MOLECULIN BIOTECH, INC. (NASDAQ:MBRX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 11, 2019, the Compensation Committee of the Board of Directors of Moleculin Biotech, Inc. (“Company”) completed its annual review of executive compensation for the 2018/2019 compensation year (June 1, 2018 to May 31, 2019). After researching comparable companies and using a leading industry survey, the Compensation Committee approved the following compensation arrangements with its named executive officers for the 2019/2020 compensation year (June 1, 2019 to May 31, 2020):
As part of his overall compensation package for the 2018/2019 compensation year, the Compensation Committee approved long-term incentive compensation for Mr. Klemp consisting of stock options to purchase 603,000 shares of common stock vesting over a four-year period. The Compensation Committee subsequently determined that the stock option grant exceeded the 500,000 share limit on the number of stock options that may be granted to any individual participant in a fiscal-year period under the Moleculin Biotech, Inc. 2015 Stock Plan (the “Plan”). Mr. Klemp had not exercised any of the stock options in question. Mr. Klemp and the Compensation Committee agreed the 103,000 options in excess of the limitation will be forfeited, and agreed to revise the vesting schedule for the previously issued option to provide that 150,750 options vested as of June 6, 2019, and the remaining options shall vest in three equal installments on June 6, 2020, 2021, and 2022. In order to retain the economic value of the long-term incentive compensation to Mr. Klemp, on July 11, 2019, the Compensation Committee granted Mr. Klemp 73,005 restricted stock units vesting in four equal annual installments, commencing July 11, 2020. The number of restricted stock units issued to Mr. Klemp was based on the compensation expense associated with the forfeited options and what the compensation
expense of the restricted stock units would have been if issued at the time of the option grant. In this way, the aggregate value of the replacement award is expected to approximate, as closely as practicable, the value of the unfulfilled stock option awards and the original intention of the Compensation Committee. The vesting schedule of the restricted stock units is less favorable to Mr. Klemp, as vesting does not commence until July 2020. The Company determined that the financial impact of the unfulfilled awards will be treated prospectively on future vesting as the forfeiture occurs. In addition, the Company expects to recognize expense over the vesting period of the replacement award.
On July 11, 2019, the Compensation Committee agreed to modify the Company’s policy for compensating non-employee members of the Board by amending the annual option grant that is issued on the date of the annual meeting to each non-employee director that is re-elected at the annual meeting to provide for a 10-year option to purchase 50,000 shares of the Company’s common stock, with quarterly vesting and an exercise price equal the closing price of the Company’s common stock on the date of the annual meeting. On July 11, 2019, each current non-employee member of the Board was issued a one-time 10-year option grant to purchase 35,000 shares of the Company’s common stock, with quarterly vesting and an exercise price equal to the closing price on the date of issuance, or $1.31 per share.
About MOLECULIN BIOTECH, INC. (NASDAQ:MBRX)
Moleculin Biotech, Inc. is a preclinical and clinical-stage pharmaceutical company. The Company is focused on the development of anti-cancer drug candidates. Its lead drug candidate is liposomal Annamycin, which it refers to as Annamycin, an anthracycline intended for the treatment of relapsed or refractory acute myeloid leukemia (AML). Annamycin is a Phase II clinical-stage anthracycline and liposome formulated anthracycline that has been designed to eliminate cardiotoxicity and avoid the multidrug resistance mechanisms. It has over two other drug development projects in progress, one involving a portfolio of small molecules, which it refers to as the WP1066 Portfolio, focused on the modulation of key oncogenic transcription factors involved in the progression of cancer, and the WP1122 Portfolio, a suite of molecules targeting the metabolic processes involved in cancer in general, and glioblastoma. As of September 30, 2016, it had not generated any revenue from its operations.
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