(Edgar Glimpses Via Acquire Media NewsEdge) Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In recognition of Aratana Therapeutics, Inc.'s (the "Company") executive
officers' contributions to the strong performance of the Company's common stock
since the Company's initial public offering in June 2013 and to reflect the
increased responsibilities of its executive officers resulting from the
completion of the acquisitions of Okapi Sciences N.V. and Vet Therapeutics,
Inc., the Company's board of directors (the "Board") recently undertook a review
of the Company's compensation program for executive officers and approved
certain changes to the executive officers' compensation on January 12, 2014,
based on the recommendations of the compensation committee of the Board. The
compensation committee developed its recommendations in consultation with
Dr. St. Peter and based upon a survey of comparable publicly held companies
prepared for the committee by Radford, an Aon Hewitt company. The changes
included adjustments to the executive officer's base salaries as well as grants
of equity incentive awards intended to reward performance while promoting the
creation of long-term stockholder value.
2014 Base Salaries and Target Bonuses
The Company has historically established base salaries for its executive
officers through negotiations with the individual executive officer, generally
at the time the executive officer commenced employment with the Company, with
the intent of providing base salaries at a level sufficient to attract and
retain individuals with superior talent. As part of the January 2014
compensation review, the compensation committee and the Board considered each
executive officer's individual performance, tenure with the Company and level
and scope of responsibility and experience, as well as market pay practices.
Based on the foregoing considerations, the Board approved the following
increases to the executive officers' base salaries for 2014:
Name Pre-Adjustment Base Salary ($) Post-Adjustment Base Salary ($)
Steven St. Peter, M.D. 425,000 467,500
Craig A. Tooman(1) 350,000 350,000
Julia A. Stephanus 275,000 302,500
Ernst Heinen, D.V.M., Ph.D. 275,000 302,500
Linda Rhodes, V.M.D., Ph.D. 225,000 253,125
(1) The Board elected not to increase Mr. Tooman's base salary due to his
relatively short tenure as an employee.
In addition, the Board approved an increase in Dr. Rhodes's target bonus amount
from its 2013 level of 30% to 2014 target of 40% of her annual base salary. The
Board elected to maintain 2014 target bonus percentages for our other executive
officers at their 2013 levels.
2014 Equity Incentive Awards
The Board believes that employees in a position to make a substantial
contribution to the long-term success of the Company should have a significant
and ongoing stake in our success and that the size of such stake should reflect
an employee's ability to influence our long-term performance. Equity incentive
awards not only compensate but also motivate and encourage retention of our
executive officers by providing an opportunity to participate in the ownership
of the Company while promoting long-term value creation for the Company's
stockholders by aligning the interests of the executive officers with the
interests of the stockholders. As a result of the January 2014 compensation
review, the Board elected to approve grants of the following equity incentive
awards to the executive officers, effective as of January 13, 2014:
Name Stock Options (#) Restricted Shares (#)
Steven St. Peter, M.D. 225,000 225,000
Craig A. Tooman(1) 25,000 -
Julia A. Stephanus 35,000 -
Ernst Heinen, D.V.M., Ph.D. 50,000 -
Linda Rhodes, V.M.D., Ph.D. 50,000 -
(1) The Board elected to provide a smaller award to Mr. Tooman than to other
full-time executive officers due to his relatively short tenure as an
employee and the grant he received upon commencing employment with us in
The options granted to the Company's executive officers have an exercise price
per share equal to $18.42, the closing market price of the Company's common
stock on the date of grant, and vest as to 25% of the total number of option
shares on the first anniversary of the date of grant and in equal monthly
installments over the ensuing 36 months. Dr. St. Peter's restricted shares vest
in equal quarterly installments over three years following the date of grant,
provided that if Dr. St. Peter's employment with the Company terminates for any
reason other than cause or his resignation without good reason, a prorated
portion of the shares scheduled to vest on the next vesting date will vest, with
the proration based on the number of whole months elapsed since the vesting date
immediately preceding the date of Dr. St. Peter's termination or since the date
of grant if no vesting date has yet occurred.
Except with respect to awards granted to Dr. St. Peter, the foregoing equity
incentive awards are not subject to the accelerated vesting provisions, if any,
included in an executive officer's employment agreement that would provide
accelerated vesting upon a termination without cause or resignation for good
reason other than such a termination that occurs on account of or within twelve
12 months following a change in control of the Company.
Item 8.01 Other Events.
The Company provided an updated description of its business in the prospectus
included in the Company's registration statement on Form S-1 (File
No. 333-193324) filed with the Securities and Exchange Commission (the "SEC") on
January 13, 2014 (the "Prospectus"). An updated business description is filed as
Exhibit 99.1 to this Current Report and is incorporated herein by reference.
The Company also provided updated risk factors in the Prospectus. Updated risk
factors are filed as Exhibit 99.2 to this Current Report and are incorporated
herein by reference. These updated risk factors supersede in their entirety the
risk factors included in our reports previously filed with the SEC pursuant to
the Securities Exchange Act of 1934.
Item 9.01. Financial Statements and Exhibits.
99.1 Business Description.