"Employment Agreement of New Chief Executive Officer
The Company entered into an employment agreement (the "Employment Agreement") with Mr. Lewis on September 10, 2012. Under the terms of the Employment Agreement, Mr. Lewis will receive an annual base salary of $425,000, which may be increased from time to time in the discretion of the Board. The Employment Agreement also provides that Mr. Lewis will be eligible to participate in the Company's annual bonus program for executives and will have a target annual bonus opportunity equal to 50% of his base salary.
In connection with the commencement of his employment, the Company granted to Mr. Lewis a stock option (the "Initial Option") to purchase 708,314 shares of the Company's common stock at $3.40 per share. This option will vest over four years, based on Mr. Lewis' continued service to the Company. In addition, if the Company conducts an equity financing transaction before May 1, 2013, the Company agreed in the Employment Agreement to grant another stock option to Mr. Lewis (the "Top-Up Option") to purchase such number of shares of the Company's common stock that, when combined with the shares underlying the Initial Option, equals 2.6% of the number of fully diluted shares of common stock of the Company determined as of the grant date of the Top-Up Option. If granted, the Top-Up Option would have an exercise price equal to the fair market value of the Company's common stock on its grant date and would vest over four years, based on Mr. Lewis' continued service to the Company."
I do recall the bizarre suggestion that Lewis had been gifted a major share of the Company as part of his employment deal. It was obviously a misinterpretation on the part of the individual who made that assertion, but out of curiosity I took the trouble at the time to investigate. I assumed that the information which had been misinterpreted was something along the lines of the following extract from one of the SEC filings -
"This Option shall be exercisable with respect to twenty-five percent (25%) of the shares of Common Stock subject to this Option on the first anniversary of the Date of Grant and with respect to an additional twelve and a half percent (12.5%) of the shares of Common Stock subject to this Option on the sixth month anniversary of the First Anniversary Date and each sixth month anniversary date thereafter through the fourth anniversary of the Date of Grant."
I made the point only recently that there will always be a small number of shareholders who react to the disappointment of the performance of their individual investments failing to meet their unrealistic expectations by looking to shift the blame from themselves to the BOD and management team - and that once committed to their comforting alternate reality they will seek to support it with skewed interpretations of subsequent events. On that note, I thought the following observation today from bugsey was quite revealing -
"I remember sometime ago that Puddin (FUD) opined that the BOD has no Fiduciary responsibility to shareholders."
Doubtless this is his translation of my opinion that the BOD has no responsibility to deliver share price appreciation in the near term - and that we pay them to manage the business rather than the stock market, generating long term shareholder value by guiding the business to profitability.
Clearly that truth threatens the Bubble World reality bugsey has created in which he is not to blame for his unrealistic expectations.
The following from kennethtdc on Friday was motivated by the same scenario - unrealistic expectations of near-term share price performance -
"It's good to see that you, Fud, finally admit in your post from 1-18-13 @ 12:12 pm that this company has been a poor investment decision."
These people are in complete denial of the fact that other investors take a more long-term view when it comes to a development-stage biotech.
I wonder how many of them will forever be in denial of the reality check Sharoky gave us in the December 2010 conference call after the Transave merger was announced -
"Now we all know that clinical trials go where they go ....."
p.s. To spare this forum from the otherwise-inevitable response - my targets for my investment in INSM are my business. If my expectations proved to have been unrealistic I wouldn't be selfish enough to bore others here with my shortcomings as an investor.