TENAX THERAPEUTICS, INC.
10-Ks and 10-Qs
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
☐
Preliminary Proxy
Statement
☐
Confidential, for
Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy
Statement
☐
Definitive
Additional Materials
☐
Soliciting Material
Pursuant to Rule 14a-12
TENAX THERAPEUTICS, INC.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
☒
No fee
required.
☐
Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1)
Title of each class
of securities to which transaction applies:
(2)
Aggregate number of
securities to which transaction applies:
(3)
Per unit price or
other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4)
Proposed maximum
aggregate value of transaction:
(5)
Total fee
paid:
☐
Fee paid previously
with preliminary materials.
☐
Check box if any
part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
(1)
Amount Previously
Paid:
(2)
Form, Schedule or
Registration Statement No.:
(3)
Filing
Party:
(4)
Date
Filed:
TENAX THERAPEUTICS, INC.
ONE Copley Parkway, Suite 490
Morrisville, North Carolina 27560
April 20, 2018
Dear
Stockholders:
It is
my pleasure to invite you to the Annual Meeting of Stockholders of
Tenax Therapeutics, Inc., to be held on
June 13, 2018
, at 9:00 a.m. at the offices
of Tenax Therapeutics, Inc. located at ONE Copley Parkway, Suite
490, Morrisville, North Carolina 27560. This booklet includes the
Notice of Annual Meeting of Stockholders and Proxy Statement. The
Proxy Statement provides information about the business we will
conduct at the meeting. We hope you will be able to attend the
meeting, where you can vote in person.
The
matters to be acted upon at the meeting are described in the
accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement.
Whether
or not you plan to attend the Annual Meeting personally, and
regardless of the number of shares you own, it is important that
your shares be represented at the Annual Meeting. We need more than
half of our outstanding common shares to be represented at the
Annual Meeting to establish a quorum. Every vote counts!
Accordingly, we urge you to complete the enclosed proxy and return
it to our vote tabulators promptly in the envelope provided. If you
do attend the Annual Meeting and wish to vote in person, you may
withdraw your proxy at that time. You may also elect to vote your
shares by telephone or electronically via the Internet. With
respect to shares held through a broker, bank or nominee, please
follow the separate instructions from your broker, bank or nominee
on how to vote your shares.
Sincerely,
/s/ Michael B.
Jebsen
Michael
B. Jebsen
Interim
Chief Executive Officer,
President and Chief
Financial Officer
YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN AND RETURN THE ENCLOSED
PROXY, VOTE YOUR SHARES BY TELEPHONE OR INTERNET, OR ATTEND THE
ANNUAL MEETING IN PERSON.
TENAX THERAPEUTICS, INC.
ONE Copley Parkway, Suite 490
Morrisville, North Carolina 27560
Notice of Annual Meeting of Stockholders
To Be Held on June 13, 2018
To the
Stockholders:
The
stockholders of Tenax Therapeutics, Inc. (the
“Company”) will hold an annual meeting (the
“Annual Meeting”) on
June
13, 2018
, at 9:00 a.m. at the offices of Tenax Therapeutics,
Inc. located at ONE Copley Parkway, Suite 490, Morrisville, North
Carolina 27560.
The
purpose of the meeting is to propose and act upon the following
matters:
1.
the election of the
six director
nominees described in the
Proxy Statement
to serve as directors until the sooner of
the 2019 Annual Meeting of Stockholders or the election and
qualification of their successors;
and
2.
the ratification of
the appointment of Cherry Bekaert LLP as our independent registered
public accounting firm for the fiscal year ending December 31,
2018.
At the
Annual Meeting we may transact such other business as may properly
come before the meeting or any adjournment thereof.
The
above matters are described in the Proxy Statement accompanying
this notice. The board of directors (the “Board”)
recommends that you vote “FOR” the election of the
director nominees listed in this proxy statement and
“FOR” ratification of the appointment of Cherry Bekaert
LLP as the independent registered public accounting firm of the
Company.
The
Board has fixed the close of business on
April 16, 2018
as the record date for
determining those stockholders who will be entitled to notice of
and to vote at the Annual Meeting. Representation of at least a
majority in voting interest of our common stock, either in person
or by proxy, is required to constitute a quorum for purposes of
voting on the proposals set forth above.
It
is important that your shares be represented at the Annual Meeting
to establish a quorum.
WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
Your proxy may be revoked at any time prior to the time it is voted
at the Annual Meeting.
Your
vote is important, and we appreciate your cooperation in
considering and acting on the matters presented.
By
order of the Board of Directors,
/s/ Nancy J.
Hecox
Nancy
J. Hecox, Corporate Secretary
April 20, 2018
TENAX THERAPEUTICS, INC.
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy
Materials
For the Stockholder Meeting to be held on
June 13, 2018
The Notice of Annual Meeting of Stockholders, Proxy Statement, Form
of Proxy, and 2018 Annual Report to Stockholders are available
at
www.iproxydirect.com/TENX
The
board of directors (the “Board of Directors” or the
“Board”) of Tenax Therapeutics, Inc. is asking for your
proxy for use at the 2018 Annual Meeting of Stockholders (the
“Annual Meeting”) and any adjournments of the meeting.
The meeting will be held at the offices of Tenax Therapeutics, Inc.
located at ONE Copley Parkway, Suite 490, Morrisville, North
Carolina 27560 on June 13, 2018, at 9:00 a.m. local time, to elect
the six director nominees described in this Proxy Statement, to
ratify the appointment of Cherry Bekaert LLP as our independent
registered public accounting firm, and to conduct such other
business as may be properly brought before the
meeting.
The Board of Directors recommends that you vote “FOR”
the election of the director nominees listed in this proxy
statement and “FOR” ratification of the appointment of
Cherry Bekaert LLP as our independent registered public accounting
firm.
This
proxy statement and the accompanying proxy card are first being
delivered to stockholders on or about April 20, 2018.
All
references in this Proxy Statement to “Tenax,”
“we,” “our,” and “us” mean
Tenax Therapeutics, Inc. All numbers of shares or share prices
relating to our common stock in this Proxy Statement reflect the
1-for-20 reverse stock split of our common stock on February 23,
2018.
What is the difference between holding shares as a stockholder of
record and as a beneficial owner?
Many of
our stockholders hold their shares through a broker, bank or other
nominee rather than directly in their own name as the stockholder
of record. As summarized below, there are some distinctions between
shares held of record and those owned beneficially.
Stockholder of Record
. If your shares
are registered directly in your name with our transfer agent,
Issuer Direct Corporation
(“Issuer Direct”)
, you are considered, with
respect to those shares, the stockholder of record, and these proxy
materials are being sent directly to you by
Issuer Direct
on our behalf. As the
stockholder of record, you have the right to grant your voting
proxy directly to us or to vote in person at the Annual Meeting. We
have enclosed a proxy card for you to use.
Beneficial Owner
. If your shares are
held in a stock brokerage account or by a bank or other nominee,
you are considered the beneficial owner of shares held in street
name and the proxy materials are being sent to you by your broker
or nominee who is considered, with respect to those shares, the
stockholder of record. As the beneficial owner, you have the right
to direct your broker or nominee on how to vote and are also
invited to attend the Annual Meeting. However, since you are not
the stockholder of record, you may not vote these shares in person
at the meeting unless you receive a proxy from your broker or
nominee. Your broker or nominee has enclosed a voting instruction
card for you to use. If you wish to attend the Annual Meeting and
vote in person, please mark the box on the voting instruction card
received from your broker or nominee and return it to them so that
you can receive a legal proxy to present at the Annual
Meeting.
How many votes do I have?
You
are entitled to one vote for each share of our common stock that
you hold.
How is the vote counted?
Votes cast by proxy or in person at the Annual
Meeting will be counted by persons appointed by us to act as
tellers for the meeting. The tellers will count shares represented
by proxies that withhold authority to vote for a nominee for
election as a director only as shares that are present and entitled
to vote for purposes of determining the presence of a quorum. None
of the withheld votes will be counted as votes “for” a
director. Shares properly voted to “abstain” and broker
non-votes on a particular matter are considered as shares that are
entitled to vote for the purpose of determining a quorum but
are generally not
treated as votes
cast for the matter.
Abstentions do not count as a vote
against the proposals.
A broker
non-vote occurs when a broker holding shares for a customer does
not vote on a particular proposal because the broker has not
received voting instructions on the matter from its customer and is
barred by stock exchange rules from exercising discretionary
authority to vote on the matter.
1
How do I vote?
If
you are a stockholder of record, you may vote using any of the
following methods:
●
Proxy Vote by Mail.
Return the enclosed proxy form by mail
using the enclosed prepaid envelope. Be sure to complete, sign and
date the form before mailing. If you are a stockholder of record
and you return your signed proxy form but do not indicate your
voting preferences, the persons named in the proxy form will
vote
FOR
the election of each director nominated by the
Board of Directors,
FOR
the ratification of the appointment of Cherry
Bekaert LLP as our independent registered public accounting firm,
and at the discretion of the persons named in the proxy on any
other matter that comes before the meeting for a
vote.
●
Proxy Vote by Internet.
You may use the Internet to transmit
your voting instructions up until 11:59 p.m. Eastern Daylight Time
on
June 12, 2018
by going to the
websit
e
www.iproxydirect.com/TENX
.
Please
have your proxy card in hand when you access the website and follow
the instructions to obtain your records and to create an electronic
voting instruction form.
●
Proxy Vote by Phone.
You may use any touch-tone telephone
to transmit your voting instructions up until 11:59 p.m. Eastern
Daylight Time on
June 12,
2018
by calling the toll-free
number
1-866-752-VOTE (8683).
Have your proxy card in hand when you call and then follow the
instructions.
●
In Person at the Annual
Meeting.
All stockholders may
vote in person at the Annual Meeting. You may also be represented
by another person at the meeting by executing a proper proxy
designating that person.
If
you are a beneficial owner because your shares are held in a stock
brokerage account or by a bank or other nominee, to vote your
shares you must direct your broker, bank or nominee how to vote
your shares by using the voting instructions included in the
mailing you received, or attend the Annual Meeting by following the
directions below under “Who Can Attend the Annual
Meeting?”
What can I do if I change my mind after I vote my
shares?
If
you are a stockholder of record, you may revoke your proxy at any
time before it is voted at the Annual Meeting by:
●
sending
written notice of revocation to our Corporate
Secretary;
●
submitting
a new, proper proxy by mail (not by Internet or phone) after the
date of the revoked proxy; or
●
attending
the Annual Meeting and voting in person.
If
you are a beneficial owner of shares, you may submit new voting
instructions by contacting your broker, bank or
nominee.
When is the record date for the Annual Meeting?
The Board has fixed the record date for the Annual
Meeting as of the close of business on
April 16, 2018
.
How many votes can be cast by all stockholders?
There
were 1,453,637 shares of our common stock outstanding on the record
date and entitled to vote at the Annual Meeting. Each share of
common stock is entitled to one vote on each matter.
What constitutes a quorum?
A
majority of the outstanding shares present or represented by proxy,
or 726,819 shares, constitutes a quorum for the purpose of adopting
proposals at the Annual Meeting. If you submit a properly executed
proxy, then you will be considered part of the quorum.
2
What vote is required to approve each item?
For
the election of the directors, the six directors who receive the
greatest number of votes cast in person or by proxy will be elected
directors.
The
ratification of
Cherry Bekaert LLP as our independent registered
public accounting firm requires approval by a majority of the total
votes cast in person or by proxy. Although ratification is not
required by our bylaws or otherwise, the Board is submitting the
selection of Cherry Bekaert LLP to our stockholders for
ratification as a matter of good corporate practice. If our
stockholders do not ratify the appointment, the Audit and
Compliance Committee will reconsider whether or not to retain
Cherry Bekaert LLP but still may retain them. Even if the selection
is ratified, the Audit and Compliance Committee may change the
appointment at any time during the year if it determines that such
change would be in the best interests of us and our
stockholders.
If
there are insufficient votes to approve the proposals, your proxy
may be voted by the persons named in the proxy to adjourn the
Annual Meeting in order to solicit additional proxies in favor of
the approval of such proposals. If the Annual Meeting is adjourned
or postponed for any purpose, at any subsequent reconvening of the
Annual Meeting your proxy will be voted in the same manner as it
would have been voted at the original convening of the Annual
Meeting unless you withdraw or revoke your proxy. Your proxy may be
voted in this manner even though it may have been voted on the same
or any other matter at a previous session of the Annual
Meeting.
Who can attend the Annual Meeting?
All
stockholders as of
April 16,
2018
may attend the Annual Meeting. If you are listed as
stockholder of record you may attend the Annual Meeting if you
bring proof of identification. If you are the beneficial owner of
shares held in street name, you will need to bring proof of
identification and provide proof of ownership by bringing either a
copy of a brokerage statement or a letter from the record holder
indicating that you owned the shares as of
April 16, 2018
.
What does it mean if I receive more than one proxy card or voting
instruction form?
It
means that you have multiple accounts at the transfer agent or with
brokers. Please complete and return all proxy cards or voting
instruction forms to ensure that all of your shares are
voted.
Where can I find more information about Tenax
Therapeutics?
We file
periodic reports with the Securities and Exchange Commission (the
“SEC”) pursuant to Section 13(a) of the Securities
Exchange Act of 1934. Our SEC filings are available from the
SEC’s Internet site at http://www.sec.gov, which contains
reports and other information regarding issuers that file
electronically. Our filings with the SEC are available without
charge on our website (http://www.tenaxthera.com) as soon as
reasonably practicable after filing. Further, the reports filed
with the SEC may be inspected without charge at the SEC’s
Public Reference Room at 100 F Street N.E., Washington, D.C. 20549.
Please call the SEC at (800) 732-0330 for further information on
the Public Reference Room.
Who can help answer my questions about the Annual Meeting or how to
submit or revoke my proxy?
If you
are the stockholder of record, please contact:
Tenax
Therapeutics, Inc.
Attn:
Investor Relations
ONE
Copley Parkway, Suite 490
Morrisville, NC
27560
Telephone: (919)
855-2100
If your
shares are held in street name, please call the telephone number
provided on your voting instruction form or contact your broker
directly.
3
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees for Election as Directors
All six
of the persons nominated for election to the Board of Directors at
the Annual Meeting are currently serving as our directors. We are
not aware of any nominee who will be unable or will decline to
serve as a director. If a nominee becomes unable or declines to
serve, the Board will either select a substitute nominee or reduce
the size of the Board. If you have submitted a proxy and a
substitute nominee is selected, your shares will be voted for
election of the substitute nominee, if any, designated by the Board
of Directors. The term of office of each person elected as a
director will continue
until the
sooner of the 2019 Annual Meeting of Stockholders
or the
election and qualification of their successors.
The
following table lists the nominees for election and information
about each as of
April 20,
2018
:
|
Name
|
|
Age
|
|
Position with Tenax Therapeutics,
Inc.
|
|
Director Since
|
|
Ronald R. Blanck, DO
|
|
76
|
|
Chairman
|
|
December 2009
|
|
Anthony A. DiTonno
|
|
69
|
|
Director
|
|
December 2011
|
|
James Mitchum
|
|
65
|
|
Director
|
|
September 2015
|
|
Gregory Pepin
|
|
35
|
|
Director
|
|
August 2009
|
|
Gerald T. Proehl
|
|
59
|
|
Director
|
|
April 2014
|
|
Chris A. Rallis
|
|
64
|
|
Director
|
|
December 2011
|
Ronald R. Blanck, DO
has served as a director since December 2009 and as Chairman since
September 2011. Dr. Blanck has served as chairman of Martin, Blanck
& Associates, a federal health services consulting firm based
in Falls Church, VA since August 2006. Dr. Blanck has also served
as director and chairman of Pyng Medical Corp, a medical device
company, since July 2012 and as chairman of VetFed Resources, Inc.,
a health solutions provider, since July 2015. He began his military
career in 1968 as a medical officer and battalion surgeon in
Vietnam, retiring 32 years later as a Lieutenant General and
Surgeon General of the U.S. Army and commander of the U.S. Army
Medical Command. He also served as commander of Walter Reed Medical
Center and the North Atlantic Region Medical Command. His
background also includes serving as president of the University of
North Texas Health Science Center at Fort Worth, chair of the Board
of Regents of Uniformed Services University and chair of the
Education Commission on Foreign Medical Graduates. Dr. Blanck has
also been recognized as a Master of the American College of
Physicians.
We
believe Dr. Blanck’s extensive medical background and
treatment of critical care patients qualify him to serve on our
Board and his many leadership positions throughout his military
career qualify him to serve as our Chairman of the
Board.
Dr.
Blanck serves as a member of the Corporate Governance and
Nominating Committee and the Audit and Compliance
Committee.
Anthony A. DiTonno
has served as a
director since December 2011. Since January 2013, Mr. DiTonno has
served as Chief Executive Officer of Avantis Medical Systems, Inc.,
a medical device company that develops and manufactures
catheter-based endoscopic devices. From April 2003 until
December 2011, Mr. DiTonno was President and Chief Executive
Officer of Neurogesx Inc., a biopharmaceutical company based in the
San Francisco Bay area (“Neurogesx”). During his time
at Neurogesx, Mr. DiTonno also served on its board of
directors. Mr. DiTonno has funded companies through a
variety of financial arrangements including private and public
financings, partnerships and debt. He has also been successful in
gaining regulatory approvals in both the United States and European
Union. Previously, he was Executive Vice President of Marketing and
Sales at Enteric Medical Technologies Inc., which was acquired by
Boston Scientific Company; President and Chief Executive Officer of
Lifesleep Systems, Inc.; and Vice President and General Manager of
Olcassen Pharmaceuticals, which was sold to Watson Laboratories.
Early in his career, he held a variety of positions of increasing
responsibility at Rorer Group, Inc. (Rhône Poulenc Rorer) and
Wyeth Laboratories. Mr. DiTonno received an M.B.A. from Drexel
University and a B.S. in Business Administration from St.
Joseph’s University.
We
believe that Mr. DiTonno’s extensive corporate experience and
financial background qualify him to serve on our Board and provides
valuable insight to the Company.
Mr.
DiTonno serves as chair of the Compensation Committee.
4
James Mitchum
has
served as a director since September 2015. Mr. Mitchum
has served as the Chief Executive Officer of Heart to Heart
International, a non-profit international humanitarian
organization, since September 2014. From March 2009 to
July 2012, Mr. Mitchum served as President of the Americas for EUSA
Pharma, Inc., where he oversaw the streamlining of that business as
well as the development, FDA approval and successful launch of a
pediatric oncology drug in 2011. From 2005 to 2008, Mr. Mitchum
served as President and Chief Executive Officer of Enturia, Inc., a
privately owned drug-device company, based in Kansas City. From
2003 to 2005, Mr. Mitchum served as the President and Chief
Executive Officer of Sanofi-Aventis Group Japan and was Chief
Executive for Aventis Pharma UK from 2000 through 2002. He served
in many senior financial roles from 1985 until 1999 with HMR and
predecessor companies and was the Corporate Controller for HMR from
1997 until 2000. Mr. Mitchum currently serves as a
director for NephroGenex Inc., a publicly traded company developing
drugs to treat kidney disease. Mr. Mitchum has also served as
a director on numerous private company and organization
boards. Mr. Mitchum earned an MBA in Business from the
University of Tennessee in Knoxville, Tennessee and a Bachelor of
Science degree in Business and Math from Milligan College in
Johnson City, Tennessee.
We
believe that Mr. Mitchum’s experience in managing companies
in the life sciences industry, as well as his financial and
operational expertise, qualify him to serve on our
Board.
Mr.
Mitchum serves as chair of the Audit and Compliance
Committee.
Gregory Pepin
has
served as a director since August 2009. Since August 2017, Mr.
Pepin has served as executive manager at Deltec Bank and Trust and
fund manager for Hades Investment Ltd. From October 2013 until
August 2017, Mr. Pepin served as an independent financial
consultant and managing director for Cedrus Capital LLC, an
investment and business strategy consulting firm, primarily for
foreign clients. From December 2011 until September 2013, Mr. Pepin
served as managing director of FGP Capital France
(“FGP”), a business strategy consulting firm. In May
2010, he co-founded EOS Investment, Ltd. (“EOS”), an
investment company based in the Cayman Islands, which serves as
investment manager of Vatea Fund, a stakeholder in the Company, and
as investment manager and managing director of OXBT Fund, one of
our principal stockholders. EOS serves as the investment manager
and the managing director for two other funds that are not
affiliated with us. In May 2010, Mr. Pepin also co-founded
Independent Wealth Management, SA, an investment management company
based in Switzerland, and he served as a financial analyst for the
company until December 2011. From July 2008 until April 2010, he
was engaged as a Senior Vice President at Melixia SA
(“Melixia”), an investment management company based in
Switzerland. During his time at Melixia, Mr. Pepin’s primary
responsibility was to oversee the formation of Vatea Fund. After
establishing Vatea Fund, Mr. Pepin left Melixia, but has continued
to serve as a Managing Director of Vatea Fund since June 2009. From
September 2005 through the end of June 2008, Mr. Pepin was employed
as a consultant in finance and insurance by Winter & Associates
located in Paris, France. In July 2005, Mr. Pepin earned the degree
of Master of Science and Economy, Finance and Actuaries, from HEC
Lausanne. Mr. Pepin also currently serves on the board of directors
of Theravectys S.A., a development-stage biotechnology company
headquartered in France.
We
believe that Mr. Pepin’s investment management experience and
skills qualify him to serve on our Board, and provide the Board
with valuable insight into the investment community.
Mr.
Pepin serves as a member of the Compensation Committee and of the
Corporate Governance and Nominating Committee.
Gerald T.
Proehl
has
served as a director since April 2014. Currently, Mr. Proehl is a
Founder, President, CEO and Director of Dermata Therapeutics, LLC,
a private biotechnology company. From January 2002 to January 2014,
Mr. Proehl was the President, Chief Executive Officer and a
Director of Santarus, Inc. (“Santarus”), a company that
he helped to found in 1999. From March 2000 through
December 2001, Mr. Proehl was President and Chief Operating Officer
of Santarus, and from April 1999 to March 2000, Mr. Proehl was Vice
President, Marketing and Business Development of
Santarus. Mr. Proehl helped lead the sale of Santarus to
Salix Pharmaceuticals for $2.6 billion in January of
2014. Prior to joining Santarus, Mr. Proehl was with HMR
for 14 years where he served in various capacities, including Vice
President of Global Marketing. During his career at HMR he worked
across numerous therapeutic areas, including CNS, cardiovascular,
and gastrointestinal. Mr. Proehl currently serves on the
board of directors of Sophiris Bio Inc., a publicly traded company
developing a late-stage, targeted treatment for benign prostatic
hyperplasia, and Ritter Pharmaceuticals, Inc., a publicly traded
company developing therapeutic products that modulate the human gut
microbiome to treat gastrointestinal diseases. Mr.
Proehl also serves on a number of private company boards including
Kinetek Sports, Inc., Patara Pharma, LLC, MDRejuvena, Inc. and
Precision IBD, Inc. Mr. Proehl holds a B.S. in education
from the State University of New York at Cortland, an M.A. in
exercise physiology from Wake Forest University and an M.B.A. from
Rockhurst University.
We
believe that Mr. Proehl’s general business and commercial
experience in the pharmaceutical industry, as well as his strong
background in business operations developed through his leadership
at other companies, qualify him to serve on our Board.
Mr.
Proehl serves as chair of the Corporate Governance and Nominating
Committee and as a member of the Compensation
Committee.
Chris A. Rallis
has
served as a director since December 2011. Since January 2008, Mr.
Rallis has served as an Executive-in-Residence at Pappas Ventures,
a life science venture capital firm based in Durham, NC. From April
2006 until June 2007, he was President and Chief Executive Officer
of ImmunoBiosciences, Inc., a vaccine technology company formerly
located in Raleigh, NC. He has served as a consultant for Duke
University and Panacos Pharmaceuticals, Inc., and is the former
President and Chief Operating Officer of Triangle Pharmaceuticals,
Inc. (“Triangle”), which was acquired by Gilead
Sciences in January 2003 for approximately $465 million. While at
Triangle, he participated in 11 equity financings generating gross
proceeds of approximately $500 million. He was also primarily
responsible for all business development activities which included
a worldwide alliance with Abbott Laboratories and the in-licensing
of 10 compounds. Earlier, he served in various business development
and legal management roles with Burroughs Wellcome, Co. Mr. Rallis
serves on the boards of Aeolus Pharmaceuticals and Fennec
Pharmaceuticals (formerly Adherex Technologies) and chairs the
audit committee of both boards, both of which are publicly traded
companies. He received his A.B. degree in economics from Harvard
College and a J.D. from Duke University.
5
We
believe that Mr. Rallis’ strong background in raising
capital, business development and operations developed through his
leadership at other companies operating within the biomedical
industry qualifies him to serve on our Board.
Mr.
Rallis serves as a member of the Audit and Compliance
Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
ELECTION OF EACH OF THE DIRECTOR NOMINEES.
CORPORATE GOVERNANCE MATTERS
Code of Ethics
We have
adopted a Code of Ethics applicable to all of our officers,
directors and employees, including our principal executive officer,
principal financial officer, principal accounting officer,
controller, or persons performing similar functions. A copy of this
code of conduct is posted on our website at
http://investors.tenaxthera.com/TENX/corporate_governance.
In the event the code of conduct is revised, or any waiver is
granted under the Code of Ethics with respect to our principal
executive officer, principal financial officer, principal
accounting officer, controller, or persons performing similar
functions, notice of such revision or waiver will be posted on our
website or disclosed on a current report on Form 8-K as
required.
Board Composition and Independence of Directors
Our
Board of Directors currently has six members. Dr. Ronald R. Blanck
is our Chairman and Anthony A. DiTonno, James Mitchum, Gregory
Pepin, Gerald T. Proehl and Chris A. Rallis are
directors.
In
accordance with the listing rules of The Nasdaq Stock Market LLC
(“Nasdaq”), our Board of Directors must consist of a
majority of “independent directors,” as determined in
accordance with Nasdaq Rule 5605(a)(2). The Board has determined
that
current directors
Messrs.
Blanck, DiTonno, Mitchum, Pepin, Proehl and Rallis are independent
directors in accordance with applicable Nasdaq listing rules. The
Board performed a review to determine the independence of the
director nominees and made a subjective determination as to each of
these independent director nominees that no transactions,
relationships, or arrangements exist that, in the opinion of the
Board, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director of the Company. In
making these determinations, the Board reviewed the information
provided by the director nominees with regard to each
individual’s business and personal activities as they may
relate to us and our management.
Attendance at Meetings
The
Board met 7 times during the year ended December 31, 2017
(“Fiscal 2017”), and each of our directors attended at
least 75% of the aggregate of the total number of board meetings
held during the period each has been a director and the total
number of meetings held by all committees on which each director
then served. From time to time the Board also acted through written
consents. We have no formal policy requiring director attendance at
the Annual Meeting, although all directors are expected to attend
the Annual Meeting if they are able to do so. All six directors of
the Company who were members of the Board at the time of the Annual
Meeting in 2017 attended the 2017 Annual Meeting.
Board Leadership Structure
The
Board recognizes that one of its key responsibilities is to
evaluate and determine its optimal leadership structure so as to
provide independent oversight of management. The Board understands
that there is no single, generally accepted approach to providing
Board leadership and that given the dynamic and competitive
environment in which we operate, the right Board leadership
structure may vary as circumstances warrant. Consistent with this
understanding, the independent Directors consider the Board’s
leadership structure on an annual basis. This consideration
includes the pros and cons of alternative leadership structures in
light of our operating and governance environment at the time, with
the goal of achieving the optimal model for effective oversight of
management by the Board.
Currently, Mr.
Jebsen serves as our Interim Chief Executive Officer and Dr.
Blanck, who has been a member of our Board of Directors since
December 2009, serves as our Chairman of the Board. Based on the
Board’s most recent review of our Board leadership structure,
the Board has determined that this leadership structure is optimal
for the Company because it allows Mr. Jebsen to focus on leading
our business and operations and carrying out our strategy, and Dr.
Blanck, our Chairman of the Board, to focus on leading our
Board’s oversight of our strategy and business.
In
considering its leadership structure, the Board has taken a number
of factors into account. The Board, which consists of highly
qualified and experienced directors, a majority of whom are
independent, exercises a strong, independent oversight function.
This oversight function is enhanced by the fact that all of the
Board’s three key Committees—Audit and Compliance,
Compensation, and Corporate Governance and Nominating—are
comprised entirely of independent directors. A number of Board and
Committee processes and procedures, including regular executive
sessions of directors, periodic executive sessions of the
independent directors, and annual evaluations of our Chief
Executive Officer’s performance against pre-determined goals,
provide substantial independent oversight of our Chief Executive
Officer’s performance. The Board believes that these factors
provide the appropriate balance between the authority of those who
oversee the Company and those who manage it on a day-to-day
basis.
6
Board’s Role in Risk Oversight
We
operate in a highly complex and regulated industry and are subject
to a number of significant risks. The Board plays a key role with
respect to our risk oversight, such as determining whether and
under what circumstances we will engage in financing transactions
or enter into strategic alliances and collaborations. The Board is
also involved in our management of risks related to our financial
condition or to the development and commercialization of our
product candidates.
One of
the Board’s risk oversight roles is to provide guidance to
management. The Board receives regular business updates from
members of senior management in order to identify matters that
involve operational, financial, legal or regulatory
risks.
To
facilitate its oversight of the Company, the Board of Directors has
delegated certain functions (including the oversight of risks
related to these functions) to Board committees. The Audit and
Compliance Committee reviews and discusses with management our
major financial risk exposures and the steps management has taken
to monitor and control such exposures, the Compensation Committee
evaluates the risks presented by our compensation programs and
analyzes these risks when making compensation decisions, and the
Corporate Governance and Nominating Committee evaluates whether the
composition of the Board is appropriate to respond to the risks
that we face. The roles of these committees are discussed in more
detail below.
Although the Board
of Directors has delegated certain functions to various committees,
each of these committees regularly reports to and solicits input
from the full Board regarding its activities.
Standing Committees
Our
Board of Directors has three standing committees: the Audit and
Compliance Committee, the Compensation Committee, and the Corporate
Governance and Nominating Committee. Copies of the charters of the
Audit and Compliance, Compensation, and Corporate Governance and
Nominating Committees, as they may be amended from time to time,
are available on our website at
http://www.tenaxthera.com.
The
Board has determined that all of the members of each of the Audit
and Compliance, Compensation, and Corporate Governance and
Nominating Committees are independent as defined under Nasdaq
rules, and, in the case of all members of the Audit and Compliance
Committee, that they meet the additional independence requirements
of Rule 10A-3 under the Securities Exchange Act of
1934.
Audit and Compliance
Committee
.
The
Audit and Compliance Committee’s principal responsibilities
include:
●
overseeing the
accounting and financial reporting processes of the Company and
audits of our financial statements;
●
acting on behalf of
the Board in providing oversight with respect to (i) the quality
and integrity of our financial statements and internal accounting
and financial controls; (ii) all audit, review and attest services
relating to our financial statements and internal control over
financial reporting (collectively, “Audit Services”),
including the appointment, compensation, retention and oversight of
the work of the independent auditors engaged to provide Audit
Services to us; and (iii) our compliance with legal and regulatory
requirements;
●
reporting to the
Board on such matters as the Audit and Compliance Committee deems
necessary or appropriate to assure that the Board is informed of
any significant developments within the scope of the Audit and
Compliance Committee’s responsibilities that merit the
attention of the Board;
●
providing the
report required of the Audit and Compliance Committee by the rules
of the SEC for inclusion in our annual proxy
statement;
●
conducting review
and oversight of any related person transactions, other than
related person transactions for which the Board has delegated
review to another independent body of the Board;
and
●
fulfilling such
other responsibilities as may be required of the Audit and
Compliance Committee under applicable laws and
regulations.
The
members of the Audit and Compliance Committee are Messrs. Mitchum
and Rallis and Dr. Blanck. Mr. Mitchum serves as chair of the Audit
and Compliance Committee. The Board of Directors has determined
that Messrs. Mitchum and Rallis and Dr. Blanck each qualify as an
“audit committee financial expert” as defined by
applicable SEC rules. The Audit and Compliance Committee met 4
times during Fiscal 2017.
7
Compensation Committee.
The
Compensation Committee’s primary responsibilities
include:
●
assisting the Board
in discharging its overall responsibility relating to executive
officer and director compensation and overseeing and reporting to
the Board as appropriate on our compensation and benefit policies,
programs and plans, including our stock-based compensation
programs;
●
approving the
compensation of all executive officers and recommending
compensation for non-employee directors;
●
engaging and
evaluating any compensation consultants, independent counsel and
other advisers used to assist in the evaluation of director or
executive compensation, including evaluation of the advisors’
independence in advance of engagement
;
●
reviewing our
succession and development plans for executive officers and other
members of senior management; and
●
preparing an annual
report on executive compensation for inclusion in our proxy
statement, if required by applicable laws.
The
members of the Compensation Committee are Messrs. DiTonno, Pepin
and Proehl. Mr. DiTonno serves as chair of the Compensation
Committee. The Compensation Committee met 1 time during Fiscal
2017.
Corporate Governance and Nominating Committee.
The
Corporate Governance and Nominating Committee’s primary
responsibilities include:
●
identifying
individuals qualified to become directors and recommending that the
Board select the candidates for all directorships to be filled by
the Board or by the stockholders;
●
upon the
recommendation of the Compensation Committee, determining
compensation arrangements for non-employee directors;
●
developing and
recommending to the Board corporate governance principles for the
Company; and
●
otherwise taking a
leadership role in shaping the corporate governance of the
Company
.
The
members of the Corporate Governance and Nominating Committee are
Messrs. Proehl and Pepin and Dr. Blanck. Mr. Proehl serves as chair
of the Corporate Governance and Nominating Committee. The Corporate
Governance and Nominating Committee met one time during Fiscal
2017.
Processes and Procedures for Executive and Director
Compensation
The
Compensation Committee has the authority to determine and approve
the compensation of the Chief Executive Officer and all other
executive officers. The Corporate Governance and Nominating
Committee has authority to determine and approve all matters
pertaining to compensation of our directors. In making its
determination with respect to the compensation of the Chief
Executive Officer, the Compensation Committee considers, among
other things, the Chief Executive Officer’s performance in
light of established corporate goals and objectives. In making its
determination with respect to the compensation of other executive
officers, the Compensation Committee takes into account, among
other things, each executive officer’s performance in light
of established goals and objectives as well as the recommendations
of the Chief Executive Officer. The Chief Executive Officer has no
input and may not be present during voting or deliberations about
his compensation. In addition, the Compensation Committee has
engaged Arnosti Consulting, Inc. (“Arnosti
Consulting”), an independent executive compensation
consultant, to provide advice to it regarding the compensation of
our executive officers. Arnosti Consulting focuses on executive
compensation and does not provide services other than those related
to executive compensation and benefits. In making its determination
with respect to director compensation, the Corporate Governance and
Nominating Committee considers, among other things, the
Compensation Committee’s recommendation, the Board’s
overall level of performance, the individual director’s
participation in committees, the compensation paid to other
director’s in similarly situated companies, and our financial
growth.
8
Our
Compensation Committee may delegate its authority to the chair of
the committee to the extent it deems necessary to finalize matters
as to which the committee has given its general
approval.
The
Compensation and Corporate Governance and Nominating Committees
have the authority to retain compensation consultants and other
outside advisors to assist in discharging their responsibilities.
The recommendations of such consultants are considered in
conjunction with the other considerations listed above. Our
Compensation Committee looks to Arnosti Consulting to analyze our
executive compensation structure and plan designs, and to assess
whether the compensation programs are competitive with the market
and support the Compensation Committee’s goal to align
stockholders’ interests with those of our executive officers.
To ensure Arnosti Consulting’s independence, Arnosti
Consulting reports directly to our Compensation Committee and works
specifically for the committee solely on compensation and
benefits.
Procedures for Director Nominations
Under the charter of the Corporate
Governance and Nominating Committee, the Committee is responsible
for
identifying from a wide field of candidates, including
women and minority candidates, and recommending that the Board
select qualified candidates for membership on the Board.
In evaluating the
suitability of individual director candidates, the Committee
takes into account such factors as it considers appropriate, which
may include (i) ensuring that the Board, as a whole, is diverse as
to race, gender, culture, thought and geography, such that the
Board reflects a range of viewpoints, backgrounds, skills,
experience and expertise, and consists of individuals with relevant
technical skills, industry knowledge and experience, financial
expertise and local or community ties; (ii) minimum individual
qualifications, including strength of character, mature judgment,
relevant career experience, independence of thought and an ability
to work collegially; (iii) questions of independence, possible
conflicts of interest and whether a candidate has special interests
or a specific agenda that would impair his or her ability to
effectively represent the interests of all stockholders; (iv) the
extent to which the candidate would fill a present need on the
Board; and (v) whether the candidate can make sufficient time
available to perform the duties of a director.
The Corporate
Governance and Nominating Committee implements and assesses the
effectiveness of these factors and the Board’s commitment to
diversity by considering these factors in our assessment of
potential director nominees and the overall make-up of our
Board.
In
determining whether to recommend a director for re-election, the
Committee will consider the director’s past attendance at
meetings and participation in and contributions to the activities
of the Board.
The
Corporate Governance and Nominating Committee does not set
specific, minimum qualifications that nominees must meet in order
to be recommended to the Board, but rather the Board believes that
each nominee should be evaluated based on his or her individual
merits, taking into account the needs of the Company and the
composition of the Board. The Corporate Governance and Nominating
Committee conducts appropriate inquiries into the backgrounds and
qualifications of possible nominees and investigates and reviews
each proposed nominee’s qualifications for service on the
Board. The Corporate Governance and Nominating Committee may engage
outside search firms to assist in identifying or evaluating
potential nominees.
The
Corporate Governance and Nominating Committee will consider
candidates recommended by stockholders. It is the policy of the
Corporate Governance and Nominating Committee that candidates
recommended by stockholders will be given appropriate consideration
in the same manner as other candidates. The procedure for
submitting candidates for consideration by the Corporate Governance
and Nominating Committee for election at our 2019 Annual Meeting is
described under “Other Matters—Stockholder
Proposals.”
Stockholder Communications with Directors
It is
the policy of the Company and the Board to encourage free and open
communication between stockholders and the Board. Any stockholder
wishing to communicate with the Board should send any communication
to Tenax Therapeutics, Inc., Attn: Corporate Secretary, ONE Copley
Parkway, Suite 490, Morrisville, North Carolina 27560. Any such
communication must be in writing and must state the number of
shares beneficially owned by the stockholder making the
communication. Our Corporate Secretary will forward such
communication to the full Board or to any individual director or
directors to whom the communication is directed unless the
communication is unduly hostile, threatening, illegal, or similarly
inappropriate, in which case the Corporate Secretary has the
authority to discard the communication or take appropriate legal
action regarding the communication. This policy is not designed to
preclude other communications between the Board and stockholders on
an informal basis.
9
AUDIT COMMITTEE REPORT
The
Audit and Compliance Committee has reviewed our audited financial
statements for the year ended December 31, 2017 and has discussed
these statements with management. The Audit and Compliance
Committee has also discussed with Cherry Bekaert LLP, our
independent registered public accounting firm during the year ended
December 31, 2017, the matters required to be discussed by the
Public Company Accounting Oversight Board Auditing Standard No.
1301, Communications with Audit Committees.
The
Audit and Compliance Committee also received from Cherry Bekaert
LLP the written disclosures and the letter required by applicable
requirements of the Public Company Accounting Oversight Board
regarding Cherry Bekaert LLP’s communications with the Audit
and Compliance Committee concerning independence and discussed with
Cherry Bekaert LLP its independence.
Based
on the review and discussions noted above, the Audit and Compliance
Committee recommended to the Board that the audited financial
statements be included in our Annual Report on Form 10-K for the
year ended December 31, 2017, for filing with the SEC.
With
respect to the above matters, the Audit and Compliance Committee
submits this report.
James
Mitchum
Chris
A. Rallis
Ronald
R. Blanck
10
MANAGEMENT
The names and ages of our executive officers as of
April 20, 2018 are listed below. Our executive officers are
appointed by our Board of Directors to hold office until their
successors are
duly appointed and qualified, or until their
resignation, retirement, death, removal, or
disqualification
.
The
information appearing below and certain information regarding
beneficial ownership of securities by certain executive officers
contained in this proxy statement has been furnished to us by the
executive officers.
|
Name
|
|
Age
|
|
Position
|
|
Michael
B. Jebsen, CPA
|
|
46
|
|
President, Interim Chief Executive Officer and Chief Financial
Officer
|
Michael B.
Jebsen
joined the Company as
our Accounting Manager in April 2009, and was elected Chief
Financial Officer, Executive Vice President Finance and
Administration in August 2009 and was appointed as Interim Chief
Executive Officer on April 3, 2017. Mr. Jebsen also served as our
Interim Chief Executive Officer from August 2011 until November
2013. Before joining us, he was an auditor with Grant Thornton, LLP
from July 2003 through December 2005 and from April 2008 through
April 2009. In addition, he held various positions, including Chief
Ethics Officer, Senior Internal Auditor, and Senior Financial
Analyst with RTI International, a non-profit research and
development organization, from January 2006 to February 2008. Mr.
Jebsen holds a Master of Science in Accounting from East Carolina
University and is a Certified Public Accountant, licensed in North
Carolina.
EXECUTIVE COMPENSATION
The
following tables and narrative discussion summarize the
compensation we paid for services in all capacities rendered to us
during the years ended December 31, 2017 and 2016 by our principal
executive officer and all other “Named Executive
Officers” during Fiscal 2017.
We
had no other executive officers during any part of
Fiscal
2017
.
Summary Compensation Table
|
Name and Principal Position
|
|
Year
|
Salary
($)
|
Bonus ($)
|
Stock
Awards
(1)
($)
|
Option
Awards
(1)
($)
|
Non-Equity Incentive
Plan
(2)
($)
|
All Other
Compensation
(3)
($)
|
Total ($) |
|
John
P. Kelley
|
|
2017
|
122,388
|
—
|
—
|
—
|
—
|
512,171
|
634,559
|
|
Former Chief Executive
Officer
(4)
|
|
2016
|
430,000
|
—
|
—
|
373,068
|
290,250
(5)
|
—
|
1,093,318
|
|
Michael
B. Jebsen, CPA
|
|
2017
|
420,417
|
—
|
—
|
92,563
|
82,875
|
—
|
595,855
|
|
President, Interim Chief
Executive Officer and Chief Financial Officer
(6)
|
|
2016
|
325,000
|
—
|
—
|
233,168
|
146,250
|
—
|
704,418
|
(1)
The amounts in
these columns reflect the aggregate grant date fair value of awards
granted during the year computed in accordance with Financial
Accounting Standards Board ASC Topic 718, Compensation —
Stock Compensation. The assumptions made in determining the fair
values of our stock and option awards are set forth in Note E to
our Financial Statements included in our Form 10-K for Fiscal 2017,
filed with the SEC on April 2, 2018.
(2)
These payments were
made based on achievement of annual goals in accordance with each
of Mr. Kelley’s and Mr. Jebsen’s employment agreement,
which is described below in the section entitled
“—Employment and other
Contracts.”
(3)
The amounts in this
column represent payments for severance upon Mr. Kelley’s
resignation on April 3, 2017, paid in accordance with the terms of
Mr. Kelley’s separation and general release agreement, which
is described below in the section entitled “—Employment
and other Contracts.”
(4)
On April 3, 2017,
Mr. Kelley resigned as our Chief Executive Officer and as a
director.
(5)
$145,125, or 50%,
of this payment was settled by a grant of 10,671 shares of common
stock, with the remainder of $145,125 paid in cash.
(6)
Mr. Jebsen
currently serves as our Interim Chief Executive Officer. In
connection with such service, Mr. Jebsen receives additional
compensation of $10,000 per month. Mr. Jebsen’s salary for
Fiscal 2017 reflects the additional compensation he received during
the portion of Fiscal 2017 in which he served as our Interim Chief
Executive Officer.
11
Narrative to Summary Compensation Table
Elements of Compensation
During
Fiscal 2017, we compensated our Named Executive Officers generally
through a mix of (i) base salary, (ii) annual cash bonus based on
achievement of predetermined operational goals and (iii) long-term
equity compensation, in the form of options or restricted common
stock.
Annual Base Salaries
The
Named Executive Officers receive a base salary to compensate them
for services rendered to us. The base salary payable to each Named
Executive Officer is intended to provide a fixed component of
compensation reflecting the executive’s skill set,
experience, role and responsibilities. In 2017, we paid an annual
base salary of $331,500 to Mr. Jebsen, and Mr. Kelley was set to
receive an annual base salary of $430,000 prior to his resignation.
In connection with Mr. Jebsen’s appointment as Interim Chief
Executive Officer on April 3, 2017, we also agreed to pay Mr.
Jebsen additional compensation of $10,000 per month for each month
that he serves as Interim Chief Executive Officer. For information
on the amounts received by Mr. Kelley upon his resignation from the
Company in Fiscal 2017, see the section under the caption
“—Employment and other Contracts”
below.
Cash Bonuses
Under
each of their employment agreements, each of our Named Executive
Officers were eligible to receive annual cash bonuses based on
achievement of annual goals. During Fiscal 2017, Mr. Kelley and Mr.
Jebsen were eligible to receive a target cash bonus consisting of
75% and 50%, respectively, of their base salaries, based on 100%
achievement of the predetermined operational goals. There is no cap
on the bonuses for greater than 100% achievement of goals, and
there is no pre-identified threshold amount that must be achieved
to receive any cash bonus payment. Our Compensation Committee
evaluated performance for Fiscal 2017 and determined that Mr.
Jebsen would receive 50% of his target cash bonus. For information
on the amounts received by Mr. Kelley upon his resignation from the
Company in Fiscal 2017, see the section under the caption
“—Employment and other Contracts”
below.
Long-Term Equity Compensation
We
award stock options to our key employees, including to our
non-executive employees, on an annual basis and subject to approval
by the Compensation Committee. In connection with Mr.
Jebsen’s appointment as Interim Chief Executive Officer on
April 3, 2017, we also agreed to grant Mr. Jebsen an additional
option to purchase 10,000 shares of common stock.
Other Elements of Compensation
Employee Benefits and Perquisites
We
maintain broad based benefits that are provided to all employees,
including health and dental insurance. Our executive officers are
eligible to participate in all of our employee benefit plans, in
each case, on the same basis as other employees.
No Tax Gross-Ups
We do
not make gross-up payments to cover our Named Executive
Officers’ personal income taxes that may pertain to any of
the compensation or perquisites paid or provided by
us.
Severance and Change-of-Control Benefits
Pursuant to
employment agreements we have entered into with the Named Executive
Officers, each such officer is entitled to specified benefits in
the event of the termination of his employment under specified
circumstances, including termination following a change in control
of the Company. We have provided more detailed information about
these benefits, along with estimates of their value under various
circumstances, under the caption “—Employment and other
Contracts” below.
12
Employment and other Contracts
John P. Kelley
In
connection with Mr. Kelley’s appointment as Chief Executive
Officer, we entered into an employment agreement with Mr. Kelley
effective as of November 13, 2013 (the “Kelley Employment
Agreement”). Under the Kelley Employment Agreement, Mr.
Kelley received an annual base salary of $330,000. Mr. Kelley also
received participation in medical insurance, dental insurance and
other benefit plans on the same basis as our other officers. Under
the Kelley Employment Agreement, Mr. Kelley also received an annual
cash bonus consisting of 50% of his base salary, based on 100%
achievement of annual goals (with no cap on the bonus for greater
than 100% achievement of goals). The Kelley Employment Agreement
also provided for the Kelley Contingent Option Award described
below.
On June
18, 2015, we entered into an amendment to the Kelley Employment
Agreement. The amendment to Mr. Kelley’s employment agreement
increased his base salary to $430,000 from $330,000, effective as
of May 1, 2015, and also increased his target annual cash bonus to
75% of his base salary, based on 100% achievement of annual goals
(with no cap on the bonus for greater than 100% achievement of
goals).
The
Kelley Employment Agreement was effective for a one-year term, and
automatically renewed for additional one-year terms, unless the
Kelley Employment Agreement was terminated in advance of renewal or
either party gave notice at least 90 days prior to the end of the
then current term of an intention not to renew.
Pursuant to the
Kelley Employment Agreement, Mr. Kelley received a one-time
non-statutory stock option grant of 44,662 shares of common stock
in April 2014, following stockholder approval of the amendment to
the 1999 Stock Plan to increase the amount of stock options
authorized for issuance under the 1999 Stock Plan to 200,000 shares
of common stock (the “Kelley Contingent Option
Award”).
On
April 3, 2017, Mr. Kelley resigned as our Chief Executive Officer
and as a director effective immediately. In connection with his
resignation, Mr. Kelley entered into a Separation and General
Release Agreement (the “Separation Agreement”), dated
April 7, 2017.
Under
the Separation Agreement, Mr. Kelley was entitled to receive
severance in an amount equal to one year of his current base annual
salary and a pro-rated amount of his annual bonus that would have
been received had 100% of his annual goals been achieved (less
applicable taxes and withholdings), payable in a lump sum on the
60th day following the date of his resignation in exchange for a
standard release of employment claims. We were also required to
reimburse COBRA premiums for coverage of Mr. Kelley and his
eligible dependents for up to 12 months. The Separation Agreement
also contains such confidentiality provisions and other terms and
conditions as are usual and customary for agreements of this type.
All of Mr. Kelley’s obligations under his Employee
Non-Disclosure, Inventions Assignment, and Competitive Business
Activities Agreement, dated November 13, 2013, regarding
confidentiality and proprietary information will
continue.
Pursuant to the
Separation Agreement, for the 12-month period following the date of
his resignation, Mr. Kelley agreed to provide consulting services
as may have been reasonably requested by us. We agreed to pay Mr.
Kelley a consulting rate of $500 per hour for all services provided
during the consulting period.
Michael B. Jebsen
Effective November
13, 2013, we entered into an amended and restated employment
agreement with Mr. Jebsen (the “Jebsen Employment
Agreement”). Under the Jebsen Employment Agreement, Mr.
Jebsen receives an annual base salary of $285,000. Mr. Jebsen also
receives participation in medical insurance, dental insurance and
other benefit plans on the same basis as our other officers. Under
the Jebsen Employment Agreement, Mr. Jebsen is also eligible to
receive an annual cash bonus consisting of 50% of his base salary,
based on 100% achievement of annual goals (with no cap on the bonus
for greater than 100% achievement of goals). The Jebsen Employment
Agreement also provides for the Jebsen Contingent Option Award
described below. In addition to the foregoing, Mr. Jebsen also
received a fixed monthly automobile allowance of $800 and annual
grants totaling 22 shares of restricted common stock, vesting over
a 12-month period, of which 9 shares will only vest so long as he
continues serving as our Treasurer.
On June
18, 2015, we entered into an amendment to the Jebsen Employment
Agreement. The amendment to Mr. Jebsen’s employment agreement
increased his base salary to $325,000 from $285,000, effective as
of May 1, 2015, while removing the fixed monthly automobile
allowance of $800.
The
Jebsen Employment Agreement was effective for a one-year term, and
automatically renews for additional one-year terms, unless the
Jebsen Employment Agreement is terminated in advance of renewal or
either party gives notice at least 90 days prior to the end of the
then current term of an intention not to renew. If Mr. Jebsen is
terminated without cause, if he terminates his employment for good
reason, or if we elect not to renew the Jebsen Employment
Agreement, Mr. Jebsen would be entitled to receive (i) one year of
base salary, (ii) a pro-rated amount of the annual bonus that he
would have received had 100% of goals been achieved, and (iii) one
year of COBRA reimbursements or benefits payments, as applicable.
Mr. Jebsen’s entitlement to these payments is conditioned
upon execution of a release of claims.
13
For
purposes of the Jebsen Employment Agreement: (i)
“cause” includes (a) a willful material breach of the
Employment Agreement by Mr. Jebsen, (b) material misappropriation
of the Company’s property, (c) material failure to comply
with the Company’s policies, (d) abuse of illegal drugs or
abuse of alcohol in a manner that interferes with the performance
of Mr. Jebsen’s duties, (e) dishonest or illegal action that
is materially detrimental to the Company, and (f) failure to
disclose material conflicts of interest, and (ii) “good
reason” includes (a) a material reduction in base salary, (b)
a material reduction of Mr. Jebsen’s authority, duties or
responsibility, (c) certain changes in geographic location of Mr.
Jebsen’s employment, or (d) a material breach of the Jebsen
Employment Agreement by us.
Pursuant to the
Jebsen Employment Agreement, Mr. Jebsen received a one-time
non-statutory stock option grant of 44,662 shares of common stock
in April 2014, following stockholder approval of the amendment to
the 1999 Stock Plan to increase the amount of stock options
authorized for issuance under the 1999 Stock Plan to 200,000 shares
of common stock (the “Jebsen Contingent Option
Award”).
On
March 21, 2011, we entered into an indemnification agreement with
Mr. Jebsen, which provides that in respect of acts or omissions
occurring prior to such time as Mr. Jebsen ceases to serve as our
officer Mr. Jebsen will receive (i) indemnification and advancement
of expenses to the extent provided under our Certificate of
Incorporation and to the fullest extent permitted by applicable law
and (ii) indemnification against any adverse tax consequences in
connection with prior option awards that may have been
non-compliant with Section 409A of the IRC.
On
April 3, 2017, the Board appointed Mr. Jebsen as our Interim Chief
Executive Officer, and he will continue to serve as our President
and Chief Financial Officer. In connection with Mr. Jebsen’s
appointment as Interim Chief Executive Officer, we have provided
Mr. Jebsen with additional compensation of $10,000 per month for
each month that he serves as Interim Chief Executive Officer. In
addition, Mr. Jebsen was granted, on the effective date of his
appointment as Interim Chief Executive Officer, a stock option to
purchase 10,000 shares of our common stock. The award will vest
over a four-year period, with 25% of the option award vesting on
the first four anniversaries of the grant date provided Mr. Jebsen
remains continuously employed with us through each anniversary,
however, the vesting of the stock option shall accelerate and
become fully vested upon the achievement of specified performance
goals.
Equity Awards
In
September 1999, our Board of Directors approved the 1999 Amended
Stock Plan, which provided for the granting of incentive and
nonstatutory stock options to employees and directors to purchase
up to 667 shares of our common stock. The 1999 Amended Stock Plan
was approved by stockholders on October 10, 2000. Options granted
under the 1999 Amended Stock Plan generally have vesting schedules
of up to four years and have expiration periods of generally ten
years. On June 17, 2008, our stockholders approved an amendment and
restatement to the 1999 Amended Stock Plan to increase the number
of shares of common stock available for awards under the plan from
667 to 2,000, to increase the maximum number of shares covered by
awards granted under the 1999 Amended Stock Plan to an eligible
participant from 667 to 834 shares, and to make additional
technical changes to update the plan. On September 30, 2011, our
stockholders approved an amendment to the 1999 Amended Stock Plan,
to increase the number of shares of common stock available for
awards under the plan from 2,000 to 15,000. On March 13, 2014, our
stockholders approved a second amendment to the 1999 Amended Stock
Plan, to increase the number of shares of common stock available
for awards under the plan from 15,000 to 200,000. On September 15,
2015, our stockholders approved a third amendment to the 1999
Amended Stock Plan, to increase the number of shares of common
stock available for awards under the plan from 200,000 to 250,000.
Persons eligible to receive grants under the 1999 Amended Stock
Plan consist of all of our employees, including executive officers
and non-employee directors. As of December 31, 2017 and 2016, we
had 188,744 and 236,706 outstanding options under the 1999 Amended
Stock Plan, respectively. As of December 31, 2017 and 2016, we had
0 and 12 outstanding shares of restricted stock under the 1999
Amended Stock Plan, respectively. As of December 31, 2017 and 2016,
there were 55,561 and 13,425 shares available for grant under the
1999 Amended Stock Plan, respectively.
On
June 16, 2016, our stockholders approved the 2016 Stock Incentive
Plan (the “2016 Plan”), which provides for the issuance
of up to 150,000 shares of common stock. Under the 2016 Plan, with
the approval of the Compensation Committee, the Company may grant
stock options, stock appreciation rights, restricted stock,
restricted stock units, performance shares, performance units,
cash-based awards or other stock-based awards. As of December 31,
2017, the Company had not issued any awards under the 2016 Plan and
there were 150,000 shares of common stock available for grant under
the 2016 Plan.
14
Outstanding Equity Awards
The
following table provides information about outstanding equity
awards held by the Named Executive Officers as of December 31,
2017.
Outstanding Equity Awards as of December 31, 2017
|
|
Option Awards
(1)
|
Stock
Awards
|
|||||
|
Name
and Principal Position
|
Number
of securities underlying unexercised options
(Exercisable)
(#)
|
Number
of securities underlying unexercised options
(Unexercisable)
(#)
|
Equity
incentive plan award: number of securities underlying unexercised
unearned options
(#)
|
Option
exercise price
($/Sh)
|
Option
expiration date
|
Number
of shares or units of stock that have not vested
(#)
|
Market
value of shares or units of stock that have not vested
($)
|
|
John
P. Kelley
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Former
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
B. Jebsen, CPA
|
2
|
—
|
—
|
2,460.00
|
7/20/2019
|
—
|
—
|
|
Interim
Chief Executive Officer, President and Chief Financial
Officer
|
9
|
—
|
—
|
2,340.00
|
8/12/2019
|
—
|
—
|
|
|
2
|
—
|
—
|
2,552.00
|
9/1/2019
|
—
|
—
|
|
|
2
|
—
|
—
|
2,340.00
|
10/1/2019
|
—
|
—
|
|
|
2
|
—
|
—
|
2,580.00
|
11/1/2019
|
—
|
—
|
|
|
2
|
—
|
—
|
2,232.00
|
12/1/2019
|
—
|
—
|
|
|
2
|
—
|
—
|
2,316.00
|
1/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
2,292.00
|
2/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
2,040.00
|
3/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
2,000.00
|
4/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
2,000.00
|
5/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
1,188.00
|
6/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
1,156.00
|
7/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
1,096.00
|
8/1/2020
|
—
|
—
|
|
|
9
|
—
|
—
|
1,116.00
|
8/13/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
1,216.00
|
9/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
1,012.00
|
10/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
844.00
|
11/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
860.00
|
12/1/2020
|
—
|
—
|
|
|
32
|
—
|
—
|
860.00
|
12/1/2020
|
—
|
—
|
|
|
2
|
—
|
—
|
768.00
|
1/1/2021
|
—
|
—
|
|
|
2
|
—
|
—
|
772.00
|
2/1/2021
|
—
|
—
|
|
|
2
|
—
|
—
|
772.00
|
3/1/2021
|
—
|
—
|
|
|
2
|
—
|
—
|
736.00
|
4/1/2021
|
—
|
—
|
|
|
22,331
(2)
|
—
|
22,331
(2)
|
113.00
|
4/2/2024
|
—
|
—
|
|
|
1,875
(2)
|
5,625
(3)
|
—
|
41.40
|
12/15/2026
|
—
|
—
|
|
|
—
|
10,000
(3)
|
—
|
11.20
|
4/3/2027
|
—
|
—
|
(1)
Except as otherwise
noted, the option awards reflected in these columns vested
immediately on the date of grant. The date of grant for each of
these options is the date 10 years prior to the expiration date
reflected in this table.
(2)
These options were
granted with the following vesting schedule: 25% on the (i)
Initiation of the Phase 3 Clinical Trial or (ii) the Company
attaining a Market Capitalization of at least $50,000,000; 25% on
the (i) Database Lock with respect to the Phase 3 Clinical Trial or
(ii) the Company attaining a Market Capitalization of at least
$100,000,000; 25% on the Acceptance For Review of an NDA for
levosimendan for low cardiac output syndrome (“LCOS”);
25% on the Approval of levosimendan for LCOS.
(3)
These options were
granted with the following vesting schedule: 25% on each
anniversary of the grant date.
15
Equity Compensation Plan Information
The
following table provides information about the securities
authorized for issuance under our equity compensation plans as of
December 31, 2017.
|
|
(a)
|
(b)
|
(c)
|
|
|
Number of securities
to be issued upon
exercise of outstanding
options, warrants
and rights
|
Weighted-average
exercise price of
outstanding options, warrants and rights
|
Number of securities
remaining available
for future issuances
under equity
compensation plans
(excluding securities
reflected in
column (a))
|
|
Plan category
|
|
|
|
|
Equity
compensation plans approved by security holders
|
188,744
|
$
95.24
|
205,561
(1)
|
|
Equity
compensation plans not approved by security holders
|
—
|
—
|
—
|
|
Total
|
188,744
|
$
95.24
|
205,561
|
|
(1)
|
Represents the number of shares available for future issuance under
stockholder approved equity compensation plans and consists of
55,561 shares available for future issuance under the 1999 Amended
Stock Plan and 150,000 shares available for future issuance under
the 2016 Plan. All of these shares are available for issuance as
restricted stock or other stock-based awards under the 1999 Amended
Stock Plan or 2016 Plan.
|
DIRECTOR COMPENSATION
The
following table summarizes the compensation paid to non-employee
directors for Fiscal 2017.
Fiscal 2017 Director Compensation
|
Director
|
Fees Earned or Paid in Cash
($)
|
Option Awards
($)
|
Stock Awards
($)
|
All Other Compensation
($)
|
Total
($)
|
|
Ronald R. Blanck,
DO
(1)
|
66,000
|
4,376
|
—
|
—
|
70,376
|
|
Anthony DiTonno
(1)
|
55,000
|
4,376
|
—
|
—
|
59,376
|
|
James Mitchum
(1)
|
60,000
|
4,376
|
—
|
—
|
64,376
|
|
Gregory Pepin
(1)
|
53,500
|
4,376
|
—
|
—
|
57,876
|
|
Gerald T. Proehl
(1)
|
57,000
|
4,376
|
—
|
—
|
61,376
|
|
Chris A. Rallis
(1)
|
52,500
|
4,376
|
—
|
—
|
56,876
|
|
(1)
|
As of December 31, 2017, our non-employee directors held the
following aggregate stock options: Dr. Blanck,
2,526
; Mr. DiTonno,
2,576
; Mr. Mitchum,
2,250
; Mr. Pepin,
2,000
; Mr. Proehl,
2,750
; and Mr. Rallis,
2,490
.
|
16
During
Fiscal 2017, all of our non-employee directors were paid the
following compensation for service on the Board and Board
Committees according to the policies established for director
compensation by the Corporate Governance and Nominating
Committee:
●
An
annual director fee in each fiscal year of $45,000 ($55,000 for our
Board chairman), which was paid in equal quarterly installments on
the first day of each fiscal quarter;
●
An
annual Audit and Compliance Committee member fee in each fiscal
year of $7,500 ($15,000 for our Audit and Compliance Committee
chairman), which was paid in equal quarterly installments on the
first day of each fiscal quarter;
●
An
annual Compensation Committee member fee in each fiscal year of
$5,000 ($10,000 for our Compensation Committee chairman), which was
paid in equal quarterly installments on the first day of each
fiscal quarter;
●
An
annual Nominating and Corporate Governance Committee member fee in
each fiscal year of $3,500 ($7,000 for our Nominating and Corporate
Governance Committee chairman), which was paid in equal quarterly
installments on the first day of each fiscal quarter;
●
An
annual grant of 500 stock options, which vest one year after the
grant date and are exercisable for a period of ten years;
and
●
Reimbursement
of travel and related expenses for attending Board and committee
meetings, as incurred.
In
addition to the compensation described above, Mr. Proehl and Mr.
Mitchum were each granted a 1,250 stock option award on their
initial nomination to the Board. The options vested one year after
the grant date and are exercisable for a period of ten years. We
shall maintain an appropriate director’s and officer’s
insurance policy at all times for our non-employee
directors.
Compensation Committee Interlocks and Insider
Participation
The
members of the Compensation Committee throughout Fiscal 2017 were
Messrs. DiTonno (Chair), Pepin and Proehl. None of the members
of the Compensation Committee has ever been an officer or employee
of the Company, and none of the members were parties to any related
party transaction with the Company during Fiscal 2017. None of our
executive officers serves, or has served during Fiscal 2017, as a
member of the board of directors, compensation committee or other
board committee performing equivalent functions of any entity that
has one or more executive officers serving as one of our directors
or on our Compensation Committee.
Compensation Policies and Practices as They Relate to Risk
Management
We have
reviewed our compensation policies and practices for all employees
and concluded that any risks arising from our policies and programs
are not reasonably likely to have a material adverse effect on the
Company.
17
OWNERSHIP OF SECURITIES
Principal Stockholders and Share Ownership by
Management
The following table sets forth, as of April
16
, 2018, the number and percentage of the
outstanding shares of common stock and warrants and options that,
according to the information supplied to us, were beneficially
owned by (i) each person who is currently a director or a director
nominee, (ii) our Named Executive Officers, (iii) all current
directors and executive officers as a group and (iv) each person
who, to our knowledge, is the beneficial owner of more than five
percent of the outstanding common stock. Except as otherwise
indicated, the persons named in the table have sole voting and
dispositive power with respect to all shares beneficially owned,
subject to community property laws where
applicable.
|
Beneficial Owner
Name and
Address
(1)
|
Amount and Nature of
Beneficial Ownership
(2)
|
Percent of Class
|
|
Principal Stockholders
|
|
|
|
JP SPC3 OXBT FUND
(3)
|
109,033
|
6.98
%
|
|
Rue
Du Mont-Blanc
Geneva,
Switzerland 1201
|
|
|
|
Doug
Randall
|
86,345
|
5.85
%
|
|
Douglas
Hay
|
76,467
|
5.18
%
|
|
John P. Kelley
(4)
|
64,147
|
4.41
%
|
|
Officers and Directors
|
|
|
|
Gregory Pepin
(5)
|
111,775
|
7.68
%
|
|
Michael B. Jebsen, CPA
(6)
|
36,608
|
2.48
%
|
|
Ronald R. Blanck, DO
(6)
|
3,845
|
*
|
|
James Mitchum
(6)
|
3,550
|
*
|
|
Anthony DiTonno
(6)
|
2,865
|
*
|
|
Chris A. Rallis
(6)
|
3,348
|
*
|
|
Gerald T. Proehl
(6)
|
4,245
|
*
|
|
All officers and directors as a group (7
persons)
(6)
|
166,236
|
10.39
%
|
* Less than 1%
|
(1)
|
Unless
otherwise noted, all addresses are in care of Tenax Therapeutics,
Inc. at ONE Copley Parkway, Suite 490, Morrisville, North Carolina
27560.
|
|
(2)
|
Based
upon 1,453,637 shares of common stock outstanding on April
16
, 2018. The number and
percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 of the Exchange Act and the information is not
necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares
as to which the person has sole or shared voting power or
investment power and also any shares that the person has the right
to acquire within 60 days of April
16
, 2018
through the exercise of any stock
options or other rights. Any shares that a person has the right to
acquire within 60 days are deemed to be outstanding for the purpose
of computing the percentage ownership of such person but are not
deemed outstanding for the purpose of computing the percentage
ownership of any other person.
|
|
(3)
|
Includes
1,545
shares of common stock,
and
107,488
shares of common
stock subject to warrants that are exercisable or convertible, as
applicable within 60 days of April
16
, 2018.
|
|
(4)
|
On
April 3, 2017, Mr. Kelley resigned as our Chief Executive Officer
and as a director effective immediately.
|
|
(5)
|
Includes
742
shares of restricted common
stock and 2,000 shares of common stock subject to options that are
vested, vesting, exercisable or convertible, as applicable, within
60 days of April
16
,
2018
.
Mr. Pepin is a co-founder
of EOS, an investment company, which serves as the Investment
Manager and Managing Director for JP SPC3 OXBT Fund (“OXBT
Fund”), and consequently he may be deemed to be the
beneficial owner of shares held by OXBT Fund. Mr. Pepin disclaims
beneficial ownership of the shares held by OXBT Fund except to the
extent of his pecuniary interest therein.
|
|
(6)
|
With
respect to Dr. Blanck, includes
257
shares of common stock subject to
warrants and
2,526
shares of
common stock subject to options that are vested, vesting,
exercisable or convertible, as applicable, within 60 days of April
16
, 2018
;
With
respect to Mr. DiTonno, includes
129
shares of common stock subject to
warrants and
2,576
shares of
common stock subject to options that are vested, vesting,
exercisable or convertible, as applicable, within 60 days of April
16
, 2018
;
With
respect to Mr. Rallis, includes 129 shares of common stock subject
to warrants
and
2,490 shares of
common stock subject to options that are vested, vesting,
exercisable or convertible, as applicable, within 60 days of April
16
, 2018
;
With
respect to Mr. Jebsen, includes
24,298
shares of common stock subject to
options that are vested, vesting, exercisable or convertible, as
applicable, within 60 days of April
16
, 2018;
With
respect to Mr. Proehl, includes 2,750 shares of common stock
subject to options that are vested, vesting, exercisable or
convertible, as applicable, within 60 days of April
16
, 2018
and
1,495 shares for which voting, and investment power is shared with
Mr. Proehl’s spouse
;
With
respect to Mr. Mitchum, includes
2,250 s
hares of common stock subject to
options that are vested, vesting, exercisable or convertible, as
applicable, within 60 days of April
16
, 2018
and
3,050 shares for which voting, and investment power is shared with
Mr. Mitchum’s spouse
; and
With
respect to all officers and directors as a group, includes 515
shares of common stock subject to warrants and 38,890 shares of
common stock subject to options that are vested, vesting,
convertible, or exercisable, as applicable, within 60 days of April
16
, 2018
.
|
18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions
Review and Approval of Related Person Transactions
Our
Audit and Compliance Committee is responsible for the review,
approval and oversight of all related party transactions. The Audit
and Compliance Committee reviews all related party transactions for
potential conflict of interest situations on an ongoing basis;
provided, however, our Board may from time to time delegate to
another independent body of the Board the authority to conduct
appropriate review and oversight of related party transactions for
potential conflict of interest situations. We are not authorized to
engage in any related party transaction unless the Audit and
Compliance Committee or another independent body of the Board
delegated by the Board approves the transaction.
We have
not engaged in any related party transaction since January 1, 2016
in which the amount involved exceeds $120,000 and in which any of
our directors, executive officers or any holder of more than 5% of
our common stock, or any member of the immediate family of any of
these persons or entities controlled by any of them, had or will
have a direct or indirect material interest, other than the
compensation arrangements described in “Executive and
Director Compensation.”
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
The
members of our Board of Directors, our executive officers, and
persons who hold more than 10% of our outstanding common stock are
subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), which requires them to file reports with respect to
their ownership of our common stock and their transactions in such
common stock.
Based
solely upon our review of the Section 16(a) reports in our records
for Fiscal 2017 transactions in our common stock, we believe that
during the fiscal year ended December 31, 2017 our officers,
directors and greater than 10% owners timely filed all reports they
were required to file under Section 16(a), except that
John Kelley had one late Form 4 filing,
resulting in the failure to timely report two transactions, and
Ronald Blanck had one late Form 4 filing, resulting in the failure
to timely report one transaction
.
19
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Independent Registered Public Accounting Firm
The
Audit and Compliance Committee has selected Cherry Bekaert LLP as
our independent registered public accounting firm for the year
ending December 31, 2018. Cherry Bekaert LLP served as our
independent registered public accounting firm for the year ending
December 31, 2017.
Representatives
of
Cherry Bekaert LLP
are
expected to be present at the Annual Meeting and will have the
opportunity to make a statement, if they desire to do so, and will
be available to respond to appropriate questions from our
stockholders.
Cherry
Bekaert LLP has served as our independent auditor since January
2009. In determining whether to reappoint Cherry Bekaert LLP, our
Audit and Compliance Committee reviewed the quality of the
committee’s discussions with the lead audit partner, the
performance of the audit team assigned to our account, Cherry
Bekaert LLP’s technical expertise and industry knowledge,
Cherry Bekaert LLP’s tenure as our independent auditor and
the potential impact of changing auditors. Our Audit and Compliance
Committee believes that these factors, in particular Cherry Bekaert
LLP’s long-term knowledge of the Company, enable it to
perform its audits with effectiveness and efficiency.
Our
organizational documents do not require that the stockholders
ratify the selection of Cherry Bekaert LLP as our independent
registered public accounting firm. We request such ratification as
a matter of good corporate practice. If the stockholders do not
ratify the selection, the Audit and Compliance Committee will
reconsider whether to retain Cherry Bekaert LLP, but still may
retain them. Even if the selection is ratified, the Audit and
Compliance Committee, in its discretion, may change the appointment
at any time during the year if it determines that such a change
would be in the best interests of us and our
stockholders.
The
aggregate fees billed for professional services by professional
accounting firms in the years ending December 31, 2017 and 2016
were as follows:
|
|
2017
|
2016
|
|
Audit fees
(1)
|
$
133,000
|
$
179,000
|
|
Audit-Related
Fees
(2)
|
—
|
—
|
|
Tax fees
(3)
|
15,350
|
25,050
|
|
All Other Fees
(4)
|
—
|
—
|
|
Total
fees
|
$
148,350
|
$
204,050
|
|
(1)
|
This
category includes fees billed for the fiscal years shown for
professional services for the audit of our annual financial
statements, review of financial statements included in our
quarterly reports on Form 10-Q, and services that are normally
provided by the independent auditor in connection with statutory
and regulatory filings or engagements for the relevant fiscal
years.
|
|
(2)
|
This
category includes fees billed in the fiscal years shown for
assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements and
are not reported under the category “Audit Fees.” There
were no audit-related fees billed to us in 2017 and
2016.
|
|
(3)
|
This
category includes fees billed in the fiscal years shown for
professional services for tax compliance, tax advice, and tax
planning.
|
|
(4)
|
This
category includes fees billed in the fiscal years shown for
products and services provided by the principal accountant that are
not reported in any other category. There were no other fees billed
to us in 2017 and 2016.
|
It is
our Audit
and Compliance
Committee’s policy and procedure to approve in advance all
audit engagement fees and terms and all permitted non-audit
services provided by our independent registered public accounting
firm. We believe that all audit engagement fees and terms and
permitted non-audit services provided by our independent registered
public accounting firm as described in the above table were
approved in advance by our Audit
and
Compliance
Committee.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
RATIFICATION OF THE SELECTION OF CHERRY BEKAERT LLP, AS OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
20
OTHER MATTERS
Other Business
As of the date of this proxy statement, the Board
knows of no other matters that may come before the Annual Meeting.
However, if any matters other than those referred to herein should
be presented properly for consideration and action at the Annual
Meeting, or any adjournment or postponement thereof, the proxies
will be voted with respect thereto in accordance with the best
judgment and in the discretion of the proxy
holders.
Stockholder Proposals
Under
certain conditions, stockholders may request us to include a
proposal for action at a forthcoming meeting of our stockholders in
the proxy materials for such meeting. All stockholder proposals
intended to be presented at our 2019 Annual Meeting of Stockholders
must be received by us no later than
December 21, 2018
for inclusion in the
proxy statement and proxy card relating to such meeting.
However, if the date of the 2019
Annual Meeting is changed by more than 30 days from the date
of the first anniversary of the 2018 Annual Meeting, then the
deadline is a reasonable time before we begin to print and mail our
proxy statement for the 2019 Annual Meeting.
In
addition, our bylaws require that we be given advance notice of
stockholder nominations for election to the Board of Directors and
of other matters that stockholders wish to present for action at an
annual meeting of stockholders, other than matters included in our
proxy statement. The required notice must be in writing, include
the information set forth in the bylaws and be received by our
corporate secretary at our principal offices not less than 120 days
nor more than 150 days prior to the one-year anniversary of the
preceding year’s annual meeting, provided, however, that if
the date of the annual meeting is more than 30 days before or more
than 60 days after the one-year anniversary of the preceding
year’s annual meeting, a stockholder’s notice must be
received not later than the 90
th
day prior to such
annual meeting, or if later, the 10
th
day following the
day on which public disclosure of the date of the annual meeting
was first made. The date of our 2019 Annual Meeting of Stockholders
has not yet been established, but assuming it is held on June 13,
2019, in order to comply with the time periods set forth in our
bylaws, appropriate notice for the 2019 Annual Meeting would need
to be provided to our corporate secretary no earlier than January
14, 2019, and no later than February 13, 2019.
Costs of Soliciting Proxies
We will
bear the cost of this solicitation, including the preparation,
printing, and mailing of the proxy statement, proxy card, and any
additional soliciting materials sent by us to stockholders. Our
directors, officers, and employees may solicit proxies personally
or by telephone without additional compensation. We will also
reimburse brokerage firms and other persons representing beneficial
owners of shares for reasonable expenses incurred in forwarding
proxy soliciting materials to the beneficial owners.
Availability of Report on Form 10-K
Copies of our Annual Report on
Form 10-K for the year ended December 31, 2017, including financial
statements and schedules, are available on our website at
http://www.tenaxthera.com and will be provided upon written
request, without charge, to any person whose proxy is being
solicited. Written requests should be made to Tenax Therapeutics,
Inc., Attn: Investor Relations, ONE Copley Parkway, Suite 490,
Morrisville, North Carolina 27560.
Stockholders Sharing the Same Last Name and Address
Only
one annual report or proxy statement, as applicable, may be
delivered to multiple stockholders sharing an address unless we
have received contrary instructions from one or more of the
stockholders. We will deliver promptly upon written or oral request
a separate copy of the annual report or proxy statement, as
applicable, to a stockholder at a shared address to which a single
copy was delivered. Requests for additional copies should be
directed to Investor Relations by e-mail addressed to
n.hecox@tenaxthera.com, by mail addressed to Tenax Therapeutics,
Inc., Attn: Investor Relations, ONE Copley Parkway, Suite 490,
Morrisville, North Carolina 27560, or by telephone at (919)
855-2100. Stockholders sharing an address and currently receiving a
single copy may contact Investor Relations as described above to
request that multiple copies be delivered in future years.
Stockholders sharing an address and currently receiving multiple
copies may request delivery of a single copy in future years by
contacting Investor Relations as described above.
REQUESTS FOR DIRECTIONS TO OUR COMPANY’S ANNUAL
MEETING
The
2018 Annual Meeting of Stockholders will be held on
June 13, 2018
at the offices of Tenax
Therapeutics, Inc. located at ONE Copley Parkway, Suite 490,
Morrisville, North Carolina 27560 at
9:00 a.m.,
Eastern Daylight Time. Requests
for directions to the meeting location may be directed to Tenax
Therapeutics, Inc., Attn: Investor Relations, ONE Copley Parkway,
Suite 490, Morrisville, North Carolina 27560.
21
|
TENAX THERAPEUTICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – JUNE 13, 2018 AT 9:00 AM
ET
|
|
|
|
|
|
|||||||
|
CONTROL ID:
|
|
|
|
|
|
|
|
|||||
|
REQUEST ID:
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
||||||
|
The
undersigned stockholder of Tenax Therapeutics, Inc. hereby appoints
Michael B. Jebsen and Nancy J.M. Hecox, or either of them as
proxies, each with full powers of substitution, to represent and to
vote as proxy, as designated, all shares of common stock of Tenax
Therapeutics, Inc. held of record by the undersigned on April 16,
2018, at the Annual Meeting of Stockholders (the “Annual
Meeting”) to be held on Wednesday, June 13, 2018 at 9:00
a.m., local time, at the offices of Tenax Therapeutics, Inc.
located at ONE Copley Parkway, Suite 490, Morrisville, North
Carolina 27560, or at any adjournment or postponement
thereof. The undersigned hereby revokes all prior
proxies.
|
||||||||||||
|
|
|
|||||||||||
|
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
|
||||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
VOTING INSTRUCTIONS
|
|
|
|
|
|
|
||||||
|
If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
MAIL:
|
Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
|
|
|
|
|
|
|||||
|
INTERNET:
|
https://www.iproxydirect.com/TENX
|
|
|
|
|
|
|||||
|
PHONE:
|
1-866-752-VOTE
(8683)
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
ANNUAL MEETING OF THE STOCKHOLDERS OF
TENAX THERAPEUTICS, INC.
|
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
|
|||||||||
|
|
|
|||||||||
|
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
|
|||||||||
|
|
|
|
|
|||||||
|
Proposal
1
|
|
|
FOR
ALL
|
|
WITHHOLD
ALL
|
|
FOR
ALL
EXCEPT
|
|
|
|
|
|
Election
of Directors:
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
Ronald
R. Blanck, DO
|
|
|
|
|
|
☐
|
|
|
|
|
|
Anthony
A. DiTonno
|
|
|
|
|
|
☐
|
|
CONTROL ID:
|
|
|
|
James
Mitchum
|
|
|
|
|
|
☐
|
|
REQUEST ID:
|
|
|
|
Gregory
Pepin
|
|
|
|
|
|
☐
|
|
|
|
|
|
Gerald
T. Proehl
|
|
|
|
|
|
☐
|
|
|
|
|
|
Chris
A. Rallis
|
|
|
|
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposal
2
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
Ratification
of the appointment of Cherry Bekaert LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2018.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARK
“X” HERE IF YOU PLAN TO ATTEND THE MEETING:
☐
|
|||||
|
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION
OF EACH OF THE DIRECTOR NOMINEES. THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE FOR THE RATIFICATION OF THE SELECTION OF CHERRY
BEKAERT LLP, AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
SPECIFIED HEREIN BY THE UNDERSIGNED STOCKHOLDER. THIS PROXY, IF
DULY EXECUTED AND RETURNED, WILL BE VOTED “FOR” THE
ELECTION OF EACH OF THE DIRECTOR NOMINEES AND “FOR”
PROPOSAL 2 IF NO INSTRUCTION TO THE CONTRARY IS INDICATED. THE
PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING OF STOCKHOLDERS IN
ACCORDANCE WITH THEIR JUDGMENT.
|
|
|
|
MARK HERE FOR ADDRESS CHANGE
☐
New Address (if applicable):
___________________________
___________________________
___________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized
person.
Dated:
________________________, 2018
|
||||||
|
|
||||||||||
|
|
(Print Name of
Stockholder and/or Joint Tenant)
|
|||||||||
|
|
||||||||||
|
(Signature of
Stockholder)
|
||||||||||
|
|
||||||||||
|
(Second Signature
if held jointly)
|
||||||||||
TABLE OF CONTENTS