AFFY's DEF 14 Excites Longs - Executives and BOD Compensation for 2012/2013 Needs Advisory Approval
Longs are relieved that there will be a shareholder's meeting on June 6, 2013. They figure that there is no Bankruptcy before then and they are probably right. It is ironic to me that the shareholder meeting date, June 6, 2013, is the date I picked for Affymax's Chapter 11 filing. I guess that will come later.
What does the DEF 14 mean? Well, it means shareholders, on an advisory basis, can vote for or against the officers' and directors' compensation packages for 2012 and 2013. All of the officers were compensated pretty well for 2012 and the good news for them is that the 2013 compensation packages, which granted material increases in compensation to everybody, were concluded in January 2013 before the recall. In addition to regular compensation, the officers further enjoy golden parachutes case of a change of control or winding down of operations or termination without cause. Also disclosed are the fat indemnification agreements for everybody that go beyond the indemnifications already provided by the bylaws. The only downfall in compensation appears to be the stock options, but longs are already familiar with stock losses. Bottom line: Officers and directors continue to be well compensated on whatever cash is still left at Affymax, even should things become even more dire.
Also, Affymax disclosed 2 class actions and 2 shareholder derivative actions to be pending. Insofar as financial resources to defend the litigation: "Our management believes that we have meritorious defenses and intends to defend these lawsuits vigorously. However, these lawsuits are subject to inherent uncertainties, the actual cost may be significant, and we may not prevail. We believe we are entitled to coverage under our relevant insurance policies, subject to a retention, but coverage could be denied or prove to be insufficient."
I am looking forward to reading the bullish spin on the DEF-14. Enjoy your shareholders meeting.
Thanks GWP. Sounds like they are stacking the deck in their favor as the ship most likely goes down. Sometimes the silver lining is not there. I have found myself asking 'how low' would be a good price to consider jumping in --- but I fail to see anything besides signs of absolute collapse.
TGC I, too, think this may not be the end of peginastide. That being said, I find it difficult to envision a scenario where Affymax shareholder could benefit from its rehabilitation. I believe that if O is ever to come back, it will take an expensive new study over several years to make it happen. By then the negatives will have most likely been forgotten and Takeda, armed with a new study or reformulation or whatever, will be in the catbird seat. Whoever gets the Affymax/Takeda licensing deal may also prosper, but Takeda may end up owning it all to the dismay of Affymax shareholders.