Item 8.01. Other Events.
On September 5, 2018, the Company’s Board of Directors (the “
Board
”), following a review of its corporate governance practices matters by the Nominating and Governance Committee as well as the full Board, determined to enhance its governance practices by establishing the position of lead independent director and eliminating the position of Chairman of the Board. The position of Chairman of the Board, until September 5, 2018, was held by Dr. Michael Sinclair, who was not an independent member of the Board as determined in accordance with Nasdaq’s marketplace rules. In addition to creating the new position of lead independent director, the Board also appointed Dr. Gabrielle Silver to serve as lead independent director. Dr. Silver has been an independent member of the Board since May 5, 2016, has been the Chairperson of the Company’s Nominating and Corporate Governance Committee since January 29, 2017, and has been a member of the Company’s Compensation Committee since May 26, 2017. Dr. Silver has extensive experience managing the growth and profitability of pharmaceuticals, healthcare services and diagnostics businesses. Dr. Silver’s qualifications to serve on the Board and as the lead independent director include her healthcare business leadership experience.
On June 8, 2018 and June 11, 2018, Dr. Phil Skolnick and Dr. Roger Crystal, respectively, (the “
Executives
”) adopted Rule 10b5-1 trading plans to, over time, exercise certain options to purchase Company common stock and automatically sell the shares issued on exercise of such options in accordance with each plan’s specifications. 160,000 options (in the case of Dr. Skolnick) and 225,000 options (in the case of Dr. Crystal) are subject to the trading plans. The trading plans were established as part of the Executives’ investment strategies for asset diversification and liquidity over time. The trading plans were adopted during an “open window” in accordance with guidelines specified by Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and as permitted by the Company’s insider trading policy. Sales under the trading plans may commence on October 1, 2018, are based upon pre-established stock price thresholds and will expire once all of the shares have been sold or on January 31, 2020 (in the case of Dr. Skolnick) and July 31, 2019 (in the case of Dr. Crystal), whichever is earlier. Actual sale transactions will be disclosed publicly through Form 144 and Form 4 filings with the Securities and Exchange Commission, as required.
Rule 10b5-1 allows persons who may be considered insiders to adopt pre-arranged written plans for trading specified amounts of stock. A plan establishes predetermined trading parameters that, among other things, do not permit the person adopting the plan to exercise subsequent influence over how, when or whether to effect
trades. Once a plan has been properly adopted, trades may be executed pursuant to the terms of the plan at times when the person would otherwise be restricted from trading. Trading plans are designed to allow persons to sell shares in an orderly fashion for asset diversification, liquidity, tax planning and other purposes when they might otherwise be restricted from doing so due to material, non-public information that they might possess at the time of the sale.
The Company does not undertake any obligation to report Rule 10b5-1 trading plans that may be adopted by any of its officers, directors or stockholders in the future, or to report any modifications or terminations of any publicly announced plan, except to the extent required by law.