cowboyd...Input appreciated. Let me respond to a couple of points.
You said:
I also think if such a change in control agreement had been executed it would certainly qualify as a " Material Event " and would have been disclosed under SEC guidelines. The side bar to the above is that discussions not finalized would, of course, not be subject to disclosure.
A valid point, however, my belief stems from the growing number of company actions described in my recent posts. They seem to point to the company preparing itself to execute just such an event. Whether the trigger has been pulled or not depends on the nature of the deal. If it involves a significant amount of the company's securities, it may undergo a "quiet period" for SEC review. Perhaps that would explain why the S-8 was not disclosed.
It is also very possible with Tony's loss of management involvement and return to Chief Scientific Officer status that this may mean there is no logical way for him to now effect such an economic alliance since others are now in charge of that development. He is now concentrating on R&D not marketing. If by chance this line of thought is correct then the " Change of control " text may not be relevant.
Also a possible explanation, but if it's not relevant, then why did they specifically include the "change of control" text in that 10K passage. I respectfully suggest that you can't draw a conclusion from that sentence without the other two because together they are all meant to address the central point, which is the change in the performance grant. Let me illustrate.
I'll use italics and bold to separate the three statements. Actually, the thoughts you suggest could have been conveyed using only the first and third statements. Yet they specifically chose to include the middle one:
Furthermore because it is not probable at this time that the shares will be issued, no stock based compensation has been recorded as a result of this agreement in the accompanying consolidated financial statements. The agreement contains a change of control clause whereby these shares will be immediately vested and non-forfeitable if the agreement is not assumed or substituted at the time of such change. Subsequent to year end, our board of directors has resolved to revise the performance measures, however the terms of such revision have not yet been finalized.
Actually, I found the middle statement to be key, as opposed to the last, and it definitely directs us to the "change" clause in the agreement. It wasn't until I got there and saw that the remedy was to vest shares and issue them via S-8, then tied that to the Transfer Agent's statement that an S-8 had been filed, that I concluded that a "change" event had been invoked.
In my mind, the greater uncertainty lies in examining the meaning of "change of control". There are several definitions of events that would constitute a "change" according to the Performance Share Agreement. I would welcome any thoughts you might have along those lines as well.
BTW, between you me and the fence post, this is precisely the type of discussion I enjoy and I appreciate your participation.
Later,
W2P
