MannKind Corporation (NASDAQ:MNKD) stock has declined to last close of $1.22 from levels of over $3 in less than four months. The stock has shown no signs of respite which can convince long-term investors to stay invested in the stock. Last week, the company submitted a SEC filing that indicates of some major change expected in the coming period.
Earlier this month, MannKind filed an 8-K current report to the SEC, which mentioned that the firm had finalized change of control contracts with its top management team. The list of executives that were named as entering into these contracts include the company’s CFO and CEO Matthew J. Pfeffer; CVP and general counsel Mr. David Thomson, Ph.D., J.D.; Chief Commercial Officer Mr. Michael E. Castagna; Chief Medical Officer Mr. Raymond Urbanski, M.D., Ph.D.; Principal Accounting Officer and SVP Rose Alinaya; Chief Technology Officer Mr. Joseph Kocinsky; and Chief People Officer Mr. Stuart A. Tross.
Under the change of control contracts, each executive is assured employment for 2 years subsequent a change of control. In specific, the agreements state that the executives will serve a role with responsibilities similar to what existed before the change of control, retain a salary equal to previous salary, work at the same location, be eligible for yearly performance bonuses, and avail other benefits.
There was a “golden parachute” facility in the change of control contracts. If an executive is dismissed or resigns for good reason within assured employment period subsequent a change of control, the MannKind would be bound to offer numerous benefits, including a bonus 1.5 times of the average bonus over the preceding three years, an 18-month severance, and dental and health insurance for up to 18 months. It indicates that there is a probability that the firm could be acquired, and the current management team stays protected if that turns into a reality in the coming period.
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