A 24/7 work day should have afforded him the time to copy and paste his actual employment agreement into the 8-K that was just filed.
Did he have to? No.
Should he have? Obviously.
Instead he pointed people to "the form previously approved for executive officers of the Company" which the very few who were moved to look at (then and now) found to be just that...a form. All significant numbers appear in the form of blank spaces. (e.g. He's entitled to "(i) a lump sum payment equal to ____ months of Executive’s Base Salary" in the event of a change of control.)
Another contract term is "Executive’s employment relationship is at-will." He can leave, or his pals can require that he leave, whenever they feel like it. The term "contract" loses meaning when it includes stuff like that.
"The employment agreement continues Mr. Ehrlich’s current base salary of $475,000 per year". There's no restriction on or requirement to adjust it at any point. The Compensation Committee could increase or decrease it tomorrow. The term "contract" loses meaning when it includes stuff like that.
The things that are typically fixed in a contract...time and money...are left open in this agreement and subject to change on a whim.
As you noted the specifics of "certain market capitalization, licensing revenue and clinical trial performance goals" are left to one's imagination.
The market cap math is a function of just two things....outstanding shares times share price. It's safe to assume that share and cash awards are based on an increase in market cap and management can't snap its fingers and increase the share price as it can with the outstanding shares. Tying an award to an increase in share price makes a lot of sense. Why not just do that?
Licensing revenue is a clear measure. Hopefully the shareholders will see a benefit from that if it occurs, but it too should cause improvement in the share price. Why not let that happen without chipping away at it with an award?
"Clinical trial performance goals" can be subjective unless the goal is completion. Success or failure in results can be hard to define. After all, the assertion that Brilacidin has never failed a trial doesn't hold water if the measure is based on beginning a Phase 3, not to mention approval.
The CEO should have included the measurements to be used in the award decision making process in his filing. His decision not to says a lot.
As my dear old grandfather Litvak said (just before they swung the trap), he said "You can't cheat an honest man. Never give a sucker an even break or smarten up a chump."
