PRESSURE
BIOSCIENCES, INC.
NOTICE
OF SPECIAL MEETING
IN
LIEU OF THE ANNUAL MEETING OF STOCKHOLDERS
To
be Held on September 12, 2008
NOTICE
is
hereby given that a Special Meeting in Lieu of the Annual Meeting of
Stockholders (the “Meeting”) of Pressure BioSciences, Inc. (“PBI” or the
“Company”) will be held on September 12, 2008, at 4:00 p.m. at the Company’s
principal executive offices located at 14 Norfolk Avenue, South Easton, MA
02375, for the following purposes, as more fully described in the proxy
statement accompanying this notice:
| 1. |
To
elect one Class III Director to hold office until the 2011 Annual
Meeting
of Stockholders and until his successor is duly elected and
qualified.
|
| 2. |
To
consider and vote upon a proposal to amend the Company’s 2005 Equity
Incentive Plan to increase the number of shares of common stock
available
for issuance under the plan from 1,000,000 to 1,500,000.
|
| 3. |
To
consider and vote upon a proposal to authorize the Company to issue,
in
connection with one or more capital raising transactions to finance
the
Company, up to 4,500,000 shares of common stock (including pursuant
to
preferred stock, options, warrants, convertible debt or other securities
exercisable for or convertible into common stock), upon such terms
as the
Board of Directors shall deem to be in the best interests of the
Company,
for an aggregate consideration of not more than $18,000,000 and
at an
effective price not less than 80% of the market price of PBI’s common
stock at the time of issuance, such issuance or issuances to occur,
if at
all, in the three month period commencing with the date of the
approval of
this proposal by the stockholders of the
Company.
|
| 4. |
To
consider and vote upon any matters incidental to the foregoing
purposes
and any other matters which may properly come before the Meeting
or any
adjourned session thereof.
|
The
Board
of Directors has fixed the close of business on July 28, 2008 as the record
date
for determining the stockholders entitled to notice of, and to vote at, the
Meeting.
By
Order
of the Board of Directors:
Richard
T. Schumacher
Clerk
South
Easton, Massachusetts
August
11, 2008
YOUR
VOTE IS IMPORTANT
You
are urged to sign, date, and promptly return the accompanying form of proxy,
so
that, if you are unable to attend the Meeting, your shares can still be voted.
However, your proxy may be revoked at any time prior to exercise by filing
with
the Clerk of the Company a written revocation, by executing a proxy with
a later
date, or by attending and voting in person at the Meeting.
PRESSURE
BIOSCIENCES, INC.
PROXY
STATEMENT
FOR
THE SPECIAL MEETING IN LIEU OF
THE
ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON SEPTEMBER 12, 2008
General
This
proxy statement is being furnished in connection with the solicitation of
proxies by the Board of Directors of Pressure BioSciences, Inc., a Massachusetts
corporation, with its principal executive offices located at 14 Norfolk Avenue,
South Easton, MA 02375, for use at the Special Meeting in Lieu of the Annual
Meeting of Stockholders to be held on September 12, 2008 at 4:00 PM and at
any
adjournments or postponements thereof (the “Meeting”) for the purposes set forth
herein and in the accompanying Notice of Special Meeting in Lieu of Annual
Meeting of Stockholders. In this proxy statement we refer to Pressure
BioSciences, Inc. as “PBI,” “the Company,” “we,” or “us.”
The
enclosed proxy relating to the Meeting is solicited on behalf of the Company’s
Board of Directors (the “Board of Directors”) and the cost of such solicitation
will be borne by the Company. Certain of the Company’s officers and regular
employees may solicit proxies by correspondence, telephone, or in person,
without extra compensation. We will also pay to banks, brokers, nominees,
and
certain other fiduciaries their reasonable expenses incurred in forwarding
proxy
material to the beneficial owners of securities held by them. It
is
expected that this proxy statement, the accompanying notice of Meeting, proxy
card, and annual report to stockholders will be mailed to stockholders on
or
about August 11, 2008.
Record
Date, Quorum, Required Votes and Method of Tabulation
Only
stockholders of record at the close of business on July 28, 2008 will be
entitled to receive notice of, and to vote at, the Meeting. As of June 30,
2008,
there were issued and outstanding 2,195,283 shares of common stock, $.01
par
value, of the Company (the “Common Stock”), all of which are entitled to vote.
Each such stockholder is entitled to one vote for each share of Common Stock
so
held and may vote such shares either in person or by proxy.
A
quorum,
consisting of the holders of a majority of the shares of Common Stock issued,
outstanding, and entitled to vote at the Meeting, will be required to be
present
in person or by proxy for the transaction of business at the Meeting.
The
affirmative vote of the holders of a plurality of the votes cast by stockholders
present in person or represented by proxy at the Meeting and entitled to
vote
thereon is required to elect the nominee as a Class III Director of the Company.
The affirmative vote of a majority of the shares of Common Stock present
in
person or represented by proxy and entitled to vote at the Meeting is required
to approve Proposal No. 2 relating to the amendment to the Company’s 2005
Equity Incentive Plan and Proposal No. 3 relating to the authorization for
the
Company to issue up to 4,500,000 shares of Common Stock in one or more capital
raising transactions, each as described more fully in this proxy statement.
The
votes
of stockholders present in person or represented by proxy at the Meeting
will be
tabulated by an inspector of elections appointed by the Company. The inspector
of elections will treat abstentions as shares of Common Stock that are present
and entitled to vote for purposes of determining a quorum. Abstentions will
have
no effect on the outcome of the vote for the election of the Class III Director,
but will have the effect of being cast against the proposal to amend the
Company’s 2005 Equity Incentive Plan and the proposal to authorize the Company
to issue up to 4,500,000 shares of Common Stock in one or more capital raising
transactions, even though the stockholder so abstaining may intend a different
interpretation. Shares of Common Stock held of record by brokers who do not
return a signed and dated proxy will not be considered present at the Meeting,
will not be counted towards a quorum, and will not be voted on any of the
proposals. Shares of Common Stock held of record by brokers who return a
dated
and signed proxy but who fail to vote on any of the proposals will count
toward
the quorum, but will have no effect on any proposal not voted.
The
enclosed proxy, if executed and returned, will be voted as directed on the
proxy
or, in the absence of such direction, the shares will be voted FOR the election
of the nominee as a Class III Director as described herein under “Proposal No. 1
- Election of Directors,” FOR approval of the amendment to the Company’s 2005
Equity Incentive Plan to increase the number of shares of Common Stock available
for issuance under the plan from 1,000,000 to 1,500,000 as described herein
under “Proposal No. 2 - Amendment to the Pressure BioSciences, Inc. 2005 Equity
Incentive Plan,” and FOR approval of the authorization for the Company to issue,
in connection with one or more capital raising transactions to finance the
Company, up to 4,500,000 shares of Common Stock (including pursuant to preferred
stock, options, warrants, convertible debt or other securities exercisable
for
or convertible into common stock), upon such terms as the Board of Directors
shall deem to be in the best interests of the Company, for an aggregate
consideration of not more than $18,000,000 and at an effective price not
less
than 80% of the market price of the Company’s Common Stock at the time of
issuance, such issuance or issuances to occur, if at all, in the three month
period commencing with the date of the approval of this proposal by the
stockholders of the Company as described herein under “Proposal No. 3 -
Authorization of Capital Raising Transactions”. If any other matters shall
properly come before the Meeting, the authorized proxy will be voted by the
proxies in accordance with their best judgment.
Any
stockholder signing and delivering a proxy may revoke it at any time prior
to
exercise by filing with the Clerk of the Company a written notice of revocation
bearing a later date than the proxy, by executing a proxy with a later date,
or
by attending and voting in person at the Meeting. Record holders should send
any
written notice of revocation or subsequent dated proxy to the Company’s Clerk at
14 Norfolk Avenue, South Easton, MA 02375, or hand deliver the notice of
revocation or subsequent dated proxy to the Company’s Clerk before the vote at
the Meeting.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
At
the
Meeting, one Class III Director is to be elected to serve until the 2011
Annual
Meeting of Stockholders and until a successor has been duly elected and
qualified. The Board of Directors, upon the recommendation of the Nominating
Committee, has nominated Richard T. Schumacher for election as a Class III
Director. Mr. Schumacher is currently a director of the Company and has not
been
nominated pursuant to any arrangement or understanding with any person.
The
Company’s Restated Articles of Organization, as amended (the “Articles”), and
Amended and Restated Bylaws, as amended (the “Bylaws”), provide that the Board
of Directors shall be divided into three classes. At each Annual Meeting
of
Stockholders, the directors elected to succeed those whose terms expire are
identified as being in the same class as the directors they succeed and are
elected to hold office for a term to expire at the third Annual Meeting of
Stockholders after their election, and until their respective successors
are
duly elected and qualified, unless an adjustment in the term to which an
individual director shall be elected is made because of a change in the number
of directors.
The
Articles and Bylaws do not require the stockholders to elect any directors
in a
class the term of office of which extends beyond the Meeting. The term of
office
of Mr. Schumacher, the Company’s Class III Director, expires at the Meeting. The
terms of office of the Class I Directors and Class II Directors, comprised
of R.
Wayne Fritzsche, Dr. Calvin A. Saravis, J. Donald Payne and P. Thomas Vogel,
continue after the Meeting.
At
the
Meeting, it is the intention of the persons named as proxies to vote for
the
election of Mr. Schumacher as a Class III Director. In the unanticipated
event
that Mr. Schumacher should be unable to serve, the persons named as proxies
will
vote the proxy for such substitute, if any, as the present Board of Directors
may designate or the present Board of Directors may reduce the number of
directors.
Vote
Required to Elect the Nominee as Director
The
affirmative vote of the holders of a plurality of the votes cast by stockholders
present in person or represented by proxy at the Meeting and entitled to
vote
thereon is required for the election of Richard T. Schumacher as a Class
III
Director of the Company.
The
Board of Directors recommends that stockholders vote FOR the election of
Richard
T. Schumacher as a Class III Director of the Company.
Information
on Nominee and Other Directors
The
following table sets forth certain information as of the date of this proxy
statement about the nominee and each of the directors whose term extends
beyond
the Meeting, including the year in which the nominee’s term would expire, if
elected.
|
Name
|
|
Age
|
|
Position
|
|
Director
Since
|
|
Year
Term Expires,
if
Elected, and Class
|
|
|
R.
Wayne Fritzsche (1)
|
|
59
|
|
Chairman
of the Board
|
|
2003
|
|
2009
Class
I
|
|
|
Calvin
A. Saravis, Ph.D. (2)
|
|
78
|
|
Director
|
|
1986
|
|
2009
Class
I
|
|
|
J.
Donald Payne(1)
|
|
52
|
|
Director
|
|
2003
|
|
2010
Class
II
|
|
|
P.
Thomas Vogel(1)
|
|
68
|
|
Director
|
|
2004
|
|
2010
Class
II
|
|
|
Richard
T. Schumacher*
|
|
57
|
|
Director,
President, Chief Executive Officer, Treasurer, and Clerk
|
|
1978
|
|
2008
Class
III
|
|
*Nominee
for Class III Director.
(1)
Member of the Audit Committee, Compensation Committee, and Nominating
Committee
(2)
Member of the Compensation Committee, Nominating Committee, and Chairman
of the
Scientific Advisory Board
Mr.
R. Wayne Fritzsche
has
served as a director and Chairman of the Board of Directors of the Company
since
October 2, 2003. Mr. Fritzsche has served as a member of the Company’s
Scientific Advisory Board since 1999. Mr. Fritzsche is the founder of Fritzsche
& Associates, Inc., a consulting firm which provides strategic, financial,
and scientific consulting to medical companies in the life sciences and
healthcare industries, and has served as its President since 1991. Since
2003,
Mr. Fritzsche has also served as interim President of Chemokine Pharmaceutical
Company, Inc. (formerly PGBP Pharmaceuticals), a small molecule discovery
company. Since 2001, Mr. Fritzsche has served as a board member of Opexa
Pharmaceuticals, a multiple sclerosis and cell immunology therapy company,
and
Vascular Sciences, Inc., an extracorporeal, macular degeneration company.
He
also previously served as a board member of Intelligent Medical Imaging,
an
automated microscopic imaging company, from 1994 to 1997, Clarion
Pharmaceuticals, a drug development company, from 1994 to 1996, Nobex
Pharmaceuticals, a drug delivery firm, from 1996 to 2001, Cardio Command,
Inc.,
a transesophageal cardiac monitoring and pacing firm, from 1999 to 2001,
and
Hesed BioMed, an antisense oligonucleotide and catalytic antibody company,
from
2000 to 2002. Mr. Fritzsche holds a BA from Rowan University, and an MBA
from
the University of San Diego.
Dr.
Calvin A. Saravis
has
served as a director of the Company since 1986. Dr. Saravis has also served
as
Chairman of the Company’s Scientific Advisory Board since 2003. From 1984 to
1998 he was an Associate Professor of Surgery (Biochemistry) at Harvard Medical
School (presently emeritus) and from 1983 to 1999; he was an Associate Research
Professor of Pathology at Boston University School of Medicine (presently
emeritus). From 1971 to 1997, Dr. Saravis was a Senior Research Associate
at the
Mallory Institute of Pathology and from 1979 to 1997 he was a Senior Research
Associate at the Cancer Research Institute-New England Deaconess Hospital.
Dr.
Saravis received his Ph.D. in immunology and serology from Rutgers
University.
Mr.
J. Donald Payne
has
served as a director of the Company since December 30, 2003. Mr. Payne has
served as President and a Director of Nanospectra Biosciences, Inc., a
privately-held medical device company developing products for cancer since
2001.
Prior to that, Mr. Payne held various executive positions in finance and
administration of public and private life science companies since 1992, served
as a financial executive in the energy industry from 1980 through 1990, and
was
in public accounting from 1976 to 1980. Mr. Payne received an MBA from Rice
University in 1992 and a BBA from Texas A&M University in 1976. He is a
Certified Public Accountant in Texas, and a member of the AICPA and Financial
Executives Institute.
Mr.
P. Thomas Vogel
has
served as a director of the Company since January 9, 2004. Since 2006 Mr.
Vogel
has served as the President of Vogel Associates, a consulting company, and
a
Principal of Franchise Finders, LLC, a franchise consulting company. From
April
2002 until December 2005, Mr. Vogel served as the President and Chief Executive
Officer of AdipoGenix, Inc, an early-stage drug discovery company focused
on
obesity and metabolic diseases. From 2000 to 2002, Mr. Vogel served as President
and Chief Executive Officer of Arradial, Inc., an early stage biopharmaceutical
company. From 1996 to 2000, Mr. Vogel was Chief Executive Officer and Director
of Mosaic Technologies, Inc., an early-stage molecular biology company. From
1992 to 1995, Mr. Vogel was President of Fisher Scientific Company, a $1
billion
laboratory supply distribution business. Mr. Vogel served as President of
PB
Diagnostics from 1991 to 1992, as President of Instrumentation Laboratory
from
1990 to 1991, and as President of Serono Diagnostics from 1988 to 1990. Mr.
Vogel was in the venture capital arena from 1982 to 1987. Prior to that,
from
1974 to 1982, Mr. Vogel worked in the Diagnostics Division of Abbott
Laboratories, Inc., where he served as Divisional Vice President and General
Manager of Diagnostic Products. Mr. Vogel graduated from the Georgia Institute
of Technology with a Bachelor's Degree in Electrical Engineering and from
The
Wharton Business School with a Master's Degree in Business
Administration.
Mr.
Richard T. Schumacher,
the
founder of the Company, has served as a director of the Company since 1978.
He
has served as the Company’s Chief Executive Officer since April 16, 2004 and
President since September 14, 2004. He previously served as Chief Executive
Officer and Chairman of the Board of the Company from 1992 to February 2003.
From July 9, 2003 until April 14, 2004 he served as a consultant to the Company
pursuant to a consulting agreement. He served as President of the Company
from
1986 to August 1999. Mr. Schumacher served as the Director of Infectious
Disease
Services for Clinical Sciences Laboratory, a New England-based medical reference
laboratory, from 1986 to 1988. From 1972 to 1985, Mr. Schumacher was employed
by
the Center for Blood Research, a nonprofit medical research institute associated
with Harvard Medical School. Mr. Schumacher received a B.S. in Zoology from
the
University of New Hampshire.
Corporate
Governance
Board
of Directors and Committee Meetings; Annual Meeting Attendance.
The
Board of Directors held eighteen (18) meetings during the year ended December
31, 2007. Each director attended at least 75% of all meetings of the Board
of
Directors and each committee of the Board of Directors on which they served.
All
of the Company’s directors are encouraged to attend the Company’s annual
meetings of Stockholders. All five (5) of the Company’s directors were in
attendance at the Company’s 2007 Special Meeting in Lieu of the Annual Meeting
of Stockholders.
Board
Independence.
The
Board of Directors has reviewed the qualifications of each of Messrs. Fritzsche,
Payne, Vogel and Dr. Saravis, constituting more than a majority of the Company’s
directors, and has affirmatively determined that each individual is
“independent” as such term is defined under the current listing standards of the
NASDAQ Stock Market. The Board of Directors has determined that none of these
directors has a material relationship with the Company that would interfere
with
the exercise of independent judgment. In addition, each member of the Audit
Committee is independent as required under Section 10A(m)(3) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
Stockholder
Communications.
Any
stockholder wishing to communicate with any of the Company’s directors regarding
the Company may write to the director, c/o Clerk, Pressure BioSciences, Inc.,
14
Norfolk Avenue, South Easton, MA 02375. The Clerk will forward these
communications directly to the director(s).
Code
of Ethics.
Pursuant to Section 406 of the Sarbanes-Oxley Act of 2002, the Company has
adopted a Code of Ethics for Senior Financial Officers that applies to the
Company’s principal executive officer, principal financial officer, principal
accounting officer, controller, and other persons performing similar functions.
A copy of the code of ethics is posted on, and may be obtained free of charge
from the Company’s website at www.pressurebiosciences.com. If the Company makes
any amendments to this Code of Ethics or grants any waiver, including any
implicit waiver, from a provision of this Code of Ethics to the Company’s
principal executive officer, principal financial officer, principal accounting
officer, controller, or other persons performing similar functions, the Company
will disclose the nature of such amendment or waiver, the name of the person
to
whom the waiver was granted and the date of waiver in a Current Report on
Form
8-K.
Board
Committees
Standing
committees of the Board of Directors include an Audit Committee, a Compensation
Committee, and a Nominating Committee.
Audit
Committee.
Messrs.
Fritzsche, Payne, and Vogel are currently the members of the Audit Committee.
The Board of Directors has determined that Mr. Payne qualifies as an “audit
committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.
The
Audit
Committee operates pursuant to a written charter (the “Audit Committee
Charter”), a current copy of which is publicly available on the investor
relations portion of the Company’s website at www.pressurebiosciences.com.
Under
the provisions of the Audit Committee Charter, the primary functions of the
Audit Committee are to assist the Board of Directors with the oversight of
(i)
the Company’s financial reporting process, accounting functions, and internal
controls, and (ii) the qualifications, independence, appointment, retention,
compensation, and performance of the Company’s independent public accounting
firm. The Audit Committee is also responsible for the establishment of
“whistle-blowing” procedures, and the oversight of other compliance matters. The
Audit Committee held five (5) meetings during fiscal 2007. See “Audit Committee
Report” below.
Compensation
Committee.
General
Messrs.
Fritzsche, Payne, and Vogel and Dr. Saravis are currently the members of
the
Compensation Committee. The Compensation Committee operates pursuant to a
written charter, a current copy of which is publicly available on the investor
relations portion of the Company’s website at www.pressurebiosciences.com. The
primary functions of the Compensation Committee include (i) reviewing and
approving our executive compensation, (ii) reviewing the recommendations
of the
President and Chief Executive Officer regarding the compensation of our
executive officers, (iii) evaluating the performance of the Chief Executive
Officer, (iv) overseeing the administration and approval of grants of stock
options and other equity awards under our equity incentive plans, and (v)
recommending compensation for our Board of Directors and each committee thereof
for review and approval by the Board of Directors. The Compensation Committee
held one (1) meeting during fiscal 2007.
Compensation
Objectives
In
light
of the early stage of commercialization of our products, we recognize the
importance of attracting and retaining key employees with sufficient experience,
skills, and qualifications in areas vital to our success, such as operations,
finance, sales and marketing, research and development and engineering, and
individuals who are committed to our short- and long-term goals. The
Compensation Committee has designed our executive compensation programs with
the
intent of attracting, motivating, and retaining experienced executives and
rewarding them for their contributions by offering them a competitive base
salary, annual cash incentive bonuses, and long-term equity-based incentives,
typically in the form of stock options. The Compensation Committee strives
to
balance the need to retain key employees with financial prudence given our
history of operating losses and the early stage of our commercialization.
Executive
Officers and Director Compensation Process
The
Compensation Committee considers and determines executive compensation according
to an annual and semi-annual objective setting and measurement cycle.
Specifically, corporate goals for the year are initially developed by our
executive officers and are then presented to the Board of Directors and
Compensation Committee for review and approval. Individual goals are intended
to
focus on contributions that facilitate the achievement of the corporate goals.
Individual goals are first proposed by each executive officer, other than
the
President and Chief Executive Officer, then discussed by the entire senior
executive management team and ultimately compiled and prepared for submission
to
the Board of Directors and the Compensation Committee, by the President and
Chief Executive Officer. The Compensation Committee sets and approves the
goals
for the President and Chief Executive Officer. Generally, corporate and
individual goals are set during the first quarter of each calendar year.
The
objective setting process is coordinated with our annual financial planning
and
budgeting process so our Board of Directors and Compensation Committee can
consider overall corporate and individual objectives in the context of budget
constraints and cost control considerations. Annual salary increases, bonuses,
and equity awards, such as stock option grants, if any, are tied to the
achievement of these corporate and individual performance goals as well as
our
financial position and prospects.
Under
the
annual performance review program, the Compensation Committee evaluates
individual performance against the goals for the recently completed year.
The
Compensation Committee’s evaluation generally occurs in the first quarter of the
following year. The evaluation of each executive (other than the President
and
Chief Executive Officer) begins with a written self-assessment submitted
by the
executive to the President and Chief Executive Officer. The President and
Chief
Executive Officer then prepares a written evaluation based on the executive’s
self-assessment, the President and Chief Executive Officer’s evaluation, and
input from others within the Company. This process leads to a recommendation
by
the President and Chief Executive Officer for a salary increase, bonus, and
equity award, if any, which is then considered by the Compensation Committee.
In
the case of the President and Chief Executive Officer, the Compensation
Committee conducts his performance evaluation and determines his compensation,
including salary increase, bonus, and equity awards, if any. We generally
expect, but are not required, to implement salary increases, bonuses, and
equity
awards, for all executive officers, if and to the extent granted, by April
1st
of each
year.
Non-employee
director compensation is set by our Board of Directors upon the recommendation
of the Compensation Committee. In developing its recommendations, the
Compensation Committee is guided by the following goals: compensation should
be
fair relative to the required services for directors of comparable companies
in
our industry and at our company’s stage of development; compensation should
align directors’ interests with the long-term interest of stockholders; the
structure of the compensation should be simple, transparent, and easy for
stockholders to understand; and compensation should be consistent with the
financial resources, prospects, and competitive outlook for the
Company.
In
evaluating executive officer and director compensation, the Compensation
Committee considers the practices of companies of similar size, geographic
location, and market focus. In order to develop reasonable benchmark data
the
Compensation Committee has referred to publicly available sources such as
Salary.com and the BioWorld Survey. While the Compensation Committee does
not
believe benchmarking is appropriate as a stand-alone tool for setting
compensation due to the unique aspects of our business objectives and current
stage of development, the Compensation Committee generally believes that
gathering this compensation information is an important part of its
compensation-related decision making process.
The
Compensation Committee has the authority to hire and fire advisors and
compensation consultants as needed and approve their fees. No advisors or
compensation consultants were hired or fired in fiscal 2007.
The
Compensation Committee is also authorized to delegate any of its
responsibilities to subcommittees or individuals as it deems appropriate.
The
Compensation Committee did not delegate any of its responsibilities in fiscal
2007.
In
February 2008, our Board of Directors met with senior management and discussed
the 2007 business and financial results and reviewed the proposed objectives
for
2008. The Board of Directors and the Compensation Committee also reviewed
the
proposed 2008 budget and operating plan and determined that discussions of
salaries, bonuses and equity awards should be deferred until the second half
of
2008. Considering this, the Compensation Committee recommended, and the Board
of
Directors approved the following actions to be taken:
| |
·
|
Implement
a 4% cost of living increase for all employees hired prior to December
31,
2007, except for Mr. Schumacher, and for our regional sales directors,
effective immediately.
|
| |
·
|
Grant
each non-employee member of the Board of Directors non-qualified
stock
options to purchase 10,000 shares of our common stock, effective
on April
15, 2008.
|
Nominating
Committee.
Messrs.
Fritzsche, Payne, Vogel and Dr. Saravis are currently the members of the
Company’s Nominating Committee. The Nominating Committee operates pursuant to a
written charter, a current copy of which is publicly available on the investor
relations portion of the Company’s website at www.pressurebiosciences.com. The
Nominating Committee held one (1) meeting during fiscal year 2007.
The
primary functions of the Nominating Committee are to (i) identify, review,
and evaluate candidates to serve as directors of the Company, (ii) make
recommendations of candidates to the Board of Directors for all directorships
to
be filled by the stockholders or the Board of Directors and (iii) serve as
a
focal point for communication between such candidates, the Board of Directors,
and management.
The
Nominating Committee may consider candidates recommended by stockholders
as well
as from other sources such as other directors or officers, third party search
firms, or other appropriate sources. For all potential candidates, the
Nominating Committee may consider all factors it deems relevant, such as
a
candidate’s personal integrity and sound judgment, business and professional
skills and experience, independence, possible conflicts of interest, diversity,
the extent to which the candidate would fill a present need on the Board
of
Directors, and concern for the long-term interests of the stockholders. In
general, persons recommended by stockholders will be considered on the same
basis as candidates from other sources. If a stockholder wishes to recommend
a
candidate for director for election at the 2009 Annual Meeting of Stockholders,
it must follow the procedures described below under “Stockholder
Proposals.”
Audit
Committee Report
The
Audit
Committee has reviewed and discussed the Company’s audited financial statements
for the year ended December 31, 2007 with management of the Company. The
Audit
Committee also discussed with UHY LLP (“UHY”), the Company’s independent
registered public accounting firm, the matters required to be discussed by
the
Auditing Standards Board Statement on Auditing Standards No. 61, as amended.
As
required by Independence Standards Board Standard No. 1, as amended,
“Independence Discussion with Audit Committees,” the Audit Committee has
received and reviewed the required written disclosures and a confirming letter
from UHY regarding their independence, and has discussed the matter with
UHY.
Based
upon its review and discussions of the foregoing, the Audit Committee
recommended to the Board of Directors that the Company’s audited financial
statements for the year ended December 31, 2007 be included in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2007.
Audit
Committee:
R.
Wayne
Fritzsche
J.
Donald
Payne
P.
Thomas
Vogel
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit
Committee has appointed UHY, an independent registered public accounting
firm,
to audit the Company’s consolidated financial statements for the fiscal year
ending December 31, 2008. UHY has served as the Company’s independent registered
public accounting firm since September 14, 2006. A representative of UHY
will be
available during the Meeting to make a statement if such representative desires
to do so and to respond to questions.
Change
in Independent Registered Public Accounting Firm
On
September 14, 2006 the Audit Committee terminated the appointment
of Weinberg & Co., P.A. (“Weinberg”), as the Company’s independent
registered public accounting firm. Weinberg had served as the Company’s
independent registered public accounting firm since October 2003.
Weinberg's
reports on the Company’s consolidated financial statements for the fiscal years
ended December 31, 2004 and 2005 did not contain any adverse
opinion or a disclaimer of opinion, nor were the reports qualified or modified
as to uncertainty, audit scope or accounting principle. During the Company’s
fiscal years ended December 31, 2004 and 2005 and through September 14,
2006, there were no disagreements with Weinberg on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope
or
procedure, which disagreements, if not resolved to the satisfaction
of Weinberg, would have caused it to make reference thereto in its reports
on the Company’s financial statements for such years. During the Company’s
fiscal years ended December 31, 2004 and 2005 and through September 14,
2006, there were no reportable events as described in Item 304(a)(1)(iv)
of
Regulation S-B.
On September
14, 2006 the Audit Committee of the Board of Directors of the Company
engaged UHY to serve as the Company’s independent registered public
accounting firm. During the fiscal years ended December 31, 2004 and
2005 and through September 14, 2006, neither the Company nor anyone on its
behalf consulted with UHY with respect to any matters or events, including
any matters or events set forth and described in Items 304(a)(2)(i) and (ii)
of
Regulation S-B.
UHY
acts
as the Company’s principal independent registered public accounting firm.
Through December 31, 2006, UHY had a continuing relationship with UHY Advisors,
Inc. (“Advisors”) from which it leased auditing staff who were full time,
permanent employees of Advisors and through which UHY’s partners provide
non-audit services. UHY has no full time employees and therefore, no audit
services performed were provided by permanent full-time employees of UHY.
UHY
manages and supervises the audit services and audit staff, and is exclusively
responsible for the opinion rendered in connection with its
examination.
Independent
Registered Public Accounting Fees
The
following is a summary of the fees billed to the Company by UHY, the Company’
principal accountant, for the fiscal years ended December 31, 2007 and December
31, 2006, respectively:
| |
|
Fiscal 2007 Fees
|
|
Fiscal 2006 Fees
|
|
| |
|
($)
|
|
($)
|
|
|
Audit
Fees
|
|
$
|
105,691
|
|
$
|
155,162
|
|
|
Audit-Related
Fees
|
|
|
24,791
|
|
|
-
|
|
| |
|
$
|
130,482
|
|
$
|
155,162
|
|
Audit
Fees.
Consists of aggregate fees billed for professional services rendered for
the
audit of the Company’s consolidated financial statements and review of the
interim consolidated financial statements included in quarterly reports,
as well
as services that are normally provided by the independent registered public
accounting firm in connection with statutory and regulatory filings or
engagements.
Audit-Related
Fees.
Consists of aggregate fees billed for assurance and related services that
are
reasonably related to the performance of the audit or review of the Company’s
consolidated financial statements and are not reported under “Audit Fees.” Fees
billed by UHY for 2007 were fees associated with consents delivered in
connection with the Company’s Registration Statement on Form S-3 and certain
agreed upon procedures with respect to Source Scientific, LLC.
There
were no other fees for services rendered by UHY other than those described
above.
Audit
Committee Policy on Pre-Approval of Services
The
Audit
Committee’s policy is to pre-approve all audit and permissible non-audit
services provided by the independent registered public accounting firm. These
services may include audit services, audit-related services, tax services,
and
other services. Pre-approval is generally provided for up to one year. The
Audit
Committee may also pre-approve particular services on a case-by-case
basis.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND
MANAGEMENT
The
following table sets forth certain information as of June 30, 2008 concerning
the beneficial ownership of Common Stock for: (i) each director and director
nominee, (ii) each Named Executive Officer in the Summary Compensation Table
under “Executive Compensation” below, (iii) all executive officers and directors
as a group, and (iv) each person (including any “group” as that term is used in
Section 13(d)(3) of the Exchange Act) known by the Company to be the
beneficial owner of 5% or more of the Company's Common Stock.
Beneficial
ownership has been determined in accordance with the rules of the
Securities and Exchange Commission (“SEC”). Except as indicated by the footnotes
below, the Company believes, based on the information furnished to it, that
the
persons and entities named in the table below have sole voting and investment
power with respect to all shares of Common Stock that they beneficially own.
|
Name
|
|
Number of
Shares of
Common Stock
Beneficially
Owned (1)
|
|
Percent of
Class
|
|
|
|
|
|
|
|
|
|
Lloyd
I. Miller, III (2)*
|
|
|
157,686
|
|
|
7.2
|
%
|
|
4550
Gordon Drive
|
|
|
|
|
|
|
|
|
Naples,
FL 34102
|
|
|
|
|
|
|
|
|
Richard
T, Schumacher (3)*
|
|
|
474,154
|
|
|
19.4
|
%
|
|
130
Lake Ridge Drive
|
|
|
|
|
|
|
|
|
Taunton,
MA 02780
|
|
|
|
|
|
|
|
|
Edward
H. Myles
|
|
|
38,667
|
|
|
1.7
|
%
|
|
Edmund
Y. Ting, Ph.D
|
|
|
42,000
|
|
|
1.9
|
%
|
|
All
other executive officers
|
|
|
96,783
|
|
|
4.2
|
%
|
|
R.
Wayne Fritzsche
|
|
|
82,421
|
|
|
3.6
|
%
|
|
Calvin
A. Saravis, Ph.D
|
|
|
110,000
|
|
|
4.8
|
%
|
|
J.
Donald Payne
|
|
|
73,677
|
|
|
3.3
|
%
|
|
P.
Thomas Vogel
|
|
|
73,100
|
|
|
3.2
|
%
|
|
All
Executive Officers and Directors as
a Group (4)
|
|
|
990,802
|
|
|
33.8
|
%
|
|
*
|
Address
provided for beneficial owners of more than 5% of the Common
Stock.
|
(1)
Includes the following shares of Common Stock issuable upon exercise of options
exercisable within 60 days after June 30, 2008: Mr. Schumacher - 248,334;
Dr.
Saravis - 110,000; Mr. Fritzsche - 73,000; Mr. Payne - 68,000; Mr. Vogel
-
70,000; Mr. Myles - 36,667; Dr. Ting - 40,000; all other executive officers
-
90,000.
(2)
Based
on information contained in a Schedule 13G/A filed with the SEC on February
11,
2008, Mr. Miller reports sole voting and dispositive power with respect to
7,040
shares as a manager of a limited liability company that is the general partner
of a certain limited partnership. Mr. Miller reports shared voting and
dispositive power with respect to 150,646 shares as an investment advisor
to the
trustee of a certain family trust.
(3)
Does
not include 15,162 shares of Common Stock held by Mr. Schumacher’s minor son as
his wife exercises all voting and investment control over such
shares.
(4)
Includes an aggregate of 736,001 shares of Common Stock that the current
directors and executive officers have the right to acquire upon exercise
of
outstanding stock options exercisable within sixty
(60)
days
after June 30, 2008.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
Summary Compensation Table below sets forth the total compensation paid or
earned for the fiscal years ended December 31, 2007 and 2006 for: (i) each
individual serving as the Company’s Chief Executive Officer (“CEO”) or acting in
a similar capacity during any part of fiscal 2007 and 2006; and (ii) the
other
two most highly paid executive officers (collectively, the “Named Executive
Officers”).
| |
|
|
|
|
|
|
|
Option
|
|
All other
|
|
|
|
|
Name
and Principal Position
|
|
Fiscal Year
|
|
Salary (1)
|
|
Bonus (2)
|
|
Awards (3)
|
|
Compensation (4)
|
|
Total
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
T. Schumacher
|
|
|
2007
|
|
$
|
288,697
|
|
$
|
-
|
|
$
|
102,297
|
|
$
|
12,069
|
|
$
|
403,063
|
|
|
President
& Chief Executive Officer
|
|
|
2006
|
|
|
267,981
|
|
|
55,000
|
|
|
67,987
|
|
|
15,628
|
|
|
406,596
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward
H. Myles
|
|
|
2007
|
|
|
178,538
|
|
|
-
|
|
|
45,993
|
|
|
3,306
|
|
|
227,837
|
|
|
Senior
Vice President of Finance
|
|
|
2006
|
|
|
120,962
|
|
|
17,000
|
|
|
40,018
|
|
|
50,349
|
|
|
228,329
|
|
|
& Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edmund
Ting, Ph.D
|
|
|
2007
|
|
|
185,673
|
|
|
-
|
|
|
50,304
|
|
|
3,163
|
|
|
239,140
|
|
|
Senior
Vice President of Engineering
|
|
|
2006
|
|
|
114,423
|
|
|
17,500
|
|
|
40,340
|
|
|
3,234
|
|
|
175,497
|
|
(1)
Salary refers to base salary compensation paid through the Company’s normal
payroll process.
(2)
A
cash bonus is paid to executive officers based on a combination of factors
including the performance of the Company relative to specific objectives,
the
financial condition of the Company, and the performance of the individual
executive relative to specific objectives. Amounts for 2006 reflect bonuses
earned in 2006 and paid in February 2007. The Compensation Committee deferred
the discussion of executive bonuses for 2007, to be paid in 2008, until the
second half of 2008.
(3)
Amounts shown do not reflect compensation received by the Named Executive
Officers. Instead, the amounts shown are the compensation costs recognized
by
the Company in each of the fiscal years presented for option awards as
determined pursuant to SFAS 123R. Please refer to Note 2, xiii, “Accounting for
Stock-Based Compensation” in the Notes to the Company’s Consolidated Financial
Statements included in the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2007, for the relevant assumptions used to determine
the
valuation of stock option grants. Based on the assumptions outlined in the
Notes
to the Company’s Consolidated Financial Statements the value of stock options
awarded to executives and other employees during 2006 and 2007 was between
$2.55
and $3.00 per option.
(4)
“All
Other Compensation” includes the Company’s match to the executives’ 401(k)
contribution and premiums paid on life insurance for the executive. Both
of
these benefits are available to all employees of the Company. In the case
of Mr.
Schumacher, “All Other Compensation” also includes $7,980 in premiums paid by
the Company for a life insurance policy to which Mr. Schumacher’s wife is the
beneficiary. During 2006, “All Other Compensation” included approximately
$49,000 of reimbursed costs to relocate Mr. Myles and his family.
Outstanding
Equity Awards at Fiscal-Year End
The
following table sets forth certain information regarding outstanding stock
options awards for each of the Named Executive Officers as of December 31,
2007.
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options #
Exercisable
|
|
Number of Securities
Underlying
Unexercised Options
# Unexercisable (1)
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
T. Schumacher
|
|
|
40,000
|
|
|
0
|
|
$
|
2.60
|
|
|
5/2/2011
|
|
|
President
& Chief Executive Officer
|
|
|
60,000
|
|
|
0
|
|
$
|
3.08
|
|
|
2/11/2012
|
|
| |
|
|
30,000
|
|
|
0
|
|
$
|
2.70
|
|
|
12/2/2012
|
|
| |
|
|
75,000
|
|
|
0
|
(2) |
$
|
2.92
|
|
|
6/17/2015
|
|
| |
|
|
20,000
|
|
|
10,000
|
(2) |
$
|
3.86
|
|
|
3/30/2016
|
|
| |
|
|
23,334
|
|
|
46,666
|
(2) |
$
|
3.51
|
|
|
2/12/2017
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward
H. Myles
|
|
|
36,667
|
|
|
18,333
|
(3) |
$
|
3.86
|
|
|
4/3/2016
|
|
|
Senior
Vice President of Finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
& Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edmund
Y. Ting, Ph.D
|
|
|
40,000
|
|
|
20,000
|
(4) |
$
|
3.87
|
|
|
4/24/2016
|
|
|
Senior
Vice President of Engineering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
All
unvested stock options listed in this column were granted to the Named Executive
Officer pursuant to the Company’s 2005 Equity Incentive Plan. All of such stock
options vest ratably over three years and expire ten years after the date
of
grant. Unvested stock options become fully vested and exercisable upon a
change
of control of the Company.
(2)
Options to purchase 75,000 shares of Common Stock were granted to Mr. Schumacher
on June 17, 2005, of which options to purchase 25,000 shares became vested
on
June 17, 2006, and an additional 25,000 became vested on June 17, 2007 and
an
additional 25,000 shares became vested on June 17, 2008. Options to purchase
30,000 shares of Common Stock were granted to Mr. Schumacher on March 30,
2006
of which 10,000 became vested on March 30, 2007 and an additional 10,000
shares
became vested on March 30, 2008. Options to purchase 70,000 shares of Common
Stock were granted to Mr. Schumacher on February 12, 2007, of which 23,334
shares became vested on February 17, 2008.
(3)
Options to purchase 55,000 shares of Common Stock were granted to Mr. Myles
on
April 3, 2006, 18,334 shares became vested on April 3, 2007 and an additional
18,333 shares became vested on April 3, 2008.
(4)
Options to purchase 60,000 shares of Common Stock were granted to Dr. Ting
on
April 24, 2006, 20,000 became vested on April 24, 2007 and an additional
20,000
shares became vested on April 24, 2008.
Retirement
Plan
All
employees, including the Named Executive Officers, may participate in the
Company’s 401(k) Plan. Under the 401(k) Plan, employees may elect to make before
tax contributions of up to 60% of their base salary, subject to current Internal
Revenue Service limits. The 401(k) Plan does not permit an investment in
the
Company’s Common Stock. The Company matches employee contributions up to 50% of
the first 2% of the employee’s contribution. The Company’s contribution is 100%
vested immediately.
Severance
Arrangements
Each
of
Mr. Schumacher, Mr. Myles, Dr. Ting, Dr. Lazarev, Dr. Lawrence and Mr. Potter,
the Company’s executive officers, is entitled to receive a severance payment if
terminated by the Company without cause. The severance benefits would include
a
payment in an amount equal to one year of such executive officer’s annualized
base salary compensation plus accrued paid time off. Additionally, the officer
will be entitled to receive medical and dental insurance coverage for one
year
following the date of termination.
Change-in-Control
Arrangements
Each
of
the Company’s executive officers, other than Mr. Schumacher, is entitled to
receive a change of control payment in an amount equal to one year of such
executive officer’s annualized base salary compensation, accrued paid time off,
and medical and dental coverage, in the event of a change of control of the
Company. In the case of Mr. Schumacher this payment is equal to two years
of
annualized base salary compensation, accrued paid time off, and two years
of
medical and dental coverage.
Pursuant
to the Company’s 2005 Equity Incentive Plan, any unvested stock options held by
a Named Executive Officer will become fully vested upon a change in control
(as
defined in the 2005 Equity Incentive Plan) of the Company.
Director
Compensation
The
following table sets forth certain information regarding compensation earned
or
paid to the Company’s directors during fiscal 2007.
|
Name
|
|
Fees Earned or
Paid in Cash (1)
|
|
Option Awards (2)
|
|
Total
|
|
| |
|
|
|
|
|
|
|
|
R.
Wayne Fritzsche
|
|
$
|
32,000
|
|
$
|
-
|
|
$
|
32,000
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Calvin
A. Saravis, Ph.D
|
|
|
32,000
|
|
|
-
|
|
|
32,000
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
J.
Donald Payne
|
|
|
32,000
|
|
|
-
|
|
|
32,000
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
P.
Thomas Vogel
|
|
|
32,000
|
|
|
-
|
|
|
32,000
|
|
The
Company’s non-employee directors receive the following compensation for service
as a director of the Company:
(1)
A
quarterly stipend of $8,000, of which $4,000 is compensation for attending
meetings of the full Board of Directors (whether telephonic or in-person)
and
$4,000 is compensation for attending committee meetings. There is no
limit to
the number of meetings of the Board of Directors or committees that may
be
called. Cash compensation is paid on or immediately prior to the last
day of
each fiscal quarter.
(2)
During
2007 the Board of Directors decided not to award fully vested, non-qualified
stock options to its non-employee members.
PROPOSAL
NO. 2
AMENDMENT
TO THE PRESSURE BIOSCIENCES, INC.
2005
EQUITY INCENTIVE PLAN
Description
of Proposed Amendment
On
Friday, July 11, 2008, the Board of Directors approved, subject to stockholder
approval, an amendment to the Pressure BioSciences, Inc. 2005 Equity Incentive
Plan (the “2005 Equity Incentive Plan”), to increase the number of shares
reserved for issuance under the 2005 Equity Incentive Plan from 1,000,000
to
1,500,000 shares. As of June 30, 2008, there were 59,334 shares remaining
available for issuance under the 2005 Equity Incentive Plan.
If
the
amendment is approved by the stockholders, the first sentence of Section
3(a) of
the 2005 Equity Incentive Plan would be amended and restated as follows:
“Subject
to adjustment under Section 3(c), the aggregate number of shares of Common
Stock of the Company (the “Common Stock”) that may be issued pursuant to the
Plan is 1,500,000.”
Description
of the 2005 Equity Incentive Plan
The
following is a summary of the material features of the 2005 Equity Incentive
Plan.
Purpose
and Eligibility. The
purpose of the 2005 Equity Incentive Plan is to award stock options, stock
issuances and other equity interests in the Company (each, an “Award”) to
employees, officers, directors, consultants and advisors of the Company and
its
subsidiaries and to any other persons the Board of Directors determines to
have
made or is expected to make contributions to the Company. There are currently
twenty nine (29) persons (consisting of employees, officers and directors)
eligible to receive Awards under the 2005 Equity Incentive Plan.
Administration. The
2005 Equity Incentive Plan is currently administered by the Compensation
Committee of the Board of Directors or, to the extent permitted by applicable
law, by one or more executive officers of the Company designated by the Board
of
Directors (such committee and designee(s) together with the Board of Directors
are hereinafter referred to as the “Committee”) as permitted under the 2005
Equity Incentive Plan. The Committee has the authority to grant and amend
Awards, to adopt, amend and repeal rules relating to the 2005 Equity Incentive
Plan, and to interpret, construe and determine the terms and provisions of
the
2005 Equity Incentive Plan and any Award.
Shares
Subject to the 2005 Equity Incentive Plan. A
maximum of 1,000,000 shares of Common Stock of the Company are available
for issuance under the 2005 Equity Incentive Plan. As described above, if
Proposal No. 2 is approved, the number of shares of Common Stock available
for
issuance under the 2005 Equity Incentive Plan will be increased from 1,000,000
to 1,500,000. No participant in the 2005 Equity Incentive Plan may be granted
Awards during any one fiscal year to purchase or with respect to more than
75,000 shares of Common Stock. If any Award expires, or is terminated,
surrendered or forfeited, in whole or in part, without having been exercised
in
full, the unissued shares of Common Stock covered by such Award shall again
be
available for grant of Awards under the 2005 Equity Incentive Plan. If
shares of Common Stock issued pursuant to the 2005 Equity Incentive Plan
are repurchased by, or are surrendered or forfeited to, the Company at no
more
than cost, such shares of Common Stock shall again be available for the grant
of
Awards under the 2005 Equity Incentive Plan.
Subject
to the terms of the 2005 Equity Incentive Plan, in the event of a stock split,
reverse stock split, stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, exchange of shares,
liquidation, spin-off, split-up or other similar action, (i) the number and
class of securities available for Awards under the 2005 Equity Incentive
Plan
and the per-participant share limit, (ii) the number and class of
securities and vesting schedule for outstanding Awards and the exercise price
per share subject to each outstanding Award, (iii) the repurchase price per
share subject to repurchase and (iv) the terms of each outstanding Award,
shall be adjusted by the Company to the extent the Committee shall determine,
in
good faith, that such an adjustment is appropriate.
Awards
under the 2005 Equity Incentive Plan. Awards
under the 2005 Equity Incentive Plan may take the form of stock options (either
incentive stock options or non-qualified stock options), restricted stock
and
other stock-based awards, such as stock appreciation rights, phantom stock
awards or stock units. Subject to certain restrictions set forth in the 2005
Equity Incentive Plan, the Committee has the complete and absolute authority
to
set the terms, conditions and provisions of each Award, including the size
of
the Award, the exercise or base price, the vesting and exercisability schedule
(including provisions regarding acceleration or extension of vesting and
exercisability), the repurchase rights, and termination, cancellation and
forfeiture provisions. Each Award under the 2005 Equity Incentive Plan shall
be
evidenced by a written instrument in such form as the Committee shall determine
and may contain terms and conditions in addition to those set forth in the
2005
Equity Incentive Plan, provided that such terms and conditions do not contravene
the provisions of the 2005 Equity Incentive Plan or applicable law. The terms
of
each type of Award need not be identical and the Committee need not treat
participants uniformly. No Awards may be granted under the 2005 Equity Incentive
Plan after May 2, 2015.
The
Committee shall be subject to the following specific restrictions regarding
the
types and terms of specific Awards:
| |
·
|
The
terms and conditions of incentive stock options shall be subject
to and
comply with section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”) and any regulations thereunder.
|
| |
·
|
No
incentive stock option granted under the 2005 Equity Incentive
Plan may be
exercisable more than ten years after the date of grant (five years
after
the date of grant for incentive stock options granted to holders
of more
than ten percent of the Common Stock).
|
| |
·
|
Incentive
stock options may be granted only to employees of the Company.
|
| |
·
|
The
exercise price for stock options must at least equal to the par
value of
the Common Stock.
|
| |
·
|
The
exercise price for incentive stock options must be at least equal
the fair
market value of the Common Stock on the date of grant, and, in
the case of
incentive stock option granted to the holders of more than ten
percent of
the Common Stock, the exercise price must be at least 110% of the
fair
market value of the Common Stock on the date of the grant.
|
The
Committee will determine whether Awards granted pursuant to the 2005 Equity
Incentive Plan are settled in whole or in part in cash, Common Stock, or
such
other lawful consideration as the Committee may deem appropriate. The Company
may deduct from payments of any kind otherwise due a participant any federal,
state or local taxes of any kind required to be withheld in connection with
an
Award. In the Committee’s discretion, tax obligations required to be withheld in
respect of an Award may be paid in whole or in part in shares of Common Stock,
including shares retained from such Award. The Committee will determine the
effect on the Award of the death, disability, or retirement or other termination
of employment of a participant and the extent to which and period during
which
the participant's legal representative, guardian or designated beneficiary
may
receive payment of an Award or exercise rights thereunder.
The
Committee may grant Awards entitling participants to acquire shares of Common
Stock, subject to (i) the delivery to the Company by the participant of a
check in an amount at least equal to the par value of the shares of Common
Stock
purchased, and (ii) the right of the Company to repurchase all or part of
such shares of Common Stock at their issue price or other stated or formula
price from the participant in the event that conditions specified by the
Committee in the applicable Award are not satisfied prior to the end of the
applicable restriction period established by the Committee for such Award.
These
Awards are referred to as restricted stock Awards. The Committee shall determine
the terms and conditions of any such restricted stock Award.
The
Committee also has the right to grant other Awards based upon the Common
Stock,
such Awards having such terms and conditions as the Committee may determine,
including, without limitation, the grant of shares of Common Stock based
upon
certain conditions, the grant of securities convertible into Common Stock
and
the grant of stock appreciation rights, phantom stock awards or stock units.
Except
as
the Committee may otherwise determine or provide in an Award, Awards shall
not
be sold, assigned, transferred, pledged or otherwise encumbered by the
participant to whom they are granted, except by will or the laws of descent
and
distribution, and during the life of the participant, shall be exercisable
only
by the participant; provided, however, that nonqualified stock options may
be
transferred pursuant to a qualified domestic relations order or to a
grantor-retained annuity trust or a similar estate-planning vehicle in which
the
trust is bound by all provisions of the nonqualified stock option which are
applicable to the participant.
Unless
otherwise expressly provided in the applicable Award, upon the occurrence
of an
acquisition of the Company (as defined in the 2005 Equity Incentive Plan),
the
Committee shall in its sole discretion as to outstanding Awards (on the same
basis or on different bases), take one or more of the following actions:
(i) make appropriate provision for the continuation of such Awards by the
Company or the assumption of such Awards by the surviving or acquiring entity;
(ii) accelerate the date of exercise or vesting of such Awards or any
installment of any such Awards; (iii) permit the exchange of all Awards for
the right to participate in any stock option or other employee benefit plan
of
any successor corporation; and (iv) provide for the termination of any such
Awards immediately prior to the consummation of the acquisition, provided
that
no such termination will be effective if the acquisition is not consummated.
An
“acquisition” is defined in the 2005 Equity Incentive Plan as any merger,
business combination, consolidation or purchase of outstanding capital stock
of
the Company in which the persons who were the beneficial owners of the
outstanding Common Stock immediately prior to such transaction do not, following
such transaction, beneficially own, directly or indirectly, more than 50%
of the
then outstanding shares of common stock of the corporation resulting from
such
transaction (other than as a result of a financing transaction); or any sale
of
all or substantially all of the capital stock or assets of the Company.
The
Board
of Directors may amend, suspend or terminate the 2005 Equity Incentive Plan
or
any portion thereof at any time; provided that no amendment shall be made
without stockholder approval if such approval is necessary to comply with
any
applicable law, rules or regulations.
The
granting of Awards under the 2005 Equity Incentive Plan is discretionary,
and
the Company cannot determine at this time the number or type of Awards to
be
granted in the future to any particular person or group.
Federal
Income Tax Consequences
The
following general discussion of the United States federal income tax
consequences of Awards granted under the 2005 Equity Incentive Plan is based
upon the provisions of the Code as in effect on the date hereof, current
regulations promulgated and proposed thereunder, existing public and private
administrative rulings and pronouncements of the Internal Revenue Service,
and
judicial decisions, all of which are subject to change (perhaps with retroactive
effect). This discussion is not intended to be a complete discussion of all
of
the federal income tax consequences of the 2005 Equity Incentive Plan or
of the
requirements that must be met in order to qualify for the tax treatment
described herein. Changes in the law and regulations may modify the discussion,
and in some cases the changes may be retroactive. No information is provided
as
to state, local or foreign tax laws. In addition, because tax consequences
may
vary and certain exceptions may apply depending upon personal circumstances
of
individuals, each participant should consider his or her personal situation
and
consult with his or her tax advisor with respect to the specific tax
consequences applicable to him or her. The 2005 Equity Incentive Plan is
not
qualified under Section 401 of the Code, nor is it subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended.
Incentive
Stock Options. An
option holder generally will not recognize taxable income upon either the
grant
or the exercise of an incentive stock option. However, under certain
circumstances, there may be alternative minimum tax or other tax consequences,
as discussed below.
An
option
holder generally will recognize taxable income upon the disposition of the
shares of Common Stock received upon exercise of an incentive stock option.
Any
gain recognized upon a disposition that is not a “disqualifying disposition” (as
defined below) will be taxable as long-term capital gain.
A
“disqualifying disposition” means any disposition of shares of Common Stock
acquired on the exercise of an incentive stock option when such disposition
occurs within two years of the date the stock option was granted or within
one
year of the date the shares were transferred to the option holder. The use
of
the shares acquired pursuant to the exercise of an incentive stock option
to pay
the option exercise price under another incentive stock option is treated
as a
disposition for this purpose. In general, if an option holder makes a
disqualifying disposition, the holder will have ordinary income in an amount
equal to the excess, if any, of (i) the lesser of (a) the fair market
value of the shares on the date of exercise or (b) the amount actually
realized on the disposition over (ii) the option exercise price. In
addition, such holder would realize further gain or loss equal to the difference
between the amount realized and the fair market value of the shares on the
date
of exercise (in the case of a gain) or the option price (in the case of a
loss).
Such further gain or loss would be either a long-term or short-term capital
gain
or loss, depending on the option holder's holding period for the shares.
The
holding period for the shares generally would begin on the date the shares
were
acquired and would not include the period of time during which the stock
option
was held. In the case of a gift or certain other transfers, the amount of
ordinary income taxable to the option holder is not limited to the amount
of
gain which would be recognized in the case of a sale. Instead, it is equal
to
the excess of the fair market value of the shares on the date of exercise
over
the option exercise price.
In
general, in the year of exercise of an incentive stock option, an option
holder
must compute the excess of the fair market value of the shares issued upon
exercise over the exercise price and include this amount in the calculation
of
his or her alternative minimum taxable income. Because of the many adjustments
that apply to the computation of the alternative minimum tax, it is not possible
to predict the application of the tax to any particular option holder. However,
an option holder may owe alternative minimum tax even though he or she has
not
disposed of the shares or otherwise received any cash with which to pay the
tax.
The alternative minimum tax rate is higher than the rate applicable to long-term
capital gains.
Nonqualified
Stock Options. The
recipient of a non-qualified stock option under the 2005 Equity Incentive
Plan
generally will not recognize any taxable income at the time the stock option
is
granted. Upon exercise, the option holder will generally recognize ordinary
taxable income in an amount equal to the excess of the fair market value
of the
shares of Common Stock received on the date of exercise over the option exercise
price. Upon a subsequent sale of the shares, long-term or short-term capital
gain or loss (depending upon the holding period) will generally be recognized
equal to the difference between the amount realized and the fair market value
of
the shares on the date of exercise. The holding period for the shares generally
would begin on the date the shares were acquired and would not include the
period of time during which the stock option was held.
Certain
option holders are subject to Section 16(b) of the Exchange Act
(“Section 16(b)”) upon their sale of shares of Common Stock. If an option
holder is subject to Section 16(b), the date on which the fair market value
of the shares is determined may be postponed. The IRS regulations have not
yet
been amended to conform with the most recent revision to Section 16(b).
However, it is generally anticipated that the date on which the fair market
value of the shares is determined (the “Determination Date”) will be postponed
to the earlier of (i) the date six months after the date the stock option
was granted, or, if earlier, (ii) the first day on which the sale of the
shares would not subject the individual to liability under Section 16(b).
It is possible that the six month period will instead run from the option
holder's most recent grant or purchase of Common Stock prior to his or her
exercise of the stock option. On the Determination Date, the option holder
will
generally recognize ordinary taxable income in an amount equal to the excess
of
the fair market value of the shares of Common Stock at that time over the
option
exercise price.
The
Company will generally be entitled to a compensation deduction for Federal
income tax purposes in an amount equal to the taxable income recognized by
the
option holder, provided the Company reports the income on a timely provided
and
filed Form W-2 or 1099, whichever is applicable.
Section 162(m)
of the Code generally limits the deductibility of compensation paid to the
chief
executive officer and the four other highest paid officers to $1,000,000
per
year. Performance-based compensation is not subject to this limitation on
deductibility. Compensation qualifies as performance-based only if it is
payable
on account of the attainment of one or more performance goals and certain
other
requirements are satisfied.
In
the
case of a nonqualified stock option, an option holder who pays the option
exercise price, in whole or in part, by delivering shares of Common Stock
already owned by him or her will generally recognize no gain or loss for
Federal
income tax purposes on the shares surrendered, but otherwise will be taxed
according to the rules described above. However, if shares received on the
exercise of an incentive stock option are used to exercise a nonqualified
stock
option within the time periods that apply to a disqualifying disposition,
then
the rules for disqualifying dispositions, described above, will apply. To
the
extent the shares acquired upon exercise are equal in number to the shares
surrendered, the basis of the shares received will be equal to the basis
of the
shares surrendered. The basis of the shares received in excess of the shares
surrendered upon exercise will be equal to the fair market value of the shares
on the date of exercise, and the holding period for the shares received will
commence on that date.
Restricted
Stock Awards. Generally,
restricted stock is not taxable to a participant at the time of grant, but
instead is included in ordinary income (at its then fair market value) when
the
restrictions lapse, unless a Section 83(b) election is made. A participant
may elect to recognize income at the time of grant, in which case the fair
market value of the stock at the time of grant is included in ordinary income
and there is no further income recognition when the restrictions lapse. In
order
to be effective, the Section 83(b) election must be made and filed with the
IRS within 30 days after grant. The Company is entitled to a tax deduction
in an amount equal to the ordinary income recognized by the participant.
Other
Awards. In
the case of other Awards, the participant will generally recognize ordinary
income in an amount equal to any cash received and the fair market value
of any
shares received on the date of payment or the date of delivery of the underlying
shares and the Company will generally be entitled to a corresponding tax
deduction.
Vote
Required to Approve the Amendment to the 2005 Equity Incentive Plan
The
affirmative vote of the holders of a majority of the holders of the Company's
Common Stock present in person or by proxy at the Meeting and entitled to
vote
thereon is required for the approval of Proposal No. 2.
The
Board of Directors recommends that stockholders vote FOR the amendment to
the
2005 Equity Incentive Plan.
Equity
Compensation Plan Information
The
Company maintains a number of equity compensation plans for employees, officers,
directors and other entities and individuals whose efforts contribute to
the
Company’s success. The table below sets forth certain information as of the
Company’s fiscal year ended December 31, 2007 regarding the shares of Common
Stock available for grant or granted under the Company’s equity compensation
plans.
|
|
|
Number of securities
to be issued upon
exercise of
outstanding options
|
|
Weighted-average
exercise price of
outstanding options
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans
|
|
|
Equity
compensation plans approved by security holders
|
|
|
1,120,500
|
|
$
|
3.45
|
|
|
137,800
|
|
| |
Includes
the following plans: 1994 ISO Stock Option Plan, 1999 Non-Qualified
Stock
Option Plan, and 2005 Equity Incentive
Plan.
|
PROPOSAL
NO. 3
AUTHORIZATION
OF CAPITAL RAISING TRANSACTIONS
On
July
11, 2008, the Board of Directors unanimously found it to be advisable and
in the
best interests of the Company to issue, in connection with one or more capital
raising transactions to finance the Company, up to 4,500,000 shares of Common
Stock (including pursuant to preferred stock, options, warrants, convertible
debt or other securities exercisable for or convertible into Common Stock),
upon
such terms as the Board of Directors shall deem to be in the best interests
of
the Company, for an aggregate consideration of not more than $18,000,000
and at
an effective price not less than 80% of the market price of the Company’s Common
Stock at the time of issuance, subject to stockholder approval. Any issuance
of
stock pursuant to this resolution must occur, if at all, in the three month
period commencing with the date of the approval of this proposal by the
stockholders of the Company.
The
Company is seeking stockholder approval for the potential issuance of the
shares
subject to these limitations.
Nasdaq
Marketplace Rule 4350(i)(1)(D) requires stockholder approval prior to the
sale or issuance or potential issuance of shares, in a transaction other
than a
public offering, equal to 20% or more of the company’s outstanding common stock
or 20% or more of the voting power of the company outstanding before the
issuance, if the effective sale price of the Common Stock is less than the
greater of the book or market value of the Common Stock. Shares of the Company’s
Common Stock issuable upon the exercise or conversion of warrants, options,
debt
instruments, preferred stock or other equity securities issued or granted
in
such a capital raising transaction are considered shares issued in such a
transaction in determining whether the 20% limit has been reached. Given
the
uncertainty of the ultimate sales price of securities sold in such transactions,
and the number of shares of Common Stock that may be sold in such transactions,
the sale of securities in one or more possible transactions will likely result
in the issuance of 20% or more of the outstanding Common Stock of the Company
or
20% or more of the voting power of the Company’s outstanding stock at a price
less than the greater of the book value or market value of the shares. In
order
to comply with the possible application of this Nasdaq rule, the Company
is
seeking stockholder approval for the potential issuance and sale of shares
in
one or more capital raising transactions so that the Board of Directors will
have flexibility to timely enter into and close such capital raising
transactions. If the Company waited to arrange for a meeting of its stockholders
to approve a specific transaction, it could delay and possibly jeopardize
the
closing of such transaction.
The
Company is seeking approval for up to a 20% discount from “market value,” as
defined by rules of the Nasdaq Stock Market, of Common Stock. Nasdaq requires
us
to include a maximum potential discount in stockholder proposals such as
this
one. The actual discount, if any, subject to the maximum discount, will be determined
by
the Board of Directors and will depend upon market conditions at the time
of the
financing or financings.
Any
transaction requiring approval by stockholders under Nasdaq
Rule 4350(i)(1)(D) would be likely to result in a significant increase in
the number of shares of Common Stock outstanding, and current stockholders
will
own a smaller percentage of the outstanding Common Stock. Moreover, the Company
might, as part of any sale of securities, be required to provide the purchaser
with securities that are registered or whose resale will be registered. The
issuance of these securities will cause a significant reduction in the
percentage interests of current stockholders in the voting power, liquidation
value, and book and market value of the Company, and in its future earnings.
The
sale or resale of these securities could cause the market price of the Common
Stock to decline.
Approval
of this proposal will, subject to the limitations set forth in the proposal,
give the Board of Directors discretion to determine the amount, type and
terms
of securities to be issued by the Company. For example, the Company may issue
Common Stock, preferred stock, options, warrants, convertible debt or other
securities exercisable for or convertible into Common Stock. The Board of
Directors will have discretion to determine any applicable dividend or interest
rates, conversion or exercise prices, voting rights, redemption prices, maturity
dates and similar matters. If securities convertible into or exercisable
for
Common Stock are issued and such securities, at the time of issuance, constitute
20% or more of the Company’s securities or 20% or more of the Company’s voting
power outstanding prior to such issuance, then stockholder approval of this
proposal also will constitute approval of the issuance of shares of Common
Stock
upon conversion or exercise of such securities, and no additional approval
will
be solicited.
The
foregoing description of various forms of financings and the reasons for
the
financing is included for informational purposes to stockholders in connection
with this proxy solicitation and does not constitute an offer to sell or
a
solicitation of an offer to buy any securities of the Company. The Company
cannot guarantee that any financing will be completed (or, if so, what the
terms
or timing may be) and, accordingly, cannot be certain that it will receive
any
proceeds from any potential financing. No financing will go forward unless
the
Board of Directors determines that the proposed terms and conditions are
in the
best interests of the stockholders at the time. If the Board of Directors
determines that market conditions appear favorable for the issuance of
additional securities by the Company and that such issuance is in the best
interests of the Company, the Company could sell up to a total of 4,500,000
shares of its Common Stock, including securities exercisable for or convertible
into Common Stock. The types of securities to be sold and price at which
it will
be sold are subject to market conditions and negotiations with investors.
Vote
Required
The
affirmative vote of the holders of a majority of the holders of the Company's
Common Stock present in person or by proxy at the Meeting and entitled to
vote
thereon is required for the approval of Proposal No. 3.
The
Board of Directors recommends that stockholders vote FOR authorizing the
Company
to issue, in connection with one or more capital raising transactions to
finance
the Company, up to 4,500,000 shares of the Company’s Common Stock (including
pursuant to preferred stock, options, warrants, convertible debt or other
securities exercisable for or convertible into Common Stock), upon such terms
as
the Board of Directors shall deem to be in the best interests of the Company,
for an aggregate consideration of not more than $18,000,000 and at an effective
price not less than 80% of the market price of the Company’s Common Stock at the
time of issuance, such issuance or issuances to occur, if at all, in the
three
month period commencing with the date of the approval of this proposal by
the
stockholders of the Company.
TRANSACTIONS
WITH RELATED PERSONS
On
December 29, 2006, Richard T. Schumacher, the Company’s President and Chief
Executive Officer, delivered to the Company 249,875 shares of his Common
Stock
in full and complete satisfaction and payment of all outstanding amounts,
including all principal and accrued interest, of Mr. Schumacher’s loan payable
to the Company. The loan amount consisted of $1,000,000 in principal and
$25,487
in interest accrued in the quarter ended December 31, 2006. The number of
shares
was determined based upon a value of $4.10 per share, the volume weighted
average trading price of the shares of Common Stock on the NASDAQ Capital
Market
during the 60 trading days ending on December 29, 2006. In connection with
the
payment of the loan, the Company terminated its security interest in Mr.
Schumacher’s shares of Common Stock, and released to Mr. Schumacher the
remaining 229,782 shares of Common Stock previously held as
collateral.
OTHER
MATTERS
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires the Company's executive officers and
directors, and persons who own more than 10% of the Company's Common Stock,
to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with
the
SEC.
Based
solely on the Company’s review of the copies of such filings it has received and
written representations from certain reporting persons, the Company believes
that all of its executive officers, directors, and greater than 10% stockholders
complied with all Section 16(a) filing requirements applicable to them during
the Company’s fiscal year ended December 31, 2007.
Other
Proposed Action
The
Board
of Directors knows of no matters which may come before the Meeting other
than
the matters described in this proxy statement. However, if any other matters
should properly be presented to the Meeting, the persons named as proxies
shall
have discretionary authority to vote the shares represented by the accompanying
proxy in accordance with their own judgment.
Stockholder
Proposals
Proposals
which stockholders intend to present at the Company's 2009 Annual Meeting
of
Stockholders (“2009 Annual Meeting”) and wish to have included in the Company's
proxy materials pursuant to Rule 14a-8 promulgated under the Exchange Act,
must
be received by the Company no later than April 13, 2009. If the date of next
year’s annual meeting is moved by more than 30 days before or after the
anniversary date of this year’s annual meeting, then the deadline for inclusion
of a stockholder proposal in the Company’s proxy materials is instead a
reasonable time before the Company begins to print and send its proxy materials
for that meeting.
Stockholders
who wish to make a proposal at the Company’s 2009 Annual Meeting, other than one
that will be included in the Company’s proxy materials, should notify the
Company no later than June 27, 2009, unless the date of next year’s annual
meeting is moved by more than 30 days before or after the anniversary date
of
this year’s annual meeting, in which case the notice must be received a
reasonable time before the Company sends its proxy materials for that meeting.
If a proponent who wishes to present such a proposal at the 2009 Annual Meeting
fails to notify the Company by the proper date, the proxies solicited by
the
Board of Directors, with respect to such 2009 Annual Meeting, may grant
discretionary authority to the proxies named therein, to vote with respect
to
such matter if such matter is properly brought before the 2009 Annual Meeting.
If a stockholder makes a timely notification, the proxies may still exercise
discretionary authority under circumstances consistent with the proxy rules
of
the SEC.
Stockholders
may make recommendations to the Nominating Committee of candidates for its
consideration as nominees for director at the 2009 Annual Meeting by submitting
the name, qualifications, experience, and background of such person, together
with a statement signed by the nominee in which he or she consents to act
as
such, to the Nominating Committee, c/o Clerk, Pressure BioSciences, Inc.,
14
Norfolk Avenue, South Easton, MA 02375. Generally, under the Company’s Bylaws,
notice of such recommendations must be submitted in writing not later than
90
days prior to the anniversary date of the immediately preceding annual meeting
or special meeting in lieu thereof and must contain specified information
and
conform to certain requirements set forth in the Company’s Bylaws. The Company
will accept from stockholders recommendations for nominees for director to
be
considered in connection with the 2009 Annual Meeting no later than June
14,
2009. In addition, any persons recommended should at a minimum meet the criteria
and qualifications referred to in the Nominating Committee’s charter, a copy of
which may be obtained from the Company by written request sent to its principal
executive offices. The Nominating Committee may refuse to acknowledge the
nomination of any person not made in compliance with the procedures set forth
herein or in the Company’s Bylaws.
Incorporation
By Reference
To
the
extent that this Proxy Statement has been or will be specifically incorporated
by reference into any filing by the Company under the Securities Act of 1933,
as
amended, or the Exchange Act, the sections of the Proxy Statement entitled
“Audit Committee Report” shall not be deemed to be so incorporated, unless
specifically otherwise provided in any such filing.
Annual
Report on Form 10-K
Additional
copies of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2007, and as filed with the SEC, are available to stockholders
without charge upon written request addressed to Clerk, Pressure BioSciences,
Inc., 14 Norfolk Avenue, South Easton, MA 02375.
IT
IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE
URGED TO FILL IN, SIGN, AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
PROXY
PRESSURE
BIOSCIENCES, INC.
The
undersigned hereby appoint Richard T. Schumacher and Edward H. Myles, acting
singly, with full power of substitution, attorneys and proxies to represent
the
undersigned at the 2008 Special Meeting in Lieu of Annual Meeting of
Stockholders of Pressure BioSciences, Inc. to be held on Friday, September
12,
2008 and at any adjournment(s) or postponement(s) thereof, with all power
which
the undersigned would possess if personally present, and to vote all shares
of
stock which the undersigned may be entitled to vote at said meeting upon
the
matters set forth in the Notice of and Proxy Statement for the Meeting
in
accordance with the following instructions and with discretionary authority
upon
such other matters as may come before the Meeting. All previous proxies
are
hereby revoked.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED
AS
DIRECTED BY THE UNDERSIGNED AND IF NO DIRECTION IS INDICATED, IT WILL BE
VOTED
FOR THE ELECTION OF THE NOMINEE AS DIRECTOR AND FOR PROPOSALS 2 AND 3.
(Please
return this proxy to the Company by mail or by hand in enclosed envelope)
x Please
indicate your vote below, as in this example.
The
Board of Directors recommends a vote FOR the election of the nominee as
director
and FOR Proposals 2 and 3.
1. To
elect the following nominee as a Class III Director:
Nominee:
Richard T. Schumacher
o
FOR
NOMINEE
o
WITHHOLD
AUTHORITY TO VOTE FOR NOMINEE
If
you wish to withhold authority to vote for the nominee for Director, strike
a
line through the nominee's name shown above.
2.
To amend the Company’s 2005 Equity Incentive Plan to increase the number of
shares of common stock available for issuance under the plan from 1,000,000
to
1,500,000.
3. To
approve the authorization for the Company to issue, in connection with
one or
more capital raising transactions to finance the Company, up to 4,500,000
shares
of common stock (including pursuant to preferred stock, options, warrants,
convertible debt or other securities exercisable for or convertible into
common
stock), upon such terms as the Board of Directors shall deem to be in the
best
interests of the Company, for an aggregate consideration of not more than
$18,000,000 and at an effective price not less than 80% of the market price
of
the Company’s common stock at the time of issuance, such issuance or issuances
to occur, if at all, in the three month period commencing with the date
of the
approval of this proposal by the stockholders of the
Company.
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MARK
HERE FOR ADDRESS CHANGE AND NOTE SUCH CHANGE AT
LEFT
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(Signatures
should be the same as the name printed hereon. Executors, administrators,
trustees, guardians, attorneys, and officers of corporations should add
their
titles when signing).
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Signature:
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Title:
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Date:
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Signature:
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Title:
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Date:
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