or more Performance Goals
and measured over the performance period specified by the Plan Administrator at
the time of the grant of the Award.
(iii) Should
the Participant cease to remain in Service while holding one or more unvested
shares of Common Stock issued under a stock award or should the performance
objectives not be attained with respect to one or more such unvested shares of
Common Stock, then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent, the Corporation shall repay to the Participant the
lower
of
(i) the cash consideration paid for the surrendered shares or (ii) the
Fair Market Value of those shares at the time of cancellation.
(iv) The
Plan Administrator may in its discretion waive the surrender and cancellation of
one or more unvested shares of Common Stock which would otherwise occur upon the
cessation of the Participant’s Service or the non-attainment of the performance
objectives applicable to those shares. Any such waiver shall result in the
immediate vesting of the Participant’s interest in the shares of Common Stock as
to which the waiver applies. Such waiver may be effected at any time, whether
before or after the Participant’s cessation of Service or the attainment or
non-attainment of the applicable performance objectives. However, no vesting
requirements tied to the attainment of performance objectives may be waived with
respect to shares which were intended at the time of issuance to qualify as
performance-based compensation under Code Section 162(m), except in the
event of the Participant’s Involuntary Termination with respect to Awards made
prior to January 1, 2009 or as otherwise provided in Section VIII of
this Article Two.
(v) Any
new, substituted or additional securities or other property (including money
paid other than as a regular cash dividend) which the Participant may have the
right to receive with respect to the Participant’s unvested shares of Common
Stock by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchange of shares, spin-off transaction, extraordinary
dividend or distribution
or other change
affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant’s unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem
appropriate, unless and to the extent the Plan Administrator determines at the
time to vest and distribute such securities or other property. Equitable
adjustments to reflect each such transaction shall also be made by the Plan
Administrator to the repurchase price payable per share by the Corporation for
any unvested securities subject to its existing repurchase rights under the
Plan; provided the aggregate repurchase price shall in each instance remain the
same.
D.
Stockholder
Rights
. The Participant shall have full stockholder rights with respect
to any shares of Common Stock issued to the Participant under a stock award,
whether or not the Participant’s interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such shares and to
receive any dividends paid on such shares, subject to any applicable vesting
requirements.
IV.
RESTRICTED STOCK
UNITS
A.
Authority
.
The Plan Administrator shall have the full power and authority, exercisable in
its sole discretion, to grant restricted stock units which entitle the
Participants to receive the shares underlying those Awards upon vesting or upon
the expiration of a designated time period following the vesting of those
Awards. Each award of restricted stock units shall be evidenced by
one or more Award Agreements in the form approved by the Plan Administrator;
provided, however, that each such agreement shall comply with the terms
specified below.
B.
Vesting
Provisions
.
(i) Restricted
stock units may, in the discretion of the Plan Administrator, vest in one or
more installments over the Participant’s period of Service or upon the
attainment of specified performance objectives.
(ii) The
Plan Administrator shall also have the discretionary authority, consistent with
Code Section 162(m), to structure one or more restricted stock unit awards
so that the shares of Common Stock subject to those Awards shall vest (or vest
and become issuable) upon the achievement of pre-established performance
objectives based on one or more Performance Goals and measured over the
performance period specified by the Plan Administrator at the time of the grant
of the Award.
(iii) Outstanding
restricted stock units shall automatically terminate, and no shares of Common
Stock shall actually be issued in satisfaction of those Awards, if the
performance goals or Service requirements established for those Awards are not
attained or satisfied. The Plan Administrator, however, shall have the
discretionary authority to issue vested shares of Common Stock under one or more
outstanding Awards of restricted stock units as to which the designated
performance goals or Service requirements have not been attained or satisfied.
However, no vesting requirements tied to the attainment of performance goals may
be waived with respect to Awards which were intended, at the time those Awards
were granted, to qualify as performance-based compensation under Code
Section 162(m), except in the event of the Participant’s Involuntary
Termination with respect to Awards made prior to January 1, 2009 or as
otherwise provided in Section VIII of this Article Two.
C.
Stockholder
Rights
. The Participant shall not have any stockholder rights with
respect to the shares of Common Stock subject to a restricted stock unit award
until that award vests and the shares of Common Stock are actually issued
thereunder. However, dividend-equivalent units may be paid or credited, either
in cash or in actual or phantom shares of Common Stock, on outstanding
restricted stock unit awards, subject to such terms and conditions as the Plan
Administrator may deem appropriate.
V.
CASH AWARDS
A.
Authority
.
The Plan Administrator shall have the full power and authority, exercisable in
its sole discretion, to make cash incentive awards which are to vest in one or
more installments over the Participant’s continued Service with the Corporation
or upon the attainment of specified performance goals. Each such cash award
shall be evidenced by one or more Award Agreements in the form approved by the
Plan Administrator;
provided
however,
that each such agreement shall comply with the terms specified
below.
B.
Vesting
Provisions
.
(i) The
elements of the vesting schedule applicable to each cash award shall be
determined by the Plan Administrator and incorporated into the Award
Agreement.
(ii) The
Plan Administrator shall also have the discretionary authority, consistent with
Code Section 162(m), to structure one or more cash awards so that those
Awards shall vest upon the achievement of pre-established corporate performance
objectives based upon one or more Performance Goals and measured over the
performance period specified by the Plan Administrator at the time of grant of
the Award.
(iii) Outstanding
cash awards shall automatically terminate, and no cash payment or other
consideration shall be due the holders of those Awards, if the performance goals
or Service requirements established for the Awards are not attained or
satisfied. The Plan Administrator may, however, in its discretion waive the
termination of one or more unvested cash awards which would otherwise occur upon
the cessation of the Participant’s Service or the non-attainment of the
performance objectives applicable to those Awards. Any such waiver shall result
in the immediate vesting of the Participant’s interest in the cash award as to
which the waiver applies. Such wavier may be effected at any time, whether
before or after the Participant’s cessation of Service or the attainment or
non-attainment of the applicable performance objectives. However, no vesting
requirements tied to the attainment of performance goals may be waived with
respect to awards which were intended, at the time those awards were granted, to
qualify as performance-based compensation under Code Section 162(m), except
in the event of the Participant’s Involuntary Termination with respect to Awards
made prior to January 1, 2009 or as otherwise provided in Section VIII
of this Article Two.
C.
Payment
.
Cash awards which become due and payable following the attainment of the
applicable performance goals or satisfaction of the applicable Service
requirement (or the waiver of such goals or Service requirement) may be paid in
(i) cash, (ii) shares of Common Stock valued at Fair Market Value on
the payment date or (iii) a combination of cash and shares of Common Stock
as the Plan Administrator shall determine.
VI.
PERFORMANCE UNIT
AWARDS
A.
Authority
.
The Plan Administrator shall have full power and authority, exercisable in its
sole discretion, to grant performance unit awards in accordance with the terms
of this Section VI. Each performance unit award shall be evidenced by one
or more Award Agreements in the form approved by the Plan Administrator;
provided
however,
that each such agreement shall comply with the terms specified
below.
B.
Bonus
Pool
. A performance unit shall represent a participating interest in a
special bonus pool tied to the attainment of pre-established performance
objectives based on one or more Performance Goals. The amount of the bonus pool
may vary with the level at which the applicable performance objectives are
attained, and the value of each Performance Unit which becomes due and payable
upon the attained level of performance shall be determined by dividing the
amount of the resulting bonus pool (if any) by the total number of Performance
Units issued and outstanding at the completion of the applicable performance
period.
C.
Service
Requirement
. Performance units may also be structured to include a
Service requirement which the Participant must satisfy following the completion
of the performance period in order to vest in the performance units awarded with
respect to that performance period.
D.
Payment
.
Performance units which become due and payable following the attainment of the
applicable performance objectives and the satisfaction of any applicable Service
requirement may be paid in (i) cash, (ii) shares of Common Stock
valued at Fair Market Value on the payment date or (iii) a combination of
cash and shares of Common Stock, as determined by the Plan Administrator in its
sole discretion and set forth in the Award Agreement.
VII.
DIVIDEND EQUIVALENT
RIGHTS
A.
Authority
.
The Plan Administrator shall have the discretionary authority to grant dividend
equivalent rights in accordance with the terms of this Section VII. Each
such Award shall be evidenced by one or more Award Agreements in the form
approved by the Plan Administrator; provided however, that each such agreement
shall comply with the terms specified below.
B.
Terms
.
The dividend equivalent rights may be granted as stand-alone awards or in tandem
with other Awards made under the Plan. The term of each dividend equivalent
right award shall be established by the Plan Administrator at the time of grant,
but no such Award shall have a term in excess of ten
(10) years.
C.
Entitlement
. Each
dividend equivalent right shall represent the right to receive the economic
equivalent of each dividend or distribution, whether in cash, securities or
other property (other than shares of Common Stock), which is made per issued and
outstanding share of Common Stock during the term the dividend equivalent right
remains outstanding. A special account on the books of the
Corporation shall be maintained for each Participant to whom a dividend
equivalent right is granted, and that account shall be credited per dividend
equivalent right with each such dividend or distribution made per issued and
outstanding share of Common Stock during the term of that dividend equivalent
right remains outstanding.
D.
Timing of
Payment
. Payment of the amounts credited to such book account
may be made to the Participant either concurrently with the actual dividend or
distribution made per issued and outstanding share of Common Stock or may be
deferred for a period specified by the Plan Administrator at the time the
dividend equivalent right is initially granted or (to the extent permitted by
the Plan Administrator) designated by the Participant pursuant to a timely
deferral election made in accordance with the requirements of Code
Section 409A.
E.
Form of
Payment
. Payment of the amounts due with respect to dividend
equivalent rights may be made in (i) cash, (ii) shares of Common Stock
or (iii) a combination of cash and shares of Common Stock, as determined by
the Plan Administrator in its sole discretion and set forth in the Award
Agreement. If payment is to be made in the form of Common Stock, the
number of shares of Common Stock into which the cash dividend or distribution
amounts are to be converted for purposes of the Participant’s book account may
be based on the Fair Market Value per share of Common Stock on the date of
conversion, a prior date or an average of the Fair Market Value per share of
Common Stock over a designated period, as determined by the Plan Administrator
in its sole discretion.
VIII.
EFFECT OF CHANGE IN
CONTROL
A. In
the event of an actual Change in Control transaction, each option, stock
appreciation right and restricted stock unit award outstanding at that time
under the Plan but not otherwise fully vested shall automatically accelerate,
immediately prior to the effective date of that Change in Control, as to all the
shares of Common Stock at the time subject to such Award, unless (i) such
Award is to be assumed or substituted with an equivalent award by the
successor corporation (or parent thereof) or is otherwise to continue in full
force and effect pursuant to the terms of the Change in Control transaction or
(ii) such Award is replaced with a cash retention program of the successor
corporation that preserves the spread existing at the time of the Change in
Control on the shares of Common Stock as to which the Award is not otherwise at
that time vested and exercisable and provides for the subsequent vesting and
payout of that spread in accordance with the same exercise/vesting schedule
applicable to those shares but only if such replacement cash program does not
result in the treatment of the Award as an item of deferred compensation subject
to Code Section 409A, or (iii) the acceleration of such Award is subject to
other limitations imposed by the Plan Administrator.
B. All
outstanding repurchase rights shall automatically terminate, and the shares of
Common Stock subject to those terminated rights shall vest in full, immediately
prior to the effective date of an actual Change in Control transaction, except
to the extent (i) those repurchase rights are to be assigned to the
successor corporation (or parent thereof) or are otherwise to continue in full
force and effect pursuant to the terms of the Change in Control transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by
the Plan Administrator.
C. Immediately
following the consummation of the Change in Control, all outstanding options,
stock appreciation rights and restricted stock unit awards shall terminate and
cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in full force and effect
pursuant to the terms of the Change in Control transaction.
D. Each
Award denominated in shares of Common Stock which is assumed in connection with
a Change in Control or otherwise continued in effect shall be appropriately
adjusted, immediately after such Change in Control, to apply to the number and
class of securities into which the shares of Common Stock subject to that Award
would have been converted in consummation of such Change in Control had those
shares actually been outstanding at that time. Appropriate adjustments to
reflect such Change in Control shall also be made to (i) the exercise or
base price or cash consideration payable per share in effect under each
outstanding Award,
provided
the
aggregate exercise or base price or cash consideration in effect for such
securities shall remain the same, (ii) the maximum number and/or class of
securities available for issuance over the remaining term of the Plan,
(iii) the maximum number and/or class of securities for which any one
person may be granted Common Stock-denominated Awards under the Plan per
calendar year and (iv) the number and/or class of securities subject to the
Corporation’s outstanding repurchase rights under the Plan and the repurchase
price payable per share. To the extent the actual holders of the Corporation’s
outstanding Common Stock receive cash consideration for their Common Stock in
consummation of the Change in Control, the successor corporation may, in
connection with the assumption or continuation of the outstanding Awards under
the Plan and subject to the Plan Administrator’s approval, substitute, for the
securities underlying those assumed Awards, one or more shares of its own common
stock with a fair market value equivalent to the cash consideration paid per
share of Common Stock in such Change in Control transaction, provided such
common stock is readily traded on an established U.S. securities exchange or
market.
E. The
Plan Administrator shall have the discretionary authority to structure one or
more outstanding Awards so that those Awards shall, immediately prior to the
effective date of an actual Change in Control transaction, vest as to all the
shares of Common Stock at the time subject to those Awards, whether or not those
Awards are to be assumed in the Change in Control transaction or otherwise
continued in effect. In addition, the Plan Administrator shall have the
discretionary authority to structure one or more of the Corporation’s repurchase
rights so that those rights shall terminate immediately prior to the effective
date of an actual Change in Control transaction, and the shares subject to those
terminated rights shall thereupon vest in full.
F. The
Plan Administrator shall have full power and authority to structure one or more
outstanding Awards so that those Awards shall vest as to all the shares of
Common Stock at the time subject to those Awards in the event the Participant’s
Service is subsequently terminated by reason of an Involuntary Termination
within a designated period following the effective date of any Change in Control
transaction in which those Awards do not otherwise vest on an accelerated basis.
In addition, the Plan Administrator may structure one or more of the
Corporation’s repurchase rights so that those rights shall immediately terminate
with respect to any shares held by the Participant at the time of such
Involuntary Termination, and the shares subject to those terminated repurchase
rights shall accordingly vest in full at that time.
G. The
portion of any Incentive Option accelerated in connection with a Change in
Control shall remain exercisable as an Incentive Option only to the extent the
applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To
the extent such dollar limitation is exceeded, the accelerated portion of such
option shall be exercisable as a Non-statutory Option under the Federal tax
laws.
H. The
Plan Administrator shall have the discretionary authority to structure one or
more cash, performance unit and dividend equivalent right awards so that such
Awards shall automatically vest in whole or in part immediately prior to the
effective date of an actual Change in Control transaction or upon the subsequent
termination of the Participant’s Service by reason of an Involuntary Termination
within a designated period following the effective date of such Change in
Control.
I.
The Plan
Administrator’s authority under Paragraphs E, F and H of this Section VIII
shall also extend to any Awards intended to qualify as performance-based
compensation under Code Section 162(m), even though the automatic vesting
of those Awards pursuant to Paragraphs E, F and H of this Section VIII may
result in their loss of performance-based status under Code
Section 162(m).
ARTICLE
THREE
MISCELLANEOUS
I.
DEFERRED
COMPENSATION
A. The
Plan Administrator may, in its sole discretion, structure one or more Awards
(other than options and stock appreciation rights) so that the Participants may
be provided with an election to defer the compensation associated with those
Awards for federal income tax purposes. Any such deferral opportunity shall
comply with all applicable requirements of Code Section 409A.
B. To
the extent the Corporation maintains one or more separate non-qualified deferred
compensation arrangements which allow the participants the opportunity to make
notional investments of their deferred account balances in shares of Common
Stock, the Plan Administrator may authorize the share reserve under the Plan to
serve as the source of any shares of Common Stock that become payable under
those deferred compensation arrangements. In such event, the share reserve under
the Plan shall be reduced on a share-for-one share basis for each share of
Common Stock issued under the Plan in settlement of the deferred compensation
owed under those separate arrangements.
II.
TAX WITHHOLDING
A. The
Corporation’s obligation to deliver shares of Common Stock upon the exercise,
issuance or vesting of an Award under the Plan shall be subject to the
satisfaction of all applicable income and employment tax withholding
requirements.
B.
The Plan Administrator may, in its discretion, provide
Participants to whom Awards are made under the Plan with the right to use shares
of Common Stock in satisfaction of all or part of the Withholding Taxes to which
such holders may become subject in connection with the exercise, issuance or
vesting of those Awards or the issuance of shares of Common Stock thereunder.
Such right may be provided to any such holder in either or both of the following
formats:
(i)
Stock
Withholding
: The election to have the Corporation withhold, from the
shares of Common Stock otherwise issuable upon the issuance, exercise or vesting
of such Award or the issuance of shares of Common Stock thereunder, a portion of
those shares with an aggregate Fair Market Value equal to the percentage of the
Withholding Taxes (not to exceed one hundred percent (100%)) designated by such
individual. The shares of Common Stock so withheld shall not reduce the number
of shares of Common Stock authorized for issuance under the Plan.
(ii)
Stock
Delivery
: The election to deliver to the Corporation, at the time of the
issuance, exercise or vesting of such Award or the issuance of shares of Common
Stock thereunder, one or more shares of Common Stock previously acquired by such
individual (other than in connection with the exercise, share issuance or share
vesting triggering the Withholding Taxes) with an aggregate Fair Market Value
equal to the percentage of the Withholding Taxes (not to exceed one hundred
percent (100%)) designated by the individual. The shares of Common Stock so
delivered shall neither reduce the number of shares of Common Stock authorized
for issuance under the Plan nor be added to the number of shares of Common Stock
authorized for issuance under the Plan.
III.
SHARE
ESCROW/LEGENDS
Unvested
shares may, in the Plan Administrator’s discretion, be held in escrow by the
Corporation until the Participant’s interest in such shares vests or may be
issued directly to the Participant with restrictive legends on the certificates
evidencing those unvested shares.
IV.
EFFECTIVE DATE AND TERM OF THE
PLAN
A. The
Plan became effective on the Plan Effective Date. The Plan was amended and
restated by the Board on March 25, 2010 to increase the share reserve by an
additional Five Million (5,000,000) shares and such amendment and restatement
was approved by the stockholders at the 2010 Annual Meeting. The Plan was
subsequently amended and restated by the Board on January 31, 2011 to increase
the share reserve by Eleven Million Eight Hundred Sixty-Seven Thousand Eight
Hundred Three (11,867,803) shares and to provide for an automatic share increase
each calendar year commencing with the calendar year 2012 and ending with
calendar year 2015, subject to stockholder approval at the 2011 Annual
Meeting.
B. The
Plan shall terminate upon the
earliest
to occur of (i) September 22, 2018, (ii) the date on which all shares
available for issuance under the Plan shall have been issued as fully vested
shares or (iii) the termination of all outstanding Awards in connection
with a Change in Control. Should the Plan terminate on September 22, 2018, then
all Awards outstanding at that time shall continue to have force and effect in
accordance with the provisions of the documents evidencing those
Awards.
V.
AMENDMENT OF THE
PLAN
A. The
Board shall have complete and exclusive power and authority to amend or modify
the Plan in any or all respects, subject to stockholder approval to the extent
required under applicable law or regulation or pursuant to the listing standards
of the Stock Exchange on which the Common Stock is at the time primarily traded.
However, no such amendment or modification shall adversely affect the rights and
obligations with respect to Awards at the time outstanding under the Plan unless
the Participant consents to such amendment or modification.
B. The
Compensation Committee shall have the discretionary authority to adopt and
implement from time to time such addenda or subplans to the Plan as it may deem
necessary in order to bring the Plan into compliance with applicable laws and
regulations of any foreign jurisdictions in which Awards are to be made under
the Plan and/or to obtain favorable tax treatment in those foreign jurisdictions
for the individuals to whom the Awards are made.
C. Awards
may be made under the Plan that involve shares of Common Stock in excess of the
number of shares then available for issuance under the Plan, provided no shares
shall actually be issued pursuant to those Awards until the number of shares of
Common Stock available for issuance under the Plan is sufficiently increased by
stockholder approval of an amendment of the Plan authorizing such increase. If
such stockholder approval is not obtained within twelve (12) months after
the date the first excess Award is made, then all Awards granted on the basis of
such excess shares shall terminate and cease to be outstanding.
VI.
USE OF PROCEEDS
Any cash
proceeds received by the Corporation from the sale of shares of Common Stock
under the Plan shall be used for general corporate purposes.
VII.
REGULATORY
APPROVALS
A. The
implementation of the Plan, the granting of any Award under the Plan and the
issuance of any shares of Common Stock in connection with the issuance, exercise
or vesting of any Award under the Plan shall be subject to the Corporation’s
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the Awards made under the Plan and the shares
of Common Stock issuable pursuant to those Awards.
B. No
shares of Common Stock or other assets shall be issued or delivered under the
Plan unless and until there shall have been compliance with all applicable
requirements of applicable securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the shares of Common
Stock issuable under the Plan, and all applicable listing requirements of any
Stock Exchange on which Common Stock is then listed for trading.
VIII.
NO EMPLOYMENT/SERVICE
RIGHTS
Nothing
in the Plan shall confer upon the Participant any right to continue in Service
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Parent or Subsidiary employing or
retaining such person) or of the Participant, which rights are hereby expressly
reserved by each, to terminate such person’s Service at any time for any reason,
with or without cause.
APPENDIX
The
following definitions shall be in effect under the Plan:
A.
Award
shall mean any of the following awards authorized for issuance or grant under
the Plan: options, stock appreciation rights, stock awards, restricted stock
units, performance units, dividend equivalent rights and cash incentive
awards.
B.
Award
Agreement
shall mean the written agreement(s) between the Corporation and
the Participant evidencing a particular Award made to that individual under the
Plan, as such agreement(s) may be in effect from time to time.
C.
Board
shall mean the Corporation’s Board of Directors.
D.
Change in
Control
shall, with respect to each Award made under the Plan, be defined
in accordance with the following provisions:
(i) Change
in Control shall have the meaning assigned to such term in the Award Agreement
for the particular Award or in any other agreement incorporated by reference
into the Award Agreement for purposes of defining such term.
(ii) In
the absence of any other Change in Control definition in the Award Agreement (or
in any other agreement incorporated by reference into the Award Agreement),
Change in Control shall mean a change in ownership or control of the Corporation
effected through any of the following transactions:
a.
a merger, consolidation or other reorganization
approved by the Corporation’s stockholders,
unless
securities
representing more than fifty percent (50%) of the total combined voting power of
the voting securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Corporation’s outstanding
voting securities immediately prior to such transaction,
b.
a sale, transfer or other disposition of all or
substantially all of the Corporation’s assets, or
c.
the closing of any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a “group” within
the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation
or a person that, prior to such transaction or series of related transactions,
directly or indirectly controls, is controlled by or is under common control
with, the Corporation) becomes directly or indirectly (whether as a result of a
single acquisition or by reason of one or more acquisitions within the twelve
(12)-month period ending with the most recent acquisition) the beneficial owner
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing
(or convertible into or exercisable for securities possessing) fifty percent
(50%) or more of the total combined voting power of the Corporation’s securities
(as measured in terms of the power to vote with respect to the election of Board
members) outstanding immediately after the consummation of such transaction or
series of related transactions, whether such transaction involves a direct
issuance from the Corporation or the acquisition of outstanding securities held
by one or more of the Corporation’s existing stockholders.
d.
a change in the composition of
the Board over a period of twelve (12) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either (A)
have been Board members continuously since the beginning of such period or (B)
have been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who were
still in office at the time the Board approved such election or
nomination.
E.
Code
shall mean the Internal Revenue Code of 1986, as amended.
F.
Common
Stock
shall mean the Corporation’s Common Stock.
G.
Compensation
Committee
shall mean the Compensation Committee of the Board comprised of
two (2) or more non-employee Board members.
H.
Corporation
shall mean Senesco Technologies, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of Senesco
Technologies, Inc. which has by appropriate action assumed the
Plan.
I.
Employee
shall mean an individual who is in the employ of the Corporation (or any Parent
or Subsidiary, whether now existing or subsequently established), subject to the
control and direction of the employer entity as to both the work to be performed
and the manner and method of performance.
J.
Exercise
Date
shall mean the date on which the Corporation shall have received
written notice of the option exercise.
K.
Fair
Market Value
per share of Common Stock on any relevant date shall be the
closing selling price per share of Common Stock at the close of regular hours
trading (i.e., before after-hours trading begins) on date on question on the
Stock Exchange serving as the primary market for the Common Stock, as such price
is reported by the National Association of Securities Dealers (if primarily
traded on the Nasdaq Global or Global Select Market) or as officially quoted in
the composite tape of transactions on any other Stock Exchange on which the
Common Stock is then primarily traded. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such quotation
exists.
L.
Good
Reason
shall, with respect to each Award made under the Plan, be defined
in accordance with the following provisions:
(i) Good
Reason shall have the meaning assigned to such term in the Award Agreement for
the particular Award or in any other agreement incorporated by reference into
the Award Agreement for purposes of defining such term.
(ii) In
the absence of any other Good Reason definition in the Award Agreement (or in
any other agreement incorporated by reference into the Award Agreement), Good
Reason shall mean an individual’s voluntary resignation following (A) a
change in his or her position with the Corporation (or any Parent or Subsidiary)
which materially reduces his or her duties, responsibilities or authority,
(B) a material diminution in the duties, responsibilities or authority of
the person to whom such individual reports, (C) a material reduction in
such individual’s level of base compensation, with a reduction of more than
fifteen percent (15%) to be deemed material for such purpose, or (D) a
material relocation of such individual’s place of employment, with a relocation
of more than fifty (50) miles to be deemed material for such purpose,
provided,
however,
that a resignation for Good Reason may be effected only after
(i) the individual provides written notice to the Corporation of the event
or transaction constituting grounds for such resignation within sixty
(60) days after the occurrence of that event or transaction and
(ii) the Corporation fails to take the requisite remedial action with
respect to such event or transaction within thirty (30) days after receipt
of such notice.
M.
Incentive
Option
shall mean an option which satisfies the requirements of Code
Section 422.
N.
Involuntary
Termination
shall, with respect to each Award made under the Plan, be
defined in accordance with the following provisions:
(i) Involuntary
Termination shall have the meaning assigned to such term in the Award Agreement
for the particular Award or in any other agreement incorporated by reference
into the Award Agreement for purposes of defining such term.
(ii) In
the absence of any other Involuntary Termination definition in the Award
Agreement (or in any other agreement incorporated by reference into the Award
Agreement), Involuntary Termination shall mean such individual’s involuntary
dismissal or discharge by the Corporation (or any Parent or Subsidiary) for
reasons other than Misconduct, or such individual’s voluntary resignation for
Good Reason.
O.
Misconduct
shall, with respect to each Award made under the Plan, be defined in accordance
with the following provisions:
(i) Misconduct
shall have the meaning assigned to such term in the Award Agreement for the
particular Award or in any other agreement incorporated by reference into the
Award Agreement for purposes of defining such term.
(ii) In
the absence of any other Misconduct definition in the Award Agreement for a
particular Award (or in any other agreement incorporated by reference into the
Award Agreement), Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not in any way preclude or restrict the right of the Corporation (or any
Parent or Subsidiary) to discharge or dismiss any Participant or other person in
the Service of the Corporation (or any Parent or Subsidiary) for any other acts
or omissions, but such other acts or omissions shall not be deemed, for purposes
of the Plan, to constitute grounds for termination for Misconduct.
P.
1934
Act
shall mean the Securities Exchange Act of 1934, as
amended.
Q.
Non-Statutory
Option
shall mean an option not intended to satisfy the requirements of
Code Section 422.
R.
Parent
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
S.
Participant
shall mean any person who is granted an Award under the Plan.
T.
Performance
Goals
shall
mean any of the following performance criteria upon which the vesting of one or
more Awards under the Plan may be based: (i) pre-tax or after-tax earnings,
profit or net income, (ii) revenue or revenue growth, (iii) earnings
per share, (iv) return on assets, capital or stockholder equity,
(v) total stockholder return, (vi) gross or net profit margin,
(vii) cash flow, (viii) earnings or operating income before interest,
taxes, depreciation, amortization and/or charges for stock-based compensation,
(ix) market share, (x) increases in customer base, (xi) operating
income, net operating income or net operating income after recorded tax expense;
(xii) operating profit, net operating profit or net operating profit after
recorded tax expense, (xiii) operating margin, (xiv) cost reductions
or other expense control objectives, (xv) market price of the Common Stock,
whether measured in absolute terms or in relationship to earnings or operating
income, (xvi) budget objectives and research and development milestones,
(xvii) working capital, (xviii) mergers, acquisitions or divestitures
or (xix) measures of customer satisfaction. Each performance criteria may
be based upon the attainment of specified levels of the Corporation’s
performance under one or more of the measures described above relative to the
performance of other entities and may also be based on the performance of any of
the Corporation’s business units or divisions or any Parent or Subsidiary. Each
applicable Performance Goal may include a minimum threshold level of performance
below which no Award will be earned, levels of performance at which specified
portions of an Award will be earned and a maximum level of performance at which
an Award will be fully earned. Each applicable Performance Goal may be
structured at the time of the Award to provide for appropriate adjustment for
one or more of the following items: (A) asset impairments or write-downs;
(B) litigation judgments or claim settlements; (C) the effect of changes in
tax law, accounting principles or other such laws or provisions affecting
reported results; (D) accruals for reorganization and restructuring
programs; (E) any extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management’s
discussion and analysis of financial condition and results of operations
appearing in the Corporation’s annual report to shareholders for the applicable
year; (F) the operations of any business acquired by the Corporation or any
Parent or Subsidiary or of any joint venture in which the Corporation or any
Parent or Subsidiary participates; (G) the divestiture of one or more
business operations or the assets thereof; or (H) the costs incurred in
connection with such acquisitions or divestitures.
U.
Permanent
Disability or Permanently Disabled
shall, with respect to each Award made
under the Plan, be defined in accordance with the following
provisions:
(i) Permanent
Disability or Permanently Disabled shall have the meaning assigned to such term
in the Award Agreement for the particular Award or in any other agreement
incorporated by reference into the Award Agreement for purposes of defining such
term.
(ii) In
the absence of any other definition of Permanent Disability or Permanently
Disabled in the Award Agreement for a particular Award (or in any other
agreement incorporated by reference into the Award Agreement), Permanent
Disability or Permanently Disabled shall mean the inability of the Participant
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
V.
Plan
shall mean the Corporation’s 2008 Incentive Compensation Plan, as set forth in
this document.
W.
Plan
Administrator
shall mean the particular entity or individual, whether the
Compensation Committee (or subcommittee thereof), the Board, the Secondary Board
Committee or executive officer authorized to administer the Plan with respect to
one or more classes of eligible persons, to the extent such entity or individual
is carrying out its administrative functions under the Plan with respect to the
persons under the jurisdiction of such entity or individual.
X.
Plan
Effective Date
shall mean the date upon which the Plan shall be approved
by the Corporation’s stockholders.
Y.
Predecessor
Plan
shall mean the Corporation’s 1998 Stock Incentive Plan in effect
immediately prior to the Plan Effective Date hereunder.
Z.
Secondary
Board Committee
shall mean a committee of one or more Board members
appointed by the Board to administer the Plan with respect to eligible persons
other than Section 16 Insiders.
AA.
Section 16
Insider
shall mean an officer or director of the Corporation subject to
the short-swing profit liabilities of Section 16 of the 1934
Act.
BB.
Service
shall, with respect to each Award made under the Plan, be defined in accordance
with the following provisions:
(i) Service
shall have the meaning assigned to such term in the Award Agreement for the
particular Award or in any other agreement incorporated by reference into the
Award Agreement for purposes of defining such term.
(ii) In
the absence of any other definition of Service in the Award Agreement for a
particular Award (or in any other agreement incorporated by reference into the
Award Agreement), Service shall mean the performance of services for the
Corporation (or any Parent or Subsidiary, whether now existing or subsequently
established) by a person in the capacity of an Employee, a non-employee member
of the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option
grant or stock issuance. For purposes of this particular definition of Service,
a Participant shall be deemed to cease Service immediately upon the occurrence
of the either of the following events: (i) the Participant no longer
performs services in any of the foregoing capacities for the Corporation or any
Parent or Subsidiary or (ii) the entity for which the Participant is
performing such services ceases to remain a Parent or Subsidiary of the
Corporation, even though the Participant may subsequently continue to perform
services for that entity.
(iii) Service
shall not be deemed to cease during a period of military leave, sick leave or
other personal leave approved by the Corporation;
provided,
however,
that should such leave of absence exceed three (3) months,
then for purposes of determining the period within which an Incentive Option may
be exercised as such under the federal tax laws, the Participant’s Service shall
be deemed to cease on the first day immediately following the expiration of such
three (3)-month period, unless Participant is provided with the right to return
to Service following such leave either by statute or by written contract. Except
to the extent otherwise required by law or expressly authorized by the Plan
Administrator or by the Corporation’s written policy on leaves of absence, no
Service credit shall be given for vesting purposes for any period the
Participant is on a leave of absence.
CC.
Stock
Exchange
shall mean the American Stock Exchange, the Nasdaq Global or
Global Select Market or the New York Stock Exchange.
DD.
Subsidiary
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
EE.
10%
Stockholder
shall mean the owner of stock (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
FF.
Withholding
Taxes
shall mean the applicable federal, state and foreign income and
employment withholding taxes and other payments to which the holder of an Award
under the Plan may become subject in connection with the issuance, exercise or
vesting of that Award or the issuance of shares of Common Stock
thereunder.
ANNUAL
MEETING OF STOCKHOLDERS OF
SENESCO
TECHNOLOGIES, INC.
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
THE CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS
The
undersigned hereby constitutes and appoints Leslie J. Browne, Ph.D. and Joel
Brooks, and each of them, his or her true and lawful agent and proxy with full
power of substitution in each, to represent and to vote on behalf of the
undersigned all of the shares of Senesco Technologies, Inc. (the “Company”)
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
of the Company to be held at the New York offices of Morgan, Lewis & Bockius
LLP at 101 Park Avenue, New York, NY 10178 on March 11, 2011, at 10:00 A.M, and
at any adjournment or adjournments thereof, upon the following proposals more
fully described in the Notice of Annual Meeting of Stockholders and Proxy
Statement for the Meeting (receipt of which is hereby
acknowledged).
This
proxy when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted FOR
Proposals 1, 2 and 3.
(Continued
and to be signed on the reverse side)
ANNUAL
MEETING OF STOCKHOLDERS OF
SENESCO
TECHNOLOGIES, INC.
March
11, 2011
IMPORTANT
NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIAL
FOR THE ANNUAL MEETING:
The
Notice of Meeting, proxy statement and proxy card
are
available at www.senesco.com
Please
date, sign and mail
your
proxy card in the
envelope
provided as soon
as
possible.
|
|
Please detach along perforated line and mail in the envelope
provided.
|
|
|
PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE
OR
BLACK
INK AS SHOWN HERE
x
|
|
|
FOR AGAINST ABSTAIN
|
|
|
2.
To approve an amendment to the Company’s
|
£
£
£
|
1. Election
for Directors:
|
|
2008
Incentive Compensation Plan to
|
|
NOMINEES
:
|
increase
the shares of common stock reserved
|
¨
FOR ALL
NOMINEES
|
¨
Harlan W. Waksal,
M.D.
|
for
issuance thereunder.
|
¨
WITHHOLD
AUTHORITY
|
¨
John N.
Braca
|
|
|
FOR ALL NOMINEES
|
¨
Jack Van
Hulst
|
3.
To ratify the appointment of McGladrey & Pullen,
|
|
¨
FOR ALL
EXCEPT
|
¨
Christopher
Forbes
|
LLP
as the Company’s independent registered public
|
(see instructions below)
|
¨
Warren J.
Isabelle
|
accounting
firm for the fiscal year ending June 30, 2011.
|
|
¨
Thomas C.
Quick
|
|
|
¨
David
Rector
|
4.
In his discretion, the proxy is authorized to vote upon other matters as
may
|
|
¨
Rudolf
Stalder
|
properly
come before the Meeting.
|
|
¨
Leslie
J. Browne,
Ph.D.
|
|
|
¨
John E. Thompson,
Ph.D.
|
The
undersigned acknowledges receipt from the Company before the execution
of
|
|
|
this
proxy of the Notice of Annual Meeting of Shareholders, a
Proxy
|
INSTRUCTION:
To
withhold authority to vote for any
|
Statement
for the Annual Meeting of Shareholders and the 2010 Annual Report
to
|
individual nominee(s),
mark “
FOR
ALL
EXCEPT”
|
Shareholders.
|
and
fill in the box next to each nominee you wish to
|
|
withhold, as shown
here:
x
|
|
|
|
|
|
MARK “
x
”
HERE IF YOU PLAN TO ATTEND THE MEETING
¨
|
|
|
|
|
|
To
change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
|
¨
|
|
Signature
of Shareholder
|
|
Date:
|
|
Signature
of Shareholder
|
|
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
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