Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
ý
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
Page
|
||
Business
|
(1)
|
Patent information current as of March 24, 2014.
|
*
|
Priority filing dates are based on the filing dates of provisional patent applications. Provisional applications expire unless they are converted to non-provisional applications within one year.
|
**
|
An “allowed” patent application is an active case that has been found by the patent office to contain patentable subject matter, subject to the payment of issue/grant fees by the applicant.
|
***
|
Once issued, the term of a US patent first filed after mid-1995 generally extends until the 20th anniversary of the filing date of the first non-provisional application to which such patent claims priority. It is important to note, however, that the United States Patent & Trademark Office, or USPTO, sometimes requires the filing of a Terminal Disclaimer during prosecution, which may shorten the term of the patent. On the other hand, certain patent term adjustments may be available based on USPTO delays during prosecution. Similarly, in the pharmaceutical area, certain patent term extensions may be available based on the history of the drug in clinical trials. We cannot predict whether or not any such adjustments or extensions will be available or the length of any such adjustments or extensions.
|
Risk Factors
|
|
·
|
execute product development activities using an unproven technology;
|
|
·
|
build, maintain and protect a strong intellectual property portfolio;
|
|
·
|
gain acceptance for the development and commercialization of any product we develop;
|
|
·
|
develop and maintain successful strategic relationships; and
|
|
·
|
manage our spending and cash requirements as our expenses are expected to increase due to research and preclinical work, clinical trials, regulatory approvals, and commercialization and maintaining our intellectual property portfolio
|
|
·
|
we may not be able to attract and build a significant marketing or sales force;
|
|
·
|
the cost of establishing a marketing or sales force may not be justifiable in light of the revenues generated by any particular product; and
|
|
·
|
our direct sales and marketing efforts may not be successful.
|
|
·
|
revenues earned from our partners, including Alnylam, Spectrum, and Monsanto;
|
|
·
|
revenues earned from our DoD contract to develop TKM-Ebola;
|
|
·
|
the extent to which we continue the development of our product candidates or form collaborative relationships to advance our products;
|
|
·
|
our decisions to in-license or acquire additional products or technology for development, in particular for our RNAi therapeutics programs;
|
|
·
|
our ability to attract and retain corporate partners, and their effectiveness in carrying out the development and ultimate commercialization of our product candidates;
|
|
·
|
whether batches of drugs that we manufacture fail to meet specifications resulting in delays and investigational and remanufacturing costs;
|
|
·
|
the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and products;
|
|
·
|
competing technological and market developments; and
|
|
·
|
prosecuting and enforcing our patent claims and other intellectual property rights.
|
|
·
|
controlled research and human clinical testing;
|
|
·
|
establishment of the safety and efficacy of the product for each use sought;
|
|
·
|
government review and approval of a submission containing manufacturing, pre-clinical and clinical data;
|
|
·
|
adherence to Good Manufacturing Practice Regulations during production and storage; and
|
|
·
|
control of marketing activities, including advertising and labelling.
|
|
·
|
decreased demand for our product candidates;
|
|
·
|
impairment of our business reputation;
|
|
·
|
withdrawal of clinical trial participants;
|
|
·
|
costs of related litigation;
|
|
·
|
substantial monetary awards to patients or other claimants;
|
|
·
|
loss of revenues; and
|
|
·
|
the inability to commercialize our product candidates.
|
|
·
|
some or all patent applications may not result in the issuance of a patent;
|
|
·
|
patents issued may not provide the holder with any competitive advantages;
|
|
·
|
patents could be challenged by third parties;
|
|
·
|
the patents of others, including Alnylam, could impede our ability to do business;
|
|
·
|
competitors may find ways to design around our patents; and
|
|
·
|
competitors could independently develop products which duplicate our products.
|
|
·
|
much greater financial, technical and human resources than we have at every stage of the discovery, development, manufacture and commercialization process;
|
|
·
|
more extensive experience in pre-clinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing, marketing and selling pharmaceutical products;
|
|
·
|
product candidates that are based on previously tested or accepted technologies;
|
|
·
|
products that have been approved or are in late stages of development; and
|
|
·
|
collaborative arrangements in our target markets with leading companies and research institutions.
|
|
·
|
the safety and effectiveness of our products;
|
|
·
|
the ease with which our products can be administered and the extent to which patients and physicians accept new routes of administration;
|
|
·
|
the timing and scope of regulatory approvals for these products;
|
|
·
|
the availability and cost of manufacturing, marketing and sales capabilities;
|
|
·
|
price;
|
|
·
|
reimbursement coverage; and
|
|
·
|
patent position.
|
|
·
|
general economic and political conditions in Canada, the United States and globally;
|
|
·
|
governmental regulation of the health care and pharmaceutical industries;
|
|
·
|
failure to achieve desired drug discovery outcomes by us or our collaborators;
|
|
·
|
failure to obtain industry partner and other third party consents and approvals, when required;
|
|
·
|
stock market volatility and market valuations;
|
|
·
|
competition for, among other things, capital, drug targets and skilled personnel;
|
|
·
|
the need to obtain required approvals from regulatory authorities;
|
|
·
|
revenue and operating results failing to meet expectations in any particular period;
|
|
·
|
investor perception of the health care and pharmaceutical industries;
|
|
·
|
limited trading volume of our Common Shares;
|
|
·
|
announcements relating to our business or the businesses of our competitors; and
|
|
·
|
our ability or inability to raise additional funds.
|
Unresolved Staff Comments
|
Properties
|
Legal Proceedings
|
Mine Safety Disclosures
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
NASDAQ
High
(US$)
|
|
NASDAQ
Low
(US$)
|
|
TSX
High
(C$)
|
|
TSX
Low
(C$)
|
|||||||||
Year Ended:
|
|
|
|
|
||||||||||||
December 31, 2013
|
|
$
|
11.42
|
|
|
$
|
4.18
|
|
|
$
|
11.62
|
|
|
$
|
4.31
|
|
December 31, 2012
|
|
$
|
6.78
|
|
|
$
|
1.52
|
|
|
$
|
6.49
|
|
|
$
|
1.41
|
|
Quarter Ended:
|
|
|
|
|
||||||||||||
December 31, 2013
|
|
$
|
11.42
|
|
|
$
|
6.93
|
|
|
$
|
11.62
|
|
|
$
|
7.16
|
|
September 30, 2013
|
|
$
|
7.72
|
|
|
$
|
4.70
|
|
|
$
|
7.90
|
|
|
$
|
4.96
|
|
June 30, 2013
|
|
$
|
5.25
|
|
|
$
|
4.25
|
|
|
$
|
5.34
|
|
|
$
|
4.35
|
|
March 31, 2013
|
|
$
|
5.53
|
|
|
$
|
4.18
|
|
|
$
|
5.45
|
|
|
$
|
4.31
|
|
December 31, 2012
|
|
$
|
6.78
|
|
|
$
|
3.22
|
|
|
$
|
6.49
|
|
|
$
|
3.21
|
|
September 30, 2012
|
|
$
|
4.22
|
|
|
$
|
2.04
|
|
|
$
|
4.09
|
|
|
$
|
1.98
|
|
June 30, 2012
|
|
$
|
2.80
|
|
|
$
|
1.77
|
|
|
$
|
2.64
|
|
|
$
|
1.91
|
|
March 31, 2012
|
|
$
|
2.91
|
|
|
$
|
1.52
|
|
|
$
|
2.85
|
|
|
$
|
1.41
|
|
Month Ended:
|
|
|
|
|
||||||||||||
February 28, 2014
|
|
$
|
24.88
|
|
|
$
|
13.66
|
|
|
$
|
27.50
|
|
|
$
|
15.06
|
|
January 31, 2014
|
|
$
|
14.85
|
|
|
$
|
7.65
|
|
|
$
|
16.50
|
|
|
$
|
8.14
|
|
Location
|
|
Number of Shares
|
|
Percentage of
Total Shares
|
Number of Registered
Shareholders of
Record
|
|||||||
Canada
|
|
15,218,380
|
|
|
69.35
|
%
|
119
|
|
||||
United States
|
|
6,726,657
|
|
|
30.65
|
%
|
14
|
|
||||
Other
|
|
801
|
|
|
0.00
|
%
|
4
|
|
||||
|
|
|||||||||||
Total
|
|
21,945,838
|
|
|
100
|
%
|
137
|
|
Selected Consolidated Financial Data
|
Year Ended December 31,
|
||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Operating Data
|
||||||||||||||||||||
Revenue
|
15,464 | 14,105 | 16,812 | 20,745 | 12,693 | |||||||||||||||
Expenses
|
27,617 | 27,050 | 27,505 | 32,900 | 20,151 | |||||||||||||||
Loss from operations
|
(12,153 | ) | (12,945 | ) | (10,694 | ) | (12,155 | ) | (7,458 | ) | ||||||||||
Net income (loss)
|
(14,064 | ) | 29,612 | (10,083 | ) | (12,058 | ) | (7,697 | ) | |||||||||||
Weighted average number of common shares—basic
(1)
|
15,303 | 13,728 | 11,319 | 10,333 | 10,325 | |||||||||||||||
Weighted average number of common shares—diluted
(1)
|
15,303 | 14,321 | 11,319 | 10,333 | 10,325 | |||||||||||||||
Income (loss) per common share—basic
|
(0.92 | ) | 2.16 | (0.89 | ) | (1.17 | ) | (0.75 | ) | |||||||||||
Income (loss) per common share—diluted
|
(0.92 | ) | 2.07 | (0.89 | ) | (1.17 | ) | (0.75 | ) | |||||||||||
Balance Sheet Data
|
||||||||||||||||||||
Total current assets
|
70,343 | 51,243 | 11,594 | 18,006 | 24,803 | |||||||||||||||
Total assets
|
71,716 | 52,595 | 13,758 | 21,136 | 27,956 | |||||||||||||||
Total liabilities
|
12,522 | 11,676 | 8,531 | 10,345 | 6,513 | |||||||||||||||
Share capital
|
242,045 | 206,572 | 200,965 | 196,393 | 195,727 | |||||||||||||||
Total stockholders’ equity
|
59,193 | 40,919 | 5,227 | 10,791 | 21,463 | |||||||||||||||
Number of shares outstanding
(1)
|
19,049 | 14,305 | 12,149 | 10,339 | 10,329 |
(1)
|
On November 4, 2010, Tekmira completed a consolidation of its common shares whereby five old common shares of Tekmira were exchanged for one new common share of Tekmira. Except as otherwise indicated, all references to common shares, common shares outstanding, average number of common shares outstanding, per share amounts and options in this document have been restated to reflect the common shares consolidation on a retroactive basis.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||||||||||||
2013
|
2013
|
2013
|
2013
|
2012
|
2012
|
2012
|
2012
|
|||||||||||||||||||||||||
Revenue
|
||||||||||||||||||||||||||||||||
Collaborations and contracts:
|
||||||||||||||||||||||||||||||||
DoD
|
$
|
2.6
|
$
|
2.8
|
$
|
2.4
|
$
|
1.9
|
$
|
3.6
|
$
|
1.9
|
$
|
2.5
|
$
|
3.5
|
||||||||||||||||
Other
|
(0.1)
|
0.1
|
0.4
|
0.2
|
0.3
|
0.1
|
0.1
|
0.1
|
||||||||||||||||||||||||
2.6
|
2.9
|
2.8
|
2.1
|
3.9
|
2.0
|
2.6
|
3.6
|
|||||||||||||||||||||||||
Alnylam milestone payments
|
5.0
|
—
|
—
|
—
|
—
|
—
|
1.0
|
—
|
||||||||||||||||||||||||
Spectrum milestone and royalty payments
|
—
|
—
|
—
|
—
|
—
|
1.0
|
—
|
—
|
||||||||||||||||||||||||
Total revenue
|
7.6
|
2.9
|
2.8
|
2.1
|
3.9
|
3.0
|
3.6
|
3.6
|
||||||||||||||||||||||||
Expenses
|
(9.9)
|
(6.6)
|
(5.9)
|
(5.1)
|
(9.8)
|
(4.8)
|
(6.2)
|
(6.2)
|
||||||||||||||||||||||||
Other income (losses)
|
(0.2)
|
(2.2)
|
0.1
|
0.5
|
44.2
|
(1.6)
|
0.7
|
(0.5)
|
||||||||||||||||||||||||
Net (loss) income
|
(2.6)
|
(5.9)
|
(3.0)
|
(2.5)
|
38.0
|
(3.4)
|
(1.9)
|
(3.1)
|
||||||||||||||||||||||||
Basic net (loss) income per share
|
$
|
(0.15)
|
$
|
(0.41)
|
$
|
(0.21)
|
$
|
(0.17)
|
$
|
2.72
|
$
|
(0.25)
|
$
|
(0.14)
|
$
|
(0.25)
|
||||||||||||||||
Diluted net (loss) income per share
|
$
|
(0.15)
|
$
|
(0.41)
|
$
|
(0.21)
|
$
|
(0.17)
|
$
|
2.51
|
$
|
(0.25)
|
$
|
(0.14)
|
$
|
(0.25)
|
2013
|
2012
|
2011
|
||||||||||
Total revenue
|
15.5 | 14.1 | 16.8 | |||||||||
Operating expenses
|
27.6 | 27.0 | 27.5 | |||||||||
Loss from operations
|
(12.2 | ) | (12.9 | ) | (10.7 | ) | ||||||
Net income (loss)
|
(14.1 | ) | 29.6 | (10.1 | ) | |||||||
Basic income (loss) per share
|
(0.92 | ) | 2.16 | (0.89 | ) | |||||||
Diluted income (loss) per share
|
(0.92 | ) | 2.07 | (0.89 | ) | |||||||
Total assets
|
71.7 | 52.6 | 13.8 | |||||||||
Total liabilities
|
12.5 | 11.7 | 8.5 | |||||||||
Total non-current liabilities
|
0.0 | 0.7 | 1.7 | |||||||||
Deficit
|
(167.0 | ) | (153.0 | ) | (182.6 | ) | ||||||
Accumulated other comprehensive loss
|
(15.8 | ) | (12.7 | ) | (13.2 | ) | ||||||
Total stockholders’ equity
|
59.2 | 40.9 | 5.2 |
2013
|
% of Total
|
2012
|
% of Total
|
|||||||||||||
Collaborations and contracts
|
||||||||||||||||
DoD
|
9.8 | 63 | % | 11.5 | 82 | % | ||||||||||
Alnylam
|
- | - | - | - | ||||||||||||
BMS
|
0.5 | 3 | % | 0.4 | 3 | % | ||||||||||
Other RNAi collaborators
|
0.1 | 1 | % | 0.1 | 1 | % | ||||||||||
Total collaborations and contracts
|
10.4 | 68 | % | 12.1 | 86 | % | ||||||||||
Alnylam milestone payments
|
5.0 | 32 | % | 1.0 | 7 | % | ||||||||||
Spectrum milestone and royalty payments
|
0.0 | 0 | % | 1.0 | 7 | % | ||||||||||
Total revenue
|
15.5 | 14.1 |
2013
|
% of Total
|
2012
|
% of Total
|
|||||||||||||
Research, development, collaborations and contracts
|
$ | 21.5 | 78 | % | $ | 18.0 | 67 | % | ||||||||
General and administrative
|
5.5 | 20 | % | 8.1 | 30 | % | ||||||||||
Depreciation
|
0.6 | 2 | % | 0.9 | 3 | % | ||||||||||
Total operating expenses
|
$ | 27.6 | $ | 27.0 |
2013
|
2012
|
|||||||
Interest income
|
$ | 0.5 | $ | 0.1 | ||||
Licensing settlement payment
|
- | 65.0 | ||||||
Licensing settlement legal fees
|
- | (18.7 | ) | |||||
Foreign exchange gains
|
1.1 | - | ||||||
Increase in fair value of warrant liability
|
(3.5 | ) | (3.8 | ) | ||||
Total other income (losses)
|
$ | (1.9 | ) | $ | 42.6 |
2012
|
% of Total
|
2011
|
% of Total
|
|||||||||||||
Collaborations and contracts
|
||||||||||||||||
DoD
|
$ | 11.5 | 82 | % | $ | 11.5 | 69 | % | ||||||||
Alnylam
|
- | - | 4.2 | 25 | % | |||||||||||
BMS
|
0.4 | 3 | % | 0.4 | 3 | % | ||||||||||
Other RNAi collaborators
|
0.1 | 1 | % | 0.1 | 1 | % | ||||||||||
Total collaborations and contracts
|
12.1 | 86 | % | 16.3 | 97 | % | ||||||||||
Alnylam milestone payments
|
1.0 | 7 | % | 0.5 | 3 | % | ||||||||||
Spectrum milestone and royalty payments
|
1.0 | 7 | % | - | 0 | % | ||||||||||
Total revenue
|
$ | 14.1 | $ | 16.8 |
2012
|
% of Total
|
2011
|
% of Total
|
|||||||||||||
Research, development, collaborations and contracts
|
$ | 18.0 | 67 | % | $ | 20.1 | 73 | % | ||||||||
General and administrative
|
8.1 | 30 | % | 6.4 | 23 | % | ||||||||||
Depreciation
|
0.9 | 3 | % | 1.0 | 4 | % | ||||||||||
Total operating expenses
|
27.0 | 27.5 |
2012
|
2011
|
|||||||
Interest income
|
$ | 0.1 | $ | 0.1 | ||||
Licensing settlement payment
|
65.0 | - | ||||||
Licensing settlement legal fees
|
(18.7 | ) | - | |||||
(Increase) decrease in fair value of warrant liability
|
(3.8 | ) | 0.6 | |||||
Total other income (losses)
|
$ | 42.6 | $ | 0.6 |
Year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Net income (loss) for the year
|
(14.1 | ) | 29.6 | (10.1 | ) | |||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
|
5.0 | 5.7 | 1.1 | |||||||||
Changes in operating assets and liabilities
|
2.3 | (2.4 | ) | 1.1 | ||||||||
Net cash (used in) operating activities
|
(6.7 | ) | 32.9 | (7.8 | ) | |||||||
Net cash used in investing activities
|
(0.7 | ) | (0.0 | ) | (0.1 | ) | ||||||
Net cash provided by financing activities
|
32.7 | 4.5 | 4.6 | |||||||||
Effect of foreign exchange rate changes on cash & cash equivalents
|
(3.6 | ) | 0.5 | (0.1 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
21.7 | 38.0 | (3.4 | ) | ||||||||
Cash and cash equivalents, beginning of year
|
47.0 | 9.0 | 12.4 | |||||||||
Cash and cash equivalents, end of year
|
68.7 | 47.0 | 9.0 |
|
·
|
revenues earned from our DoD contract to develop TKM-Ebola;
|
|
·
|
revenues earned from our collaborative partnerships and licensing agreements, including milestone payments from Alnylam and royalties from sales of Marqibo from Spectrum;
|
|
·
|
the extent to which we continue the development of our product candidates, add new product candidates to our pipeline, or form collaborative relationships to advance our products;
|
|
·
|
our decisions to in-license or acquire additional products or technology for development, in particular for our RNAi therapeutics programs;
|
|
·
|
our ability to attract and retain corporate partners, and their effectiveness in carrying out the development and ultimate commercialization of our product candidates;
|
|
·
|
whether batches of drugs that we manufacture fail to meet specifications resulting in delays and investigational and remanufacturing costs;
|
|
·
|
the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and products;
|
|
·
|
competing technological and market developments; and
|
|
·
|
prosecuting and enforcing our patent claims and other intellectual property rights.
|
(in millions $)
|
Payments Due by Period
|
|||||||||||||||||||
Total
|
Less
than 1 year
|
1 – 3
years
|
4 – 5
years
|
After 5
years
|
||||||||||||||||
Contractual Obligations
|
||||||||||||||||||||
Facility lease
|
0.7 | 0.7 | — | — | — | |||||||||||||||
Technology license obligations
(1)
|
1.3 | 1.3 | — | — | — | |||||||||||||||
Total contractual obligations
|
2.0 | 2.0 | — | — | — |
Quantitative and Qualitative Disclosures about Market Risk
|
Financial Statements and Supplementary Data
|
Page
|
||
|
||
|
||
|
||
|
||
|
||
|
December 31
2013
|
December 31
2012
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 68,716,531 | 47,024,124 | |||||
Accounts receivable
|
116,556 | 1,074,891 | ||||||
Accrued revenue
|
212,384 | 2,373,881 | ||||||
Deferred expenses
|
172,952 | 431,410 | ||||||
Investment tax credits receivable
|
40,200 | 9,875 | ||||||
Prepaid expenses and other assets
|
1,084,030 | 329,280 | ||||||
Total current assets
|
70,342,653 | 51,243,461 | ||||||
Property and equipment (note 4)
|
13,038,751 | 13,188,186 | ||||||
Less accumulated depreciation (note 4)
|
(11,665,594 | ) | (11,836,456 | ) | ||||
Property and equipment, net of accumulated
depreciation (note 4)
|
1,373,157 | 1,351,730 | ||||||
Total assets
|
$ | 71,715,810 | $ | 52,595,191 | ||||
Liabilities and stockholders' equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities (note 10)
|
$ | 3,680,462 | 3,795,546 | |||||
Deferred revenue (note 3)
|
3,463,255 | 3,143,580 | ||||||
Warrants (note 2 and 5)
|
5,378,772 | 4,014,821 | ||||||
Total current liabilities
|
12,522,489 | 10,953,947 | ||||||
Deferred revenue, net of current portion (note 3)
|
- | 722,445 | ||||||
Total liabilities
|
12,522,489 | 11,676,392 | ||||||
Stockholders’ equity:
|
||||||||
Common shares (note 5)
|
||||||||
Authorized - unlimited number with no par value
|
||||||||
Issued and outstanding:
19,048,900 (December 31, 2012 - 14,305,356)
|
216,701,859 | 181,785,818 | ||||||
Additional paid-in capital
|
25,343,481 | 24,786,028 | ||||||
Deficit
|
(167,026,633 | ) | (152,962,407 | ) | ||||
Accumulated other comprehensive income (loss)
|
(15,825,386 | ) | (12,690,640 | ) | ||||
Total stockholders' equity
|
59,193,321 | 40,918,799 | ||||||
Total liabilities and stockholders' equity
|
$ | 71,715,810 | $ | 52,595,191 |
Year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Revenue (note 3)
|
||||||||||||
Collaborations and contracts
|
$ | 10,424,569 | $ | 12,105,186 | $ | 16,311,590 | ||||||
Licensing fees, milestone and
royalty payments
|
5,039,581 | 2,000,000 | 500,000 | |||||||||
Total revenue
|
15,464,150 | 14,105,186 | 16,811,590 | |||||||||
Expenses
|
||||||||||||
Research, development, collaborations
and contracts
|
21,458,258 | 18,043,356 | 20,131,922 | |||||||||
General and administrative
|
5,546,273 | 8,140,779 | 6,386,386 | |||||||||
Depreciation of property and equipment
|
612,837 | 865,599 | 986,932 | |||||||||
Total expenses
|
27,617,368 | 27,049,734 | 27,505,240 | |||||||||
Loss from operations
|
(12,153,218 | ) | (12,944,548 | ) | (10,693,650 | ) | ||||||
Other income (losses)
|
||||||||||||
Interest income
|
539,996 | 138,320 | 126,314 | |||||||||
Licensing settlement payment (note 3(b))
|
- | 65,000,000 | - | |||||||||
Licensing settlement legal fees (note 3(b))
|
- | (18,737,966 | ) | - | ||||||||
Foreign exchange gains (losses)
|
1,079,310 | 24,855 | (14,692 | ) | ||||||||
Warrant issuance costs (note 5)
|
- | (47,030 | ) | (80,937 | ) | |||||||
(Increase) decrease in fair value of warrant liability (note 2)
|
(3,530,314 | ) | (3,821,635 | ) | 579,474 | |||||||
Net income (loss)
|
$ | (14,064,226 | ) | $ | 29,611,996 | $ | (10,083,491 | ) | ||||
Income (loss) per common share (note 2)
|
||||||||||||
Basic
|
$ | (0.92 | ) | $ | 2.16 | $ | (0.89 | ) | ||||
Diluted
|
$ | (0.92 | ) | $ | 2.07 | $ | (0.89 | ) | ||||
Weighted average number of common shares
|
||||||||||||
Basic
|
15,302,680 | 13,727,925 | 11,318,766 | |||||||||
Diluted
|
15,302,680 | 14,320,814 | 11,318,766 | |||||||||
Comprehensive income (loss)
|
||||||||||||
Cumulative translation adjustment
|
(3,134,746 | ) | 473,825 | (53,066 | ) | |||||||
Comprehensive income (loss)
|
$ | (17,198,972 | ) | $ | 30,085,821 | $ | (10,136,557 | ) |
Additional |
Accumulated
|
Total
|
||||||||||||||||||||||
Number
|
Share
|
paid-in
|
|
other comprehensive
|
stockholders'
|
|||||||||||||||||||
of shares
|
capital
|
capital
|
Deficit
|
income (loss)
|
equity
|
|||||||||||||||||||
Balance, December 31, 2010
|
10,338,702 | $ | 172,982,011 | $ | 23,410,834 | $ | (172,490,912 | ) | $ | (13,111,399 | ) | $ | 10,790,534 | |||||||||||
Stock-based compensation
|
- | - | 633,449 | - | - | 633,449 | ||||||||||||||||||
Issuance of common shares
pursuant to exercise of options
|
20,033 | 128,371 | (117,586 | ) | - | - | 10,785 | |||||||||||||||||
Issuance of common shares in conjunction with the
public offering, net of issuance costs of $481,135 and net of initial fair value of warrants of $751,505
|
1,789,900 | 3,928,294 | - | - | - | 3,928,294 | ||||||||||||||||||
Currency translation adjustment
|
- | - | - | - | (53,066 | ) | (53,066 | ) | ||||||||||||||||
Net loss
|
- | - | - | (10,083,491 | ) | - | (10,083,491 | ) | ||||||||||||||||
Balance, December 31, 2011
|
12,148,635 | $ | 177,038,676 | $ | 23,926,697 | $ | (182,574,403 | ) | $ | (13,164,465 | ) | $ | 5,226,505 | |||||||||||
Stock-based compensation
|
- | - | 982,290 | - | - | 982,290 | ||||||||||||||||||
Issuance of common shares
pursuant to exercise of options
|
38,635 | 194,050 | (122,959 | ) | - | - | 71,091 | |||||||||||||||||
Issuance of common shares
pursuant to exercise of warrants
|
269,485 | 1,512,973 | - | - | - | 1,512,973 | ||||||||||||||||||
Issuance of common shares in conjunction with the
private offering, net of issuance costs of $178,521 and net of initial fair value of warrants of $850,907
|
1,848,601 | 3,040,119 | - | - | - | 3,040,119 | ||||||||||||||||||
Currency translation adjustment
|
- | - | - | - | 473,825 | 473,825 | ||||||||||||||||||
Net income
|
- | - | - | 29,611,996 | - | 29,611,996 | ||||||||||||||||||
Balance, December 31, 2012
|
14,305,356 | $ | 181,785,818 | $ | 24,786,028 | $ | (152,962,407 | ) | $ | (12,690,640 | ) | $ | 40,918,799 | |||||||||||
Stock-based compensation
|
- | - | 903,005 | - | - | 903,005 | ||||||||||||||||||
Issuance of common shares
pursuant to exercise of options
|
125,596 | 734,872 | (345,552 | ) | - | - | 389,320 | |||||||||||||||||
|
||||||||||||||||||||||||
Issuance of common shares
pursuant to exercise of warrants
|
305,448 | 2,142,852 | - | - | - | 2,142,852 | ||||||||||||||||||
Issuance of common shares in conjunction with the
private offering, net of issuance costs of $2,461,683
|
4,312,500 | 32,038,317 | - | - | - | 32,038,317 | ||||||||||||||||||
Currency translation adjustment
|
- | - | - | - | (3,134,746 | ) | (3,134,746 | ) | ||||||||||||||||
Net loss
|
- | - | - | (14,064,226 | ) | - | (14,064,226 | ) | ||||||||||||||||
Balance, December 31, 2013
|
19,048,900 | $ | 216,701,859 | $ | 25,343,481 | $ | (167,026,633 | ) | $ | (15,825,386 | ) | $ | 59,193,321 |
Year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Income (loss) for the year
|
$ | (14,064,226 | ) | $ | 29,611,996 | $ | (10,083,491 | ) | ||||
Items not involving cash:
|
||||||||||||
Depreciation of property and equipment
|
612,837 | 865,599 | 986,932 | |||||||||
Stock-based compensation expense
|
903,005 | 982,290 | 633,449 | |||||||||
Unrealized foreign exchange (gains) losses
|
(18,119 | ) | 29,292 | (20,331 | ) | |||||||
Warrant issuance costs
|
- | 47,030 | 80,937 | |||||||||
Change in fair value of warrant liability
|
3,530,314 | 3,821,635 | (579,474 | ) | ||||||||
Fair value of warrants issued in conjunction with debt facility
|
- | - | 35,414 | |||||||||
Net change in non-cash operating items:
|
||||||||||||
Accounts receivable
|
888,929 | (189,707 | ) | 2,397,321 | ||||||||
Accrued revenue
|
2,008,215 | (2,187,580 | ) | 621,552 | ||||||||
Deferred expenses
|
230,602 | 360,720 | (226,999 | ) | ||||||||
Investment tax credits receivable
|
(30,963 | ) | 322,845 | 71,336 | ||||||||
Inventory
|
- | - | 148,214 | |||||||||
Prepaid expenses and other assets
|
(776,012 | ) | 97,272 | (107,504 | ) | |||||||
Accounts payable and accrued liabilities
|
129,997 | (197,265 | ) | (2,142,976 | ) | |||||||
Deferred revenue
|
(153,138 | ) | (655,344 | ) | 354,662 | |||||||
Net cash (used in) operating activities
|
(6,738,559 | ) | 32,908,783 | (7,830,958 | ) | |||||||
INVESTING ACTIVITIES
|
||||||||||||
Proceeds from sale of property and equipment
|
- | 2,503 | - | |||||||||
Acquisition of property and equipment
|
(725,100 | ) | (14,900 | ) | (60,378 | ) | ||||||
Net cash used in investing activities
|
(725,100 | ) | (12,397 | ) | (60,378 | ) | ||||||
FINANCING ACTIVITIES
|
||||||||||||
Proceeds from issuance of common shares and warrants, net of issuance costs
|
32,038,317 | 3,843,996 | 4,598,862 | |||||||||
Issuance of common shares pursuant to exercise of options
|
389,320 | 71,091 | 10,786 | |||||||||
Issuance of common shares pursuant to exercise of warrants
|
288,824 | 632,282 | - | |||||||||
Net cash provided by financing activities
|
32,716,461 | 4,547,369 | 4,609,648 | |||||||||
Effect of foreign exchange rate changes on cash & cash equivalents
|
(3,560,395 | ) | 549,610 | (100,232 | ) | |||||||
Increase (decrease) in cash and cash equivalents
|
21,692,407 | 37,993,365 | (3,381,920 | ) | ||||||||
Cash and cash equivalents, beginning of year
|
47,024,124 | 9,030,759 | 12,412,678 | |||||||||
Cash and cash equivalents, end of year
|
$ | 68,716,531 | $ | 47,024,124 | $ | 9,030,759 | ||||||
Supplemental cash flow information
|
||||||||||||
Fair value of warrants exercised on a cashless basis
|
$ | 1,404,349 | $ | 210,680 | $ | - | ||||||
Investment tax credits received
|
$ | 9,875 | $ | 322,720 | $ | 103,664 | ||||||
Fair value of warrants issued in conjunction with public offering
|
$ | - | $ | 850,907 | $ | 751,505 | ||||||
Fair value of warrants issued in conjunction with debt facility
|
$ | - | $ | - | $ | 35,414 |
2.
|
Significant accounting policies
|
•
|
Level 1 inputs are quoted market prices for identical instruments available in active markets.
|
•
|
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly. If the asset or liability has a contractual term, the input must be observable for substantially the full term. An example includes quoted market prices for similar assets or liabilities in active markets.
|
•
|
Level 3 inputs are unobservable inputs for the asset or liability and will reflect management’s assumptions about market assumptions that would be used to price the asset or liability.
|
Level 1
|
Level 2
|
Level 3
|
December 31, 2013
|
|||||||||||||
Assets
|
||||||||||||||||
Cash
|
$ | 68,716,531 | - | - | $ | 68,716,531 | ||||||||||
Guaranteed Investment Certificates
|
- | - | - | - | ||||||||||||
Total
|
$ | 68,716,531 | - | - | $ | 68,716,531 | ||||||||||
Liabilities
|
||||||||||||||||
Warrants
|
$ | - | - | $ | 5,378,772 | $ | 5,378,772 |
Level 1
|
Level 2
|
Level 3
|
December 31, 2012
|
|||||||||||||
Assets
|
||||||||||||||||
Cash
|
$ | 44,373,720 | - | - | $ | 44,373,720 | ||||||||||
Guaranteed Investment Certificates
|
2,650,404 | - | - | 2,650,404 | ||||||||||||
Total
|
$ | 47,024,124 | - | - | $ | 47,024,124 | ||||||||||
Liabilities
|
||||||||||||||||
Warrants
|
$ | - | - | $ | 4,014,821 | $ | 4,014,821 |
Liability at
beginning
of the year
|
Opening
liability of
warrants issued in
the year
|
Fair value of
warrants
exercised
in the
year
|
Increase
(decrease) in
value of
warrants
|
Foreign
exchange
(gain) loss
|
Liability
at end
of the year
|
|||||||||||||||||||
Year ended December 31, 2011
|
$ | - | $ | 786,919 | $ | - | $ | (579,474 | ) | $ | (5,825 | ) | $ | 201,620 | ||||||||||
Year ended December 31, 2012
|
$ | 201,620 | $ | 850,907 | $ | (880,691 | ) | $ | 3,821,635 | $ | 21,350 | $ | 4,014,821 | |||||||||||
Year ended December 31, 2013
|
$ | 4,014,821 | $ | - | $ | (1,854,028 | ) | $ | 3,530,314 | $ | (312,335 | ) | $ | 5,378,772 |
Rate
|
||||
Laboratory equipment (years)
|
5 | |||
Computer and office equipment (years)
|
2 | - | 5 | |
Furniture and fixtures (years)
|
5 |
Year ended December 31 | ||||||||||||
2013
|
2012
|
2011
|
||||||||||
Numerator:
|
||||||||||||
Net income (loss)
|
$ | (14,064,226 | ) | $ | 29,611,996 | $ | (10,083,491 | ) | ||||
Denominator:
|
||||||||||||
Weighted average number of common shares
|
15,302,680 | 13,727,925 | 11,318,766 | |||||||||
Effect of dilutive securities:
|
||||||||||||
Warrants
|
- | 177,374 | - | |||||||||
Options
|
- | 415,515 | - | |||||||||
Diluted weighted average number of common shares
|
15,302,680 | 14,320,814 | 11,318,766 | |||||||||
Basic income (loss) per common share
|
$ | (0.92 | ) | $ | 2.16 | $ | (0.89 | ) | ||||
Diluted income (loss) per common share
|
$ | (0.92 | ) | $ | 2.07 | $ | (0.89 | ) |
3.
|
Collaborations, contracts and licensing agreements
|
Year ended December 31 | ||||||||||||
2013
|
2012
|
2011
|
||||||||||
Collaborations and contracts
|
||||||||||||
DoD (a)
|
$ | 9,805,556 | $ | 11,536,101 | $ | 11,565,997 | ||||||
Alnylam (b)
|
- | 9,719 | 4,191,295 | |||||||||
BMS (c)
|
525,527 | 440,279 | 437,165 | |||||||||
Other RNAi collaborators (d)
|
93,486 | 119,087 | 117,133 | |||||||||
Total research and development collaborations and contracts
|
10,424,569 | 12,105,186 | 16,311,590 | |||||||||
Licensing fees and milestone payments
|
||||||||||||
Alnylam milestone payments (b)
|
5,000,000 | 1,000,000 | 500,000 | |||||||||
Spectrum payments (e)
|
39,581 | 1,000,000 | - | |||||||||
Total licensing fees and milestone payments
|
5,039,581 | 2,000,000 | 500,000 | |||||||||
Total revenue
|
$ | 15,464,150 | $ | 14,105,186 | $ | 16,811,590 |
December 31, 2013
|
December 31, 2012
|
|||||||
DoD (a)
|
$ | 1,655,028 | $ | 1,388,970 | ||||
BMS current portion (c)
|
1,808,227 | 1,754,610 | ||||||
Deferred revenue, current portion
|
3,463,255 | 3,143,580 | ||||||
BMS long-term portion (c)
|
- | 722,445 | ||||||
Total deferred revenue
|
$ | 3,463,255 | $ | 3,866,025 |
4.
|
Property and equipment
|
December 31, 2013
|
Cost
|
Accumulated
depreciation
|
Net
book value
|
|||||||||
Lab equipment
|
$ | 4,885,963 | $ | (4,678,976 | ) | $ | 206,987 | |||||
Leashold improvements
|
5,592,312 | (5,001,683 | ) | $ | 590,629 | |||||||
Computer hardware and software
|
1,991,927 | (1,589,519 | ) | $ | 402,408 | |||||||
Furniture and fixtures
|
395,948 | (395,416 | ) | $ | 532 | |||||||
Assets under construction
|
172,601 | - | $ | 172,601 | ||||||||
$ | 13,038,751 | $ | (11,665,594 | ) | $ | 1,373,157 |
December 31, 2012
|
Cost
|
Accumulated
depreciation
|
Net
book value
|
|||||||||
Lab equipment
|
$ | 5,136,975 | $ | (4,787,905 | ) | $ | 349,070 | |||||
Leasehold improvements
|
5,978,338 | (5,041,900 | ) | 936,438 | ||||||||
Computer hardware and software
|
1,649,593 | (1,585,288 | ) | 64,305 | ||||||||
Furniture and fixtures
|
423,281 | (421,363 | ) | 1,918 | ||||||||
$ | 13,188,187 | $ | (11,836,456 | ) | $ | 1,351,731 |
5.
|
Share capital
|
Common shares
purchasable upon
exercise of
warrants
|
Weighted average
exercise price (C$)
|
Weighted
average exercise
price (US$)
|
Range of
exercise prices
(C$)
|
Range of
exercise prices
(US$)
|
Weighted
average
remaining
contractual life
(years)
|
Aggregate
intrinsic value
(C$)
|
Aggregate
intrinsic value
(US$)
|
|||||||||||||||||||||||||||
Balance, December 31, 2011
|
949,495 | $ | 3.25 | $ | 3.20 | $1.65 | - | $3.35 | $1.62 | - | $3.29 | 4.6 | $ | - | $ | - | ||||||||||||||||||
Issued
|
924,302 | $ | 2.60 | $ | 2.61 | $2.60 | $2.61 | |||||||||||||||||||||||||||
Exercised
|
(285,386 | ) | $ | 2.53 | $ | 2.54 | $1.65 | - | $3.35 | $1.66 | - | $3.37 | ||||||||||||||||||||||
Balance, December 31, 2012
|
1,588,411 | $ | 3.00 | $ | 3.02 | $2.50 | - | $3.35 | $2.51 | - | $3.37 | 3.8 | 3,140,893 | 3,156,912 | ||||||||||||||||||||
Issued
|
- | - | - | - | - | |||||||||||||||||||||||||||||
Exercised
|
(573,683 | ) | $ | 3.19 | $ | 3.00 | $2.60 | - | $3.35 | $2.44 | - | $3.15 | - | |||||||||||||||||||||
Balance, December 31, 2013
|
1,014,728 | $ | 2.90 | $ | 2.72 | $2.60 | - | $3.35 | $2.44 | - | $3.15 | 2.7 | $ | 5,635,446 | $ | 5,298,447 |
Year ended December 31
|
||||||||
2013
|
2012
|
|||||||
Dividend yield
|
0.00 | % | 0.00 | % | ||||
Expected volatility
|
47.03 | % | 40.00 | % | ||||
Risk-free interest rate
|
1.13 | % | 1.28 | % | ||||
Expected average term (years)
|
1.6
|
3.8
|
||||||
Fair value of warrants outstanding
|
$ | 5.30 | $ | 2.51 | ||||
Aggregate fair value of warrants outstanding
|
$ | 5,378,722 | $ | 4,014,821 |
Number of
optioned
common shares
|
Weighted
average exercise
price (C$)
|
Weighted
average exercise
price (US$)
|
Aggregate
intrinsic
value (C$)
|
Aggregate
intrinsic
value (US$)
|
||||||||||||||||
Balance, December 31, 2010
|
1,083,432 | $ | 7.95 | $ | 7.72 | $ | 756,628 | $ | 734,881 | |||||||||||
Options granted
|
403,100 | $ | 2.14 | $ | 2.17 | |||||||||||||||
Options exercised
|
(1,667 | ) | $ | 1.50 | $ | 1.52 | $ | 1,330 | $ | 1,346 | ||||||||||
Options forfeited, cancelled or expired
|
(71,547 | ) | $ | 27.42 | $ | 27.74 | ||||||||||||||
Balance, December 31, 2011
|
1,413,318 | $ | 5.32 | $ | 5.38 | $ | 1,800 | $ | 1,821 | |||||||||||
Options granted
|
326,300 | $ | 4.16 | $ | 4.16 | |||||||||||||||
Options exercised
|
(28,417 | ) | $ | 2.34 | $ | 2.34 | $ | 81,545 | $ | 81,598 | ||||||||||
Options forfeited, cancelled or expired
|
(62,355 | ) | $ | 21.27 | $ | 21.29 | ||||||||||||||
Balance, December 31, 2012
|
1,648,846 | $ | 4.54 | $ | 4.54 | $ | 2,299,512 | $ | 2,300,996 | |||||||||||
Options granted
|
270,250 | $ | 7.52 | $ | 7.30 | |||||||||||||||
Options exercised
|
(124,246 | ) | $ | 3.22 | $ | 3.13 | $ | 551,385 | $ | 535,369 | ||||||||||
Options forfeited, cancelled or expired
|
(64,085 | ) | $ | 21.87 | $ | 21.23 | ||||||||||||||
Balance, December 31, 2013
|
1,730,765 | $ | 4.45 | $ | 4.32 | $ | 7,029,795 | $ | 6,825,608 |
Options outstanding December 31, 2013
|
Options exercisable December 31, 2013
|
||||||||||||||||||||||||||||||
Range of
Exercise prices
|
Number
of options
outstanding
|
Weighted
average
remaining
contractual
life (years)
|
Weighted
average
exercise
price (C$)
|
Weighted
average
exercise
price (US$)
|
Number
of options
exercisable
|
Weighted
average
exercise
price (C$)
|
Weighted
average
exercise
price (US$)
|
||||||||||||||||||||||||
$1.50 | to | $1.90 | 261,475 | 6.7 | $ | 1.71 | $ | 1.66 | 236,475 | $ | 1.71 | $ | 1.66 | ||||||||||||||||||
$2.10 | to | $2.60 | 279,000 | 7.7 | $ | 2.32 | $ | 2.25 | 236,175 | $ | 2.35 | $ | 2.28 | ||||||||||||||||||
$3.00 | to | $3.10 | 108,979 | 2.2 | $ | 3.04 | $ | 2.95 | 108,979 | $ | 3.04 | $ | 2.95 | ||||||||||||||||||
$3.73 | to | $3.85 | 153,250 | 6.1 | $ | 3.84 | $ | 3.73 | 150,650 | $ | 3.85 | $ | 3.74 | ||||||||||||||||||
$4.38 | to | $4.54 | 21,250 | 9.2 | $ | 4.53 | $ | 4.40 | 5,313 | $ | 4.53 | $ | 4.40 | ||||||||||||||||||
$4.65 | to | $5.60 | 576,846 | 6.2 | $ | 5.25 | $ | 5.10 | 474,909 | $ | 5.27 | $ | 5.12 | ||||||||||||||||||
$5.69 | to | $11.60 | 329,965 | 7.6 | $ | 7.79 | $ | 7.56 | 164,590 | $ | 7.45 | $ | 7.23 | ||||||||||||||||||
$1.50 | to | $11.60 | 1,730,765 | 6.6 | $ | 4.45 | $ | 4.32 | 1,377,091 | $ | 4.08 | $ | 3.96 |
Number of
optioned
common shares
|
Weighted
average
fair value (C$)
|
Weighted
average
fair value (US$)
|
||||||||||
Non-vested at December 31, 2012
|
333,691 | $ | 3.38 | $ | 3.38 | |||||||
Options granted
|
270,250 | $ | 7.52 | 7.30 | ||||||||
Options vested
|
(219,966 | ) | $ | 4.47 | 4.34 | |||||||
Non-vested options forfeited
|
(30,300 | ) | $ | 3.74 | 3.63 | |||||||
Non-vested at December 31, 2013
|
353,675 | $ | 5.44 | $ | 5.28 |
Year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Dividend yield
|
0.00 | % | 0.00 | % | 0.00 | % | ||||||
Expected volatility
|
111.61 | % | 120.40 | % | 116.26 | % | ||||||
Risk-free interest rate
|
2.39 | % | 1.56 | % | 2.51 | % | ||||||
Expected average option term (years)
|
9.6 | 8.2 | 9.6 | |||||||||
Fair value of options granted (C$)
|
$ | 6.96 | $ | 3.83 | $ | 2.00 |
Year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Research, development, collaborations
and contracts expenses
|
$ | 621,807 | $ | 772,367 | $ | 500,425 | ||||||
General and administrative expenses
|
281,198 | 209,923 | 133,024 | |||||||||
Total
|
$ | 903,005 | $ | 982,290 | $ | 633,449 |
Number of Protiva
Options
|
Equivalent number
of Company
common shares
|
Weighted
average exercise
price (C$)
|
Weighted
average
exercise price
(US$)
|
|||||||||||||
Balance, December 31, 2010
|
518,223 | 349,883 | 0.30 | 0.30 | ||||||||||||
Options exercised
|
(27,202 | ) | (18,366 | ) | 0.30 | 0.30 | ||||||||||
Options forfeited, cancelled or expired
|
- | - | - | - | ||||||||||||
Balance, December 31, 2011
|
491,020 | 331,517 | 0.30 | 0.30 | ||||||||||||
Options exercised
|
(15,135 | ) | (10,218 | ) | 0.30 | 0.30 | ||||||||||
Options forfeited, cancelled or expired
|
- | - | - | - | ||||||||||||
Balance, December 31, 2012
|
475,885 | 321,299 | $ | 0.30 | $ | 0.30 | ||||||||||
Options exercised
|
(2,000 | ) | (1,350 | ) | 0.30 | 0.29 | ||||||||||
Options forfeited, cancelled or expired
|
(1,000 | ) | (675 | ) | 0.30 | 0.29 | ||||||||||
Balance, December 31, 2013
|
472,885 | 319,274 | 0.30 | 0.29 |
6.
|
Government grants and refundable investment tax credits
|
7.
|
Income taxes
|
Year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Computed taxes (recoveries) at Canadian
federal and provincial tax rates
|
$ | (2,380,267 | ) | $ | 7,486,268 | $ | (2,589,310 | ) | ||||
Differences due to change in enacted tax rates
|
(5,723 | ) | 780,963 | 700,342 | ||||||||
Difference due to change in tax rate on opening deferred taxes
|
- | 2,636,377 | 3,369,825 | |||||||||
Permanent and other differences
|
1,820,842 | 2,202,291 | 141,587 | |||||||||
Change in valuation allowance
|
565,147 | (2,515,765 | ) | (1,622,445 | ) | |||||||
Utilization of investment tax credits
|
- | (10,590,133 | ) | - | ||||||||
Income tax (recovery) expense
|
$ | - | $ | - | $ | - |
Year ended December 31
|
||||||||
2013
|
2012
|
|||||||
Deferred tax assets:
|
||||||||
Non-capital loss carryforwards
|
$ | 4,354,066 | $ | 4,561,144 | ||||
Research and development deductions
|
8,858,564 | 8,583,554 | ||||||
Book amortization in excess of tax
|
2,170,922 | 1,934,818 | ||||||
Share issue costs
|
(136,329 | ) | (26,133 | ) | ||||
Revenue recognized for tax purposes in excess of
revenue recognized for accounting purposes
|
667,542 | - | ||||||
Tax value in excess of accounting value in lease inducements
|
(2,821 | ) | 8,041 | |||||
Accounting value in excess of tax value in intangible assets
|
- | 372,892 | ||||||
Provincial investment tax credits
|
392,063 | 304,545 | ||||||
Total deferred tax assets
|
16,304,008 | 15,738,861 | ||||||
Valuation allowance
|
(16,304,008 | ) | (15,738,861 | ) | ||||
Net deferred tax assets
|
$ | - | $ | - |
8.
|
Contingencies and commitments
|
9.
|
Concentrations of business risk
|
December 31, 2013
|
December 31, 2012
|
|||||||
Cash, cash equivalents and short term investments
|
$ | 68,716,531 | $ | 47,024,124 | ||||
Less: Accounts payable and accrued liabilities
|
(3,680,462 | ) | (3,795,546 | ) | ||||
$ | 65,036,069 | $ | 43,228,578 |
(in C$)
|
December 31, 2013
|
December 31, 2012
|
||||||
Cash and cash equivalents
|
$ | 38,900,944 | $ | 149,058 | ||||
Accounts receivable
|
10,840 | 1,025,306 | ||||||
Accrued revenue
|
225,892 | 2,361,836 | ||||||
Accounts payable and accrued liabilities
|
(1,889,480 | ) | (2,969,454 | ) | ||||
$ | 37,248,196 | $ | 566,746 |
December 31, 2013
|
December 31, 2012
|
|||||||
Trade accounts payable
|
$ | 1,217,242 | $ | 805,790 | ||||
Research and development accruals
|
1,404,905 | 310,492 | ||||||
License fee accruals
|
- | 1,649,957 | ||||||
Professional fee accruals
|
247,148 | 602,113 | ||||||
Deferred lease inducements
|
16,454 | 48,078 | ||||||
Other accrued liabilities
|
794,713 | 379,116 | ||||||
$ | 3,680,462 | $ | 3,795,546 |
11.
|
Subsequent events
|
2013
|
||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 |
Total
|
||||||||||||||||
Revenue
|
2,131,519 | 2,843,806 | 2,962,809 | 7,526,016 | 15,464,150 | |||||||||||||||
Loss from operations
|
(2,993,811 | ) | (3,070,968 | ) | (3,652,191 | ) | (2,436,248 | ) | (12,153,218 | ) | ||||||||||
Net loss
|
(2,546,244 | ) | (3,014,928 | ) | (5,905,923 | ) | (2,597,131 | ) | (14,064,226 | ) | ||||||||||
Basic and diluted net loss per share
|
$ | (0.18 | ) | $ | (0.21 | ) | $ | (0.41 | ) | $ | (0.15 | ) | $ | (0.92 | ) |
2012
|
||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 |
Total
|
||||||||||||||||
Revenue
|
3,586,970 | 3,643,296 | 3,067,593 | 3,807,327 | 14,105,186 | |||||||||||||||
Loss from operations
|
(2,651,931 | ) | (2,599,027 | ) | (1,784,666 | ) | (5,908,924 | ) | (12,944,548 | ) | ||||||||||
Net (loss) income
|
(3,180,259 | ) | (1,935,761 | ) | (3,457,600 | ) | 38,185,616 | 29,611,996 | ||||||||||||
Basic net (loss) income per share
|
$ | (0.25 | ) | $ | (0.14 | ) | $ | (0.25 | ) | $ | 2.72 | $ | 2.16 | |||||||
Diluted net (loss) income per share
|
$ | (0.25 | ) | $ | (0.14 | ) | $ | (0.25 | ) | $ | 2.51 | $ | 2.07 |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Controls and Procedures
|
Other Information
|
Directors, Executive Officers and Corporate Governance
|
Name
|
|
Age
|
Residence
|
|
Position
|
Michael Abrams
(1)
|
|
57
|
Custer, Washington, U.S.A.
|
|
Executive Vice President, Chief Discovery Officer
|
Bruce Cousins
(5)
|
53
|
Victoria, British Columbia, Canada
|
Executive Vice President, Chief Financial Officer
|
||
Kenneth Galbraith
(2)(4)
|
|
51
|
Surrey, British Columbia, Canada
|
|
Director
|
Donald Jewell
(2) (3)
|
|
60
|
West Vancouver, British Columbia, Canada
|
|
Director
|
Frank Karbe
(2)
|
|
45
|
Mill Valley, California, U.S.A.
|
|
Director
|
Daniel Kisner
(3)(4)
|
|
67
|
Rancho Santa Fe, California, U.S.A.
|
|
Director (Chairman)
|
Mark Kowalski
(6)
|
59
|
Boston, Massachusetts, U.S.A.
|
Senior Vice President, Chief Medical Officer
|
||
Ian MacLachlan
|
|
50
|
Mission, British Columbia, Canada
|
|
Executive Vice President and Chief Technical Officer
|
Mark Murray
|
|
65
|
Seattle, Washington, U.S.A.
|
|
President, Chief Executive Officer and Director
|
Peggy Phillips
(1)(3)
|
|
60
|
Seattle, Washington, U.S.A.
|
|
Director
|
(1)
|
Ms. Phillips was appointed as a Director on February 12, 2014 to replace Dr. Abrams, who joined the Company as Chief Discovery Officer in January 2014.
|
(2)
|
Member of Audit Committee.
|
(3)
|
Member of Executive Compensation and Human Resources Committee.
|
(4)
|
Member of Corporate Governance and Nominating Committee.
|
(5)
|
Mr. Cousins was appointed Executive Vice President and Chief Financial Officer, effective October 7, 2013.
|
(6)
|
Mr. Kowalski was appointed Senior Vice President and Chief Medical Officer, effective August 12, 2013.
|
Director Name,
Position with
the Company, and
Residency
|
Period as a
Director of the
Company
|
Principal Occupation
for the Past Five Years
|
Other Public Company
Directorships Currently
Held or Held during the
Past Five Years
|
Kenneth Galbraith
Director
British Columbia, Canada
|
Since Jan. 28, 2010
|
Five Corners Capital (Sept. 2013 – present)
General Partner at Ventures West (Feb. 2007 – Sept. 2013
|
MacroGenics Inc.
(Oct. 2013- present)
|
Donald Jewell
(1)
Director
British Columbia
,
Canada
|
Since May 30, 2008
|
Managing Partner, RIO Industrial (financial management services) (Aug. 1995-present)
|
Rogers Sugar/Lantic
(Sept. 2003 – Jan. 2013)
|
Frank Karbe
Director
California, U.S.A.
|
Since Jan. 28, 2010
|
Chief Financial Officer of Exelixis, Inc. (Jan. 2004-present)
|
n/a
|
Director Name,
Position with
the Company, and
Residency
|
Period as a
Director of the
Company
|
Principal Occupation
for the Past Five Years
|
Other Public Company
Directorships Currently
Held or Held during the
Past Five Years
|
Daniel Kisner
Director and Board Chair
California, U.S.A.
|
Since Jan. 28, 2010
|
Independent Consultant
(Sept. 2010 to present)
Partner at Aberdare Ventures (2003-September 2010)
|
Dynavax Technologies Corporation
(Jul. 2010 – present)
Lpath Incorporated
(Jun. 2012 - present)
Conatus Pharmaceuticals
(Feb. 2014 - present)
|
Mark Murray
(1)
Director, President and CEO
Washington, U.S.A.
|
Since May 30, 2008
|
President, Chief Executive Officer and Director of Tekmira (May 2008 – present);
President and Chief Executive Officer of Protiva Biotherapeutics Inc. (2000-present)
|
n/a
|
Peggy Phillips
Director
Washington, U.S.A.
|
Since Feb. 12, 2014
|
Independent Consultant
(Previously Chief Operating Officer of Immunex Corporation)
|
Dynavax Technologies Corporation
(Aug. 2006 - present)
|
(1)
|
Dr. Murray and Mr. Jewell were directors of Protiva before it was acquired by Tekmira on May 30, 2008.
|
•
|
Audit Committee Charter;
|
|
•
|
Corporate Governance and Nominating Committee Charter;
|
|
•
|
Executive Compensation and Human Resource Committee Charter;
|
|
•
•
•
•
|
Code of Conduct for Directors, Officers and Employees;
Whistleblower Policy;
Insider Trading Policy; and
Majority Voting Policy.
|
•
|
overseeing the work of the auditors engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company;
|
•
|
evaluating the performance, and assessing the qualifications, of our auditor and recommending to our Board of Directors the appointment of, and compensation for, our auditor for the purpose of preparing or issuing an auditor report or performing other audit, review or attest services;
|
•
|
subject to the appointment of our auditor in accordance with applicable corporate formalities, determining and approving the engagement of, and compensation to be paid to, our auditor;
|
•
|
determining and approving the engagement, prior to the commencement of such engagement, of, and compensation for, our auditor and to perform any proposed permissible non-audit services;
|
•
|
reviewing our financial statements and management’s discussion and analysis of financial condition and results of operations and recommending to our Board of Directors whether or not such financial statements and management’s discussion and analysis of financial condition and results of operations should be approved by our Board of Directors;
|
•
|
conferring with our auditor and with our management regarding the scope, adequacy and effectiveness of internal financial reporting controls in effect;
|
•
|
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and
|
|
•
|
reviewing and discussing with our management and auditor, as appropriate, our guidelines and policies with respect to risk assessment and risk management, including our major financial risk exposures and investment and hedging policies and the steps taken by our management to monitor and control these exposures.
|
•
|
reviewing and making recommendations to our Board of Directors for our chief executive officer and other executive officers: annual base salary; annual incentive bonus, including the specific goals and amount; equity compensation; employment agreements, severance arrangements and change in control agreements/provisions; and any other benefits, compensations, compensation policies or arrangements;
|
•
|
reviewing and making recommendations to our Board of Directors regarding our overall compensation plans and structure, including incentive compensation and equity based plans;
|
•
|
reviewing and making recommendations to our Board of Directors regarding the compensation to be paid to our non-employee directors, including any retainer, committee and committee chair fees and/or equity compensation;
|
•
|
reviewing any report to be included in our periodic filings or proxy statement; and
|
•
|
acting as administrator of our equity compensation plans.
|
•
|
establishing criteria for Board membership and identifying, evaluating, reviewing and recommending qualified candidates to serve on the Board;
|
•
|
evaluating, reviewing and considering the recommendation for nomination of incumbent directors for re-election to the Board;
|
•
|
periodically reviewing and assessing the performance of our Board, including Board committees;
|
•
|
developing and reviewing a set of corporate governance principles for Tekmira.
|
•
|
Honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
|
•
|
Full, fair, accurate, timely, and understandable disclosure in the reports that Tekmira is required to file with such securities exchange or quotation system or regulatory agency as may from time to time apply to Tekmira and in other public communications made by Tekmira;
|
•
|
Compliance with all applicable laws, rules and regulations.
|
Executive Compensation
|
•
|
to recruit and subsequently retain highly qualified executive officers by offering overall compensation which is competitive with that offered for comparable positions in other biotechnology companies;
|
•
|
to motivate executives to achieve important corporate performance objectives and reward them when such objectives are met; and
|
•
|
to align the interests of executive officers with the long-term interests of shareholders through participation in our stock-based compensation plan (the “2011 Plan”).
|
Aeterna Zentaris Inc. | Neuralstem Inc | |
AVI Biopharma Inc. | NovaBay Pharmaceuticals Inc | |
Celldex Therapeutics Inc. | OncoGeneX Pharmaceuticals Inc. |
Name and principal position
|
Year
|
Salary
(US$)
|
Salary
(C$)
|
Options
(US$)
(1)
|
Annual
incentive
cash
bonus
(US$)
|
All other
compensation
(US$)
(2)
|
Total
compensation
(US$)
|
|||||||||||||||||
Dr. Mark Murray
|
2013
|
377,500 |
NA
|
- | 160,359 | 43,792 | 581,651 | |||||||||||||||||
President and
|
2012
|
350,000 |
NA
|
165,768 | 347,984 | 62,040 | 925,792 | |||||||||||||||||
Chief Executive Officer
|
2011
|
350,000 |
NA
|
136,533 | - | 42,358 | 528,891 | |||||||||||||||||
Mr. Bruce Cousins
(3)
|
2013
|
69,480 | 71,558 | 1,247,159 | 24,318 | 2,085 | 1,343,040 | |||||||||||||||||
Executive Vice President, Finance
|
2012
|
- | - | - | - | - | - | |||||||||||||||||
and Chief Financial Officer
|
2011
|
- | - | - | - | - | - | |||||||||||||||||
Mr. Ian Mortimer
(4)
|
2013
|
262,351 | 270,199 | - | - | - | 262,351 | |||||||||||||||||
Executive Vice President, Finance
|
2012
|
285,184 | 285,000 | 118,405 | 285,184 | 8,556 | 697,329 | |||||||||||||||||
and Chief Financial Officer
|
2011
|
288,336 | 285,000 | 97,523 | - | - | 385,860 | |||||||||||||||||
Dr. Ian MacLachlan
|
2013
|
305,851 | 315,000 | - | 113,739 | 9,422 | 429,011 | |||||||||||||||||
Executive Vice President
|
2012
|
295,190 | 295,000 | 118,405 | 295,190 | 8,856 | 717,642 | |||||||||||||||||
and Chief Technical Officer
|
2011
|
298,454 | 295,000 | 97,523 | - | 1,456 | 397,433 | |||||||||||||||||
Dr. Mark Kowalski
(5)
|
2013
|
128,623 |
NA
|
261,819 | 36,240 | 3,859 | 430,541 | |||||||||||||||||
Senior Vice President
|
2012
|
- |
NA
|
- | - | - | - | |||||||||||||||||
and Chief Medical Officer
|
2011
|
- |
NA
|
- | - | - | - | |||||||||||||||||
Dr. Peter Lutwyche
|
2013
|
233,029 | 240,000 | - | 71,365 | 6,991 | 311,385 | |||||||||||||||||
Senior Vice President, Pharmaceutical
|
2012
|
225,145 | 225,000 | 94,724 | 157,602 | 6,754 | 484,225 | |||||||||||||||||
Development
|
2011
|
227,634 | 225,000 | 78,019 | - | - | 305,653 |
1.
|
The fair value of each option is estimated as at the date of grant using the most widely accepted option pricing model, Black-Scholes. The fair value of options computed on the grant date is in accordance with FASB ASC Topic 718. The weighted average option pricing assumptions and the resultant fair values for options awarded to Named Executive Officers in 2011 are as follows: expected average option term of ten years; a zero dividend yield; a weighted average expected volatility of 115.5%; and, a weighted average risk-free interest rate of 2.51%. The weighted average option pricing assumptions and the resultant fair values for options awarded to Named Executive Officers in 2012 are as follows: expected average option term of ten years; a zero dividend yield; a weighted average expected volatility of 121.5%; and, a weighted average risk-free interest rate of 1.46%. The weighted average option pricing assumptions and the resultant fair values for options awarded to Named Executive Officers for fiscal 2013 are as follows: expected average option term of ten years; a zero dividend yield; a weighted average expected volatility of 114.7%; and, a weighted average risk-free interest rate of 2.49%. Options awarded to the Named Executive Officers in February 2014 are not included in the above table.
|
2.
|
All other compensation in 2012 and 2013 includes Registered Retirement Savings Plan, or RRSP, or equivalent matching payments of 3% of salary. In 2012 and 2013 all of our full-time employees and executives were eligible for RRSP or equivalent matching payments. In 2011 RRSP match payments had been suspended to conserve cash. Dr. Murray’s other compensation also includes reimbursement of personal tax filing service fees up to a maximum of $10,000 per year. Dr. Murray’s and Dr. MacLachlan’s other compensation also includes amounts claimed under their contractual entitlement to reimbursement of any health expenses incurred, including their families’ health expenses, that are not covered by insurance.
|
3.
|
Mr. Cousins commenced employment with Tekmira in October 2013 with an annual salary of $286,762 (C$305,000) and was granted 150,000 new hire stock options at that time.
|
4.
|
Mr. Mortimer resigned from Tekmira in October 2013.
|
5.
|
Dr. Kowalski commenced employment in August 2013 with an annual salary of $325,000 and was granted 50,000 new hire stock options at that time.
|
Estimated Possible Payouts Under Non-
Equity Incentive Plan Awards(2)
|
Stock
Awards:
|
Option
Awards:
Number of
|
Exercise or
|
Grant Date
Fair Value of
|
|||||||||||||||||||||||||||
Name
|
Date of
Grant (1)
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Number of
Shares of
Stock(3)
|
Securities
Underlying
Options
|
Base Price of
Option
Awards ($)
|
Stock and
Option
Awards ($)(4)
|
|||||||||||||||||||||||
Bruce Cousins
|
10/7/13
|
$ | - | $ | - | $ | - | - | 150,000 | $ | 8.86 | $ | 1,247,159 | ||||||||||||||||||
Executive Vice President and Chief Financial Officer
|
|||||||||||||||||||||||||||||||
(from October 2013)
|
|||||||||||||||||||||||||||||||
Mark Kowalski, M.D., Ph.D.
|
8/12/13
|
$ | - | $ | - | $ | - | - | 50,000 | $ | 5.58 | $ | 261,819 | ||||||||||||||||||
Senior Vice President and Chief Medical Officer
|
|||||||||||||||||||||||||||||||
Mark Murray, Ph.D.
|
N/A | $ | - | $ | - | $ | - | - | - | $ | - | $ | - | ||||||||||||||||||
President and Chief Executive Officer
|
|||||||||||||||||||||||||||||||
Ian Mortimer
|
N/A | $ | - | $ | - | $ | - | - | - | $ | - | $ | - | ||||||||||||||||||
Executive Vice President and Chief Financial Officer
|
|||||||||||||||||||||||||||||||
(until October 2013)
|
|||||||||||||||||||||||||||||||
Ian MacLachlan, Ph.D.
|
N/A | $ | - | $ | - | $ | - | - | - | $ | - | $ | - | ||||||||||||||||||
Executive Vice President and Chief Medical Officer
|
|||||||||||||||||||||||||||||||
Peter Lutwyche, Ph.D.
|
N/A | $ | - | $ | - | $ | - | - | - | $ | - | $ | - | ||||||||||||||||||
Senior Vice President, Pharmaceutical Development
|
1.
|
The stock option awards reported in the 2013 Grants of Plan-Based Awards Table were granted pursuant to our Designated Plans.
|
2.
|
We do not have any non-equity incentive plans. A discretionary annual incentive cash bonus may be included as a component of our executive compensation package – see Item 11 subsection “
Elements of Executive Compensation
”.
|
3.
|
Our 2011 Plan allows for the issuance of tandem stock appreciation rights, restricted stock units and deferred stock units, but we have not granted any stock awards to date.
|
4.
|
The Grant Date Fair Value, computed in accordance with FASB ASC Topic 718, represents the value of stock options granted during the year. The amounts reported in the Grants of Plan-Based Awards Table reflect our accounting expense and may not represent the amounts our named executive officers will actually realize from the awards. Whether, and to what extent, a named executive officer realizes value will depend on our actual operating performance, stock price fluctuations and that named executive officer’s continued employment. Our Designated Plans, governed substantially under the same terms as our 2011 Plan, provide that the option exercise price is always at least equal to the closing market price of the common shares on the day preceding the date of grant and the term may not exceed 10 years. These stock options vest one quarter immediately, and one quarter on the next three anniversaries of their grant date. As the closing market price of the common shares is denominated in Canadian dollars, the Exercise Price and the Grant Date Fair Value shown in the table have been translated to US dollars using the average exchange rate for the year.
|
Option-based awards - outstanding vested options
(1)
|
||||||
Name
|
Number of securities
underlying unexercised
|
Option
exercise price
|
Option
exercise price
|
Option grant date
(2)
|
Value of
unexercised
|
Value of
unexercised
|
Dr. Mark Murray
(5)
|
219,428
|
0.44
|
0.44
|
September 13, 2005
|
1,757,618
|
1,646,739
|
27,007
|
0.44
|
0.44
|
March 2, 2008
|
216,326
|
202,679
|
|
30,000
|
4.65
|
4.37
|
August 31, 2008
|
114,000
|
107,183
|
|
25,000
|
1.80
|
1.69
|
December 9, 2008
|
166,250
|
156,308
|
|
18,750
|
3.85
|
3.62
|
January 28, 2010
|
86,250
|
81,092
|
|
35,000
|
2.40
|
2.26
|
August 10, 2011
|
211,750
|
199,087
|
|
26,250
|
1.70
|
1.60
|
December 23, 2011
|
177,188
|
166,592
|
|
17,500
|
5.15
|
4.84
|
December 10, 2012
|
57,750
|
54,297
|
|
Mr. Ian Mortimer
(4)
|
3,000
|
7.00
|
6.58
|
December 15, 2004
|
4,350
|
4,090
|
15,000
|
3.10
|
2.91
|
July 26, 2005
|
80,250
|
75,451
|
|
2,500
|
5.40
|
5.08
|
March 29, 2006
|
7,625
|
7,169
|
|
7,500
|
5.40
|
5.08
|
March 29, 2006
|
22,875
|
21,507
|
|
3,750
|
3.00
|
2.82
|
August 3, 2006
|
20,438
|
19,215
|
|
3,750
|
3.00
|
2.82
|
August 3, 2006
|
20,438
|
19,215
|
|
3,750
|
3.00
|
2.82
|
August 3, 2006
|
20,438
|
19,215
|
|
3,750
|
3.00
|
2.82
|
August 3, 2006
|
20,438
|
19,215
|
|
10,000
|
6.50
|
6.11
|
August 7, 2007
|
19,500
|
18,334
|
|
6,000
|
5.60
|
5.27
|
April 1, 2008
|
17,100
|
16,077
|
|
8,000
|
5.60
|
5.27
|
April 1, 2008
|
22,800
|
21,437
|
|
70,000
|
5.60
|
5.27
|
April 1, 2008
|
199,500
|
187,570
|
|
11,000
|
1.80
|
1.69
|
December 9, 2008
|
73,150
|
68,776
|
|
16,000
|
3.85
|
3.62
|
January 28, 2010
|
73,600
|
69,199
|
|
25,000
|
2.40
|
2.26
|
August 10, 2011
|
151,250
|
142,205
|
|
18,750
|
1.70
|
1.60
|
December 23, 2011
|
126,563
|
118,994
|
|
12,500
|
5.15
|
4.84
|
December 10, 2012
|
41,250
|
38,783
|
|
Mr. Bruce Cousins
|
37,500
|
9.12
|
8.57
|
October 7, 2013
|
-
|
-
|
Dr. Ian MacLachlan
|
30,000
|
4.65
|
4.37
|
August 31, 2008
|
114,000
|
107,183
|
16,000
|
1.80
|
1.69
|
December 9, 2008
|
106,400
|
100,037
|
|
16,000
|
3.85
|
3.62
|
January 28, 2010
|
73,600
|
69,199
|
|
25,000
|
2.40
|
2.26
|
August 10, 2011
|
151,250
|
142,205
|
|
18,750
|
1.70
|
1.60
|
December 23, 2011
|
126,563
|
118,994
|
|
12,500
|
5.15
|
4.84
|
December 10, 2012
|
41,250
|
38,783
|
|
Dr. Mark Kowalski
|
12,500
|
5.75
|
5.41
|
August 12, 2013
|
33,750
|
31,732
|
Dr. Peter Lutwyche
|
18,000
|
1.80
|
1.69
|
December 9, 2008
|
119,700
|
112,542
|
16,000
|
3.85
|
3.62
|
January 28, 2010
|
73,600
|
69,199
|
|
20,000
|
2.40
|
2.26
|
August 10, 2011
|
121,000
|
113,764
|
|
15,000
|
1.70
|
1.60
|
December 23, 2011
|
101,250
|
95,195
|
|
10,000
|
5.15
|
4.84
|
December 10, 2012
|
33,000
|
31,027
|
Option-based awards - outstanding unvested options
(1)
|
||||||
Name
|
Number of securities
underlying unexercised
|
Option
exercise price
|
Option
exercise price
|
Option grant date
(2)
|
Value of
unexercised
|
Value of
unexercised
|
Dr. Mark Murray
(5)
|
6,250
|
3.85
|
3.62
|
January 28, 2010
|
28,750
|
27,031
|
8,750
|
1.70
|
1.60
|
December 23, 2011
|
59,063
|
55,531
|
|
17,500
|
5.15
|
4.84
|
December 10, 2012
|
57,750
|
54,297
|
|
Mr. Ian Mortimer
|
6,250
|
1.70
|
1.60
|
December 23, 2011
|
42,188
|
39,665
|
12,500
|
5.15
|
4.84
|
December 10, 2012
|
41,250
|
38,783
|
|
Mr. Bruce Cousins
|
112,500
|
9.12
|
8.57
|
October 7, 2013
|
-
|
-
|
Dr. Ian MacLachlan
|
6,250
|
1.70
|
1.60
|
December 23, 2011
|
42,188
|
39,665
|
12,500
|
5.15
|
4.84
|
December 10, 2012
|
41,250
|
38,783
|
|
Dr. Mark Kowalski
|
37,500
|
5.75
|
5.41
|
August 12, 2013
|
101,250
|
95,195
|
Dr. Peter Lutwyche
|
5,000
|
1.70
|
1.60
|
December 23, 2011
|
33,750
|
31,732
|
10,000
|
5.15
|
4.84
|
December 10, 2012
|
33,000
|
31,027
|
Name
|
Option-based
awards value
|
Option-based
awards value
|
Dr. Mark Murray
|
234,900
|
226,442
|
Mr. Bruce Cousins
|
-
|
-
|
Mr. Ian Mortimer
|
167,405
|
161,274
|
Dr. Ian MacLachlan
|
167,405
|
161,274
|
Dr. Mark Kowalski
|
-
|
-
|
Dr. Peter Lutwyche
|
134,580
|
129,830
|
Payment Type
|
Dr. Mark
Murray
|
Mr. Bruce
Cousins
|
Dr. Ian
MacLachlan
|
Dr. Mark
Kowalski
|
Dr. Peter
Lutwyche
|
|||||||||||||||
Involuntary termination by Tekmira for cause
|
||||||||||||||||||||
Cash payment
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Option values
(1)
|
$ | 2,620,461 | $ | - | $ | 576,401 | $ | 31,732 | $ | 421,727 | ||||||||||
Benefits
(2)
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Involuntary termination by Tekmira upon death
|
||||||||||||||||||||
Cash payment
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Option values
(1)
|
$ | 2,620,461 | $ | - | $ | 576,401 | $ | 31,732 | $ | 421,727 | ||||||||||
Benefits
(2)
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Involuntary termination by Tekmira without cause
|
||||||||||||||||||||
Cash payment
|
$ | 1,116,771 | $ | 310,308 | $ | 863,192 | $ | 360,092 | $ | 276,223 | ||||||||||
Option values
(1)(3)
|
$ | 2,859,266 | $ | - | $ | 654,849 | $ | 63,464 | $ | 421,727 | ||||||||||
Benefits
(2)
|
$ | 157,747 | $ | 10,716 | $ | 22,577 | $ | 91,154 | $ | 8,053 | ||||||||||
Involuntary termination by Tekmira without cause or
|
||||||||||||||||||||
by Executive with good reason after a change in control of the Company
|
||||||||||||||||||||
Cash payment
|
$ | 1,116,771 | $ | 310,308 | $ | 863,192 | $ | 360,092 | $ | 304,625 | ||||||||||
Option values
(1)(3)
|
$ | 2,859,266 | $ | - | $ | 654,849 | $ | 63,464 | $ | 468,972 | ||||||||||
Benefits
(2)
|
$ | 157,747 | $ | 10,716 | $ | 22,577 | $ | 91,154 | $ | 9,344 |
(1)
|
This amount is based on the difference between Tekmira’s December 31, 2013 TSX closing share price of C$8.45 and the exercise price of the options that were vested as at December 31, 2013 converted into US at 0.9402.
|
(2)
|
Ongoing benefit coverage has been estimated assuming that benefits will be payable for the full length of the severance period which would be the case if new employment was not taken up during the severance period. Benefits include extended health and dental coverage that is afforded to all of the Company’s full time employees. Dr. Murray’s benefits also include a $2,000,000 life insurance policy, the reimbursement of up to $10,000 per annum in professional fees related to the filing of his tax returns. Dr. Murray and Dr. MacLachlan’s benefits also include an estimate of the costs of reimbursement of health expenses incurred, including their families’ health expenses, that are not covered by insurance.
|
(3)
|
This amount is based on the difference between Tekmira’s December 31, 2013 TSX closing share price of C$8.45 and the exercise price of the options that were vested as at December 31, 2013 and options that would vest during the severance period.
|
Name
|
Fees earned
($)
|
Option-based
awards
(1)
($)
|
Total
($)
|
|||||||||
Daniel Kisner (Board Chair)
|
68,750 | 68,750 | ||||||||||
Donald Jewell
|
44,750 | 44,750 | ||||||||||
Frank Karbe (Audit Committee Chair)
|
43,750 | 43,750 | ||||||||||
Kenneth Galbraith (Corporate Governance and Nominating Committee Chair)
|
47,250 | 47,250 | ||||||||||
Michael Abrams
(2)
|
41,250 | 41,250 |
(1)
|
No option-based awards were granted to the directors in 2013. We expect to grant 7,500 options to each of the directors if an increase in our option pool is approved at our next Annual General Meeting.
|
(2)
|
Dr. Abrams resigned from the Board on December 31, 2013 and joined the Company as Executive Vice President and Chief Discovery Officer on January 1, 2014.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
|
Number of securities
to be
issued upon
exercise of
outstanding options,
warrants, and rights
(a)
|
|
Weighted-average
exercise price
(US$) of
outstanding options,
warrants, and
rights
(b)
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
|
||||||
Equity compensation plans approved by security holders
|
||||||||||||
2007 and 2011 Plan
|
1,374,680
|
$ |
5.64
|
97,398
|
||||||||
Protiva Option Plan
|
319,274
|
0.39
|
- | |||||||||
Equity compensation plans not approved by security holders
|
||||||||||||
Designated Plans
|
200,000 |
6.94
|
-
|
|||||||||
Total
|
1,893,954
|
$ |
4.89
|
97,398
|
Name and address of Beneficial Owner
(1)
|
Number of
Common
Shares
|
+
|
Number of
Warrants
(2)
|
+
|
Number of
Shares Acquirable within 60 days
(3)
|
=
|
Total Beneficial Ownership
|
Percentage of Common Stock Ownership Beneficially Owned
(4)
|
||||
Holders of more than 5% of our common stock
|
||||||||||||
Franklin Resources Inc.
(5)
|
2,022,400
|
—
|
—
|
2,022,400
|
9.22
|
%
|
||||||
Steven T. Newby
(6)
|
1,206,000
|
—
|
—
|
1,206,000
|
5.50
|
% | ||||||
Directors and Named Officers
|
||||||||||||
Daniel Kisner
|
12,500
|
6,250
|
25,000
|
43,750
|
*
|
|||||||
Michael Abrams
(7)
|
10,200
|
2,500
|
81,092
|
93,792
|
*
|
|||||||
Kenneth Galbraith
|
15,240
|
—
|
20,000
|
35,240
|
*
|
|||||||
Donald Jewell
|
479,755
|
90,000
|
25,000
|
594,755
|
2.70
|
%
|
||||||
Frank Karbe
|
5,000
|
2,500
|
20,000
|
27,500
|
*
|
|||||||
Peggy Phillips
|
—
|
—
|
3,750
|
3,750
|
*
|
|||||||
Mark Murray
|
64,961
|
10,000
|
407,685
|
482,646
|
2.16
|
%
|
||||||
Ian MacLachlan
|
171,534
|
5,000
|
124,500
|
301,034
|
1.36
|
%
|
||||||
Bruce Cousins
|
—
|
—
|
37,500
|
37,500
|
*
|
|||||||
Mark Kowalski
|
—
|
—
|
18,750
|
18,750
|
*
|
|||||||
Peter Lutwyche
|
38,758
|
2,500
|
84,000
|
125,258
|
*
|
|||||||
All directors and current executive officers as a group (11 persons)
|
797,948
|
118,750
|
847,277
|
1,763,975
|
7.70
|
%
|
* | Less than 1% of our outstanding common stock. |
(1)
|
Unless otherwise indicated, the address of each stockholder is c/o Tekmira Pharmaceuticals Corp.; 100-8900 Glenlyon Parkway, Burnaby BC, V6J 5J8.
|
(2)
|
These warrants were acquired through participation in Tekmira’s June 2011 public share offering and/or Tekmira’s February 2012 private placement.
|
(3)
|
Reflects shares issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after March 21, 2014.
|
(4) |
Based on 21,945,838 common shares issued and outstanding, as of March 21, 2014. Shares of common stock subject to options currently exercisable, or exercisable within 60 days of March 21, 2014, are deemed outstanding for computing the percentage of the common stock beneficially owned by the person holding such options but are not deemed outstanding for computing the percentage of any other person.
|
(5) |
According to Schedule 13G filed with the SEC on January 10, 2014 by Franklin Resources Inc., as of December 31, 2013,
Franklin Resources Inc. is the record and beneficial owner of 2,022,400 of our common stock. The address of Franklin
Resources Inc. is One Franklin Parkway, San Mateo, CA 94403-1906.
|
(6) |
According to Schedule 13G/A filed with the SEC on February 18, 2014 by Steven T. Newby, as of December 31, 2013, Steven
T. Newby is the record and beneficial owner of 1,206,000 of our common stock. The address of Steven T. Newby is 12716
Split Creek Court, North Potomac, MD 20878
|
(7) | Dr. Abrams was a Director until December 31, 2013. |
Certain Relationships and Related Transactions, and Director Independence
|
Principal Accountant Fees and Services
|
|
December 31,
2013
|
|
December 31,
2012
|
|||||
Audit fees
(1)
|
|
$
|
234,146
|
|
|
$
|
187,120
|
|
Audit-related fees
(2)
|
|
8,253
|
|
|
0
|
|
||
Tax fees
(3)
|
|
85,189
|
|
|
33,570
|
|
||
Other fees
|
|
0
|
|
|
0
|
|
||
Total fees
|
|
$
|
327,588
|
|
|
$
|
220,690
|
|
(1)
|
Quarterly reviews, review of SEC listing documents and review of prospectus.
|
(2)
|
Preliminary review of Sarbanes-Oxley internal controls
|
(3)
|
Tax compliance and tax planning.
|
•
|
The Audit Committee will pre-approve all audit services provided by KPMG through their recommendation of KPMG as shareholders’ auditors at the Company’s annual meeting and through the Audit Committee’s review of KPMG’s annual audit plan.
|
•
|
Annually, the Audit Committee will review a list of audit, audit-related, tax and other non-audit services and recommend pre-approval of these services for the upcoming year. Any additional requests will be addressed on a case-by-case specific engagement basis as described below. The Audit Committee will be informed quarterly of the services on the pre-approved list for which the auditor has been engaged.
|
•
|
All requests to engage KPMG for other services will be addressed on a case-by-case specific engagement basis. The Company employee making the request is to submit the request for service to the Company’s Executive Vice President, Finance. The request for service should include a description of the service, the estimated fee, a statement that the service is not a Prohibited Service and the reason KPMG is being engaged.
|
Exhibits and Financial Statement Schedules
|
TEKMIRA PHARMACEUTICALS CORPORATION
|
||
By:
|
/s/ Mark Murray
|
|
Mark Murray
|
||
President and Chief Executive Officer
|
Signatures
|
Capacity in Which Signed
|
|
/s/ Daniel Kisner
|
Director (Chairman)
|
|
Daniel Kisner
|
||
/s/ Mark Murray
|
President and Chief Executive Officer and Director
|
|
Mark Murray
|
(Principal Executive Officer)
|
|
/s/ Bruce Cousins
|
Executive Vice President, Finance and Chief Financial Officer
|
|
Bruce Cousins
|
(Principal Financial Officer and Accounting Officer)
|
|
/s/ Kenneth Galbraith
|
Director
|
|
Kenneth Galbraith
|
||
/s/ Donald Jewell
|
Director
|
|
Donald Jewell
|
||
/s/ Frank Karbe
|
Director
|
|
Frank Karbe
|
||
/s/ Peggy Phillips
|
Director
|
|
Peggy Phillips
|
Exhibit
Number
|
Description
|
||
2.1*
|
Subscription Agreement, between the Company and Alnylam Pharmaceuticals, Inc., dated March 28, 2008 (incorporated herein by reference to Exhibit 2.1 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
2.2*
|
Subscription Agreement, between the Company and Roche Finance Ltd., dated March 31, 2008 (incorporated herein by reference to Exhibit 2.2 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
3.1*
|
Notice of Articles and Articles of the Company (incorporated herein by reference to Exhibit 1.1 to the Registrant’s
Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
3.2**
|
Amendment to the Articles and Articles of the Company dated May 14, 2013.
|
||
10.1†*
|
Amendment No. 1 to the Amended and Restated Agreement, between the Company (formerly Inex Pharmaceuticals Corporation) and Hana Biosciences, Inc., effective as of May 27, 2009 (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.2†*
|
Amended and Restated License Agreement, between Inex Pharmaceuticals Corporation and Hana Biosciences, Inc, dated April 30, 2007 (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Amendment No. 1 to Form 20-F for the year ended December 31, 2010 filed with the SEC on January 31, 2012).
|
||
10.3†*
|
Sublicense Agreement, between Inex Pharmaceuticals Corporation and Alnylam Pharmaceuticals, Inc., dated January 8, 2007 (incorporated herein by reference to Exhibit 4.3 to the Registrant’s Amendment No. 1 to Form 20-F for the year ended December 31, 2010 filed with the SEC on January 31, 2012).
|
||
10.4†*
|
Amended and Restated License and Collaboration Agreement, between the Company and Alnylam Pharmaceuticals, Inc., effective as of May 30, 2008 (incorporated herein by reference to Exhibit 4.4 to the Registrant’s Amendment No. 1 to Form 20-F for the year ended December 31, 2010 filed with the SEC on January 31, 2012).
|
||
10.5†*
|
Amended and Restated Cross-License Agreement, between Alnylam Pharmaceuticals, Inc. and Protiva Biotherapeutics Inc., dated May 30, 2008 (incorporated herein by reference to Exhibit 4.5 to the Registrant’s Amendment No. 1 to Form 20-F for the year ended December 31, 2010 filed with the SEC on January 31, 2012).
|
||
10.6†*
|
License Agreement, between Inex Pharmaceuticals and Aradigm Corporation, dated December 8, 2004 (incorporated herein by reference to Exhibit 4.6 to the Registrant’s Amendment No. 1 to Form 20-F for the year ended December 31, 2010 filed with the SEC on January 31, 2012).
|
||
10.7†*
|
Settlement Agreement, between Sirna Therapeutics, Inc. and Merck & Co., Inc. and Protiva Biotherapeutics Inc. and Protiva Biotherapeutics (USA), Inc., effective as of October 9, 2007 (incorporated herein by reference to Exhibit 4.7 to the Registrant’s Amendment No. 1 to Form 20-F for the year ended December 31, 2010 filed with the SEC on January 31, 2012).
|
||
10.8†*
|
Development, Manufacturing and Supply Agreement, between the Company and Alnylam Pharmaceuticals, Inc., dated January 2, 2009 (incorporated herein by reference to Exhibit 4.8 to the Registrant’s Amendment No. 1 to Form 20-F for the year ended December 31, 2010 filed with the SEC on January 31, 2012).
|
||
10.9†*#
|
Executive Employment Agreement with Ian Mortimer, dated March 26, 2008 (incorporated herein by reference to Exhibit 4.9 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.10*#
|
Executive Employment Agreement with Ian MacLachlan, dated May 30, 2008 (incorporated herein by reference to Exhibit 4.10 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
Exhibit
Number
|
Description
|
||
10.11*#
|
Executive Employment Agreement with Mark Murray, dated May 30, 2008 (incorporated herein by reference to Exhibit 4.11 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.12*#
|
Executive Employment Agreement with Peter Lutwyche, dated January 1, 2009 (incorporated herein by reference to Exhibit 4.12 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.13*#
|
Share Option Plan amended through May 12, 2009 (including form stock option agreements) (incorporated herein by reference to Exhibit 4.13 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.14*
|
Lease Agreement with Canada Lands Company CLC Limited dated December 15, 1997, as amended (incorporated herein by reference to Exhibit 4.14 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.15*#
|
Form of Indemnity Agreement (incorporated herein by reference to Exhibit 4.15 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.16*
|
Award Contract with USASMDC/ARSTRAT effective date July 14, 2010 (incorporated herein by reference to Exhibit 4.16 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.17†*
|
License Agreement between the University of British Columbia and Inex Pharmaceuticals Corporation executed on July 30, 2001 (incorporated herein by reference to Exhibit 4.17 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.18†*
|
Amendment Agreement between the University of British Columbia and Inex Pharmaceuticals Corporation dated July 11, 2006 (incorporated herein by reference to Exhibit 4.18 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.19†*
|
Second Amendment Agreement between the University of British Columbia and Inex Pharmaceuticals Corporation dated January 8, 2007 (incorporated herein by reference to Exhibit 4.19 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.20†*
|
Consent Agreement of the University of British Columbia to Inex/Alnylam Sublicense Agreement dated January 8, 2007 (incorporated herein by reference to Exhibit 4.20 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.21†*
|
Amendment No. 2 to the Amended and Restated Agreement, between the Company (formerly Inex Pharmaceuticals Corporation) and Hana Biosciences, Inc., effective as of September 20, 2010 (incorporated herein by reference to Exhibit 4.21 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
10.22†*
|
License and Collaboration Agreement between the Company and Halo-Bio RNAi Therapeutics, Inc. as of August 24, 2011 (incorporated herein by reference to Exhibit 4.22 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2011 filed with the SEC on March 27, 2012).
|
||
10.23*
|
Loan Agreement with Silicon Valley Bank dated as of December 21, 2011 (incorporated herein by reference to Exhibit 4.23 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2011 filed with the SEC on March 27, 2012).
|
||
10.24*#
|
Employment Agreement with Paul Brennan dated August 24, 2010 (incorporated herein by reference to Exhibit 4.24 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2011 filed with the SEC on March 27, 2012).
|
||
10.25*#
|
Tekmira 2011 Omnibus Share Compensation Plan approved by shareholders on June 22, 2011 (incorporated herein by reference to Exhibit 4.25 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2011 filed with the SEC on March 27, 2012).
|
||
10.26†*
|
Settlement Agreement and General Release, by and among Tekmira Pharmaceuticals Corporation, Protiva Biotherapeutics Inc., Alnylam Pharmaceuticals, Inc., and AlCana Technologies, Inc., dated November 12, 2012 (incorporated herein by reference to Exhibit 4.26 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2012 filed with the SEC on March 27, 2013).
|
Exhibit
Number
|
Description
|
||
10.27†*
|
Cross-License Agreement by and among Alnylam Pharmaceuticals, Inc., Tekmira Pharmaceuticals Corporation and Protiva Biotherapeutics Inc., dated November 12, 2012(incorporated herein by reference to Exhibit 4.27 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2012 filed with the SEC on March 27, 2013).
|
||
10.28†*
|
License Agreement by and among Protiva Biotherapeutics Inc. and Marina Biotech, Inc. dated November 28, 2012 (incorporated herein by reference to Exhibit 4.28 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2012 filed with the SEC on March 27, 2013).
|
||
10.29*#
|
Employment Agreement with Diane Gardiner dated March 1, 2013 (incorporated herein by reference to Exhibit 4.29 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2012 filed with the SEC on March 27, 2013).
|
||
10.30**#
|
Employment Agreement with Mark Kowalski dated August 12, 2013
|
||
10.31**#
|
Employment Agreement with Bruce Cousins dated October 7, 2013
|
||
10.32††**
|
Services Agreement by and among Protiva Biotherapeutics Inc., Protiva Agricultural Development Company Inc. and Monsanto Company dated January 12, 2014
|
||
10.33††**
|
Option Agreement by and among Tekmira Pharmaceuticals Corporation, Protiva Biotherapeutics Inc., Protiva Agricultural Development Company Inc. and Monsanto Canada Inc. dated January 12, 2014
|
||
10.34††**
|
License and Services Agreement by and among Protiva Biotherapeutics Inc., Protiva Agricultural Development Company Inc. and Tekmira Pharmaceuticals Corporation dated January 12, 2014
|
||
21.1**
|
List of Subsidiaries (incorporated herein by reference to Exhibit 8.1 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on June 3, 2011).
|
||
23.1**
|
Consent of KPMG LLP, an Independent Registered Public Accounting Firm | ||
31.1** |
Certification of Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
31.2** |
Certification of Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
32.1** |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
32.2** |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101.INS**
|
XBRL Instance Document
|
||
101.SCH** |
XBRL Taxonomy Extension Schema Document
|
||
101.CAL** |
XBRL Taxonomy Extension Calculation Linkbase Document
|
||
101.DEF** |
XBRL Taxonomy Extension Definition Linkbase Document
|
||
101.LAB** |
XBRL Taxonomy Extension Label Linkbase Document
|
||
101.PRE** |
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Previously filed.
|
**
|
Filed herewith.
|
†
|
Confidential treatment granted as to portions of this exhibit.
|
††
|
Confidential treatment has been requested as to portions of this exhibit.
|
#
|
Management contract or compensatory plan or arrangement.
|
|
1.
|
the Articles of the Company be altered by adding the text substantially in the form attached as Exhibit “B” to the Information Circular of Tekmira Pharmaceuticals Corporation dated March 27, 2013 as and at Section 13.9 of the Articles of the Company; and
|
|
2.
|
any one or more of the directors or officers of the Company be authorized to take all such actions, do such things and execute and deliver, whether under the common seal of the Company or otherwise, all such agreements, instruments, statements, forms and other documents as they may be advised by counsel so to do in connection with this alteration of the Articles.”
|
13.9
|
Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board of directors of the Company may be made at any annual general meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:
|
(a)
|
by or at the direction of the board, including pursuant to a notice of meeting;
|
(b)
|
by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the Act, or a requisition of the shareholders made in accordance with the provisions of the Act; or
|
(c)
|
by any person (a “Nominating Shareholder”): (A) who, at the close of business on the date of the giving by the Nominating Shareholder of the notice provided for below in this Section 13.9 and at the close of business on the record date for notice of such meeting, is entered in the securities register of the Company as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in this Section 13.9.
|
(a)
|
in the case of an annual general meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual general meeting of shareholders; provided, however, that in the event that the annual general meeting of shareholders is to be held on a date that is less than 50 days after the date (the “Notice Date”) on which the first public announcement of the date of the annual general meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the tenth (10th) day following the Notice Date; and
|
(b)
|
in the case of a special meeting (which is not also an annual general meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the fifteenth (15th) day following the day on which the first public announcement of the date of the special meeting of shareholders was made.
|
(a)
|
as to each person whom the Nominating Shareholder proposes to nominate for election as a director: (A) the name, age, business address and residential address of the person; (B) the principal occupation or employment of the person, and the principal occupation or employment of the person for the past 5 years; (C) the citizenship of such person; (D) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and (E) any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below); and
|
(b)
|
as to the Nominating Shareholder giving the notice, full particulars regarding any proxy, contract, agreement, arrangement or understanding pursuant to which such Nominating Shareholder has a right to vote or direct the voting of any shares of the Company and any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below).
|
(a)
|
“public announcement” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the System for Electronic Document Analysis and Retrieval at www.sedar.com; and
|
(b)
|
“Applicable Securities Laws” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada.
|
(a)
|
The Executive will be employed by and will serve the Company as its
Senior Vice President and Chief Medical Officer
. The Executive will report directly to the Chief Executive Officer of the Company and will perform the duties and responsibilities assigned to his from time to time by the Chief Executive Officer. The Executive will comply with all lawful instructions given by the Chief Executive Officer of the Company.
|
(b)
|
The terms and conditions of this Agreement will have effect as and from August 12, 2013 and the Executive’s employment as
Senior Vice President and Chief Medical Officer
will continue until terminated as provided for in this Agreement.
|
(c)
|
The Executive acknowledges and agrees that in addition to the terms and conditions of this Agreement, his employment with the Company is subject to and governed by the Company’s policies as established from time to time. The Executive agrees to comply with the terms of such policies so long as they are not inconsistent with any provisions of the Agreement. The Executive will inform his self of the details of such policies and amendments thereto established from time to time.
|
(d)
|
The Executive agrees that, as a high technology professional as defined in the Regulations to the
Employment Standards Act
of British Columbia, and an executive, his hours of work will vary and may be irregular and will be those hours required to meet the objectives of his employment. The Executive agrees that the compensation described in Section 2 of this Agreement compensates him in full for all hours worked.
|
(e)
|
The Executive will devote his self exclusively to the Company’s business and will not be employed or engaged in any capacity in any other business without the prior permission of the Company, such permission not to be unreasonably withheld.
|
(f)
|
Concurrently with the execution and delivery of this Agreement and in consideration of his employment by the Company, the Executive and the Company will enter into a “Confidentiality Agreement and Assignment of Inventions” in the form attached his hereto as Appendix A.
|
(a)
|
The Company will pay the Executive an annual salary of
$325,000
(US funds), less required deductions (the “
Base Salary
”). The Base Salary will be payable semi-monthly.
|
(b)
|
The Base Salary will be reviewed on an annual basis. This review will not result in a decrease in the Base Salary nor will it necessarily result in an increase to the Base Salary.
|
(c)
|
The Executive will be eligible for an annual cash bonus of up to
35
percent of the Base Salary, if the Chief Executive Officer and the Board of Directors in their discretion determine that the Executive has achieved the performance objectives agreed to between the Executive and the Chief Executive Officer. Any bonus payable during the first year of the Executive’s employment will be pro-rated.
|
(d)
|
The Company will facilitate the Executive’s enrolment in the Company’s US insurance benefits plans, as amended from time to time. In all cases, eligibility to participate in the plans and to receive benefits under the plans will be subject to the terms and requirements of the plans themselves and/or the insurance provider. The Company is not responsible for the payment of benefits in any circumstance. Further, the Company reserves the right to change any of the insurance benefit plans or providers, however, if the Company is unable to maintain similar coverage as to the insurance benefits plans or the providers, then the Executive will be provided with compensation to assist in securing his own coverage, such compensation to be determined by the Company.
|
(e)
|
The Executive will be eligible for participation in the Company’s share incentive plan, subject to the terms of the plan.
|
(f)
|
The Company will reimburse the Executive for all reasonable expenses actually and properly incurred by the Executive in connection with the performance of his duties. The Executive will provide the Company with receipts supporting his claims for reimbursement.
|
(a)
|
The biotechnology industry is highly competitive and employees leaving the employ of the Company have the ability to cause significant damage to the Company’s interests if they join a competing business immediately upon leaving the Company.
|
(b)
|
Definitions:
|
(i)
|
“
Business
” or “
Business of the Company
” means:
|
(A)
|
the researching, developing, production and marketing of RNA interference drugs and delivery technology, as such business grows and evolves during this Agreement; and
|
(B)
|
any other material business carried on from time to time by the Company or any subsidiary or affiliate of the Company.
|
(ii)
|
“
Competing Business
” means any endeavour, activity or business which is competitive in any material way with the Business of the Company worldwide.
|
(iii)
|
“
Customer
” means any entity that is an ongoing customer of the Company that the Executive has been directly or indirectly, through his reports, involved in servicing on behalf of the Company.
|
(iv)
|
“
Prospective Customer
” means any entity during the last 12 months of employment prior to termination or resignation that was solicited by the Executive on behalf of the Company for the purposes of becoming a customer of the Company or whom he knows was solicited by the Company for the purpose of becoming a customer of the Company.
|
(c)
|
The Executive shall not, during the term of this Agreement and for the Restricted Period (as defined below) following the termination of his employment for any reason, on his own behalf or on behalf of any entity, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any entity, carry on or be employed by or engaged in or have any financial or other interest in or be otherwise commercially involved in a Competing Business. In this Agreement, “
Restricted Period
” means: (i) in the event that the Executive is terminated pursuant to Section 6(b) of this Employment Agreement, a period equivalent to the amount of notice that the Executive is entitled pursuant to Section 6(b)(ii); or (ii) in the event that the Executive’s employment is terminated pursuant to a Change of Control (as defined below), a period of twelve (12) months.
|
(d)
|
The Executive shall, however, not be in default of Section 4(c) by virtue of the Executive:
|
(i)
|
following the termination of employment, holding, strictly for portfolio purposes and as a passive investor, no more than five percent (5%) of the issued and outstanding shares of, or any other interest in, any corporation or other entity that is a Competing Business; or
|
(ii)
|
during the course of employment, holding, strictly for portfolio purposes and as a passive investor, no more than five percent (5%) of the issued and outstanding shares of, or any other interest in, any corporation or other entity, the business of which corporation or other entity is in the same Business as the Company, and provided further that the Executive first obtains the Company’s written consent, which consent will not be unreasonably withheld.
|
(e)
|
If the Executive holds issued and outstanding shares or any other interest in a corporation or other entity pursuant to Section 4(d)(ii) and following the acquisition of such shares or other interest the business of the corporation or other entity becomes a Competing Business, the Executive will promptly dispose of his shares or other interest in such corporation or other entity.
|
(f)
|
The Executive shall not, during this Agreement and for the Restricted Period following the termination of his employment, for whatever reason, on his own behalf or on behalf of or in connection with any other entity, without the prior written and informed consent of the Company, directly or indirectly, in any capacity whatsoever, alone, through or in connection with any entity:
|
(i)
|
canvass or solicit the business of (or procure or assist the canvassing or soliciting of the business of) any Customer or Prospective Customer of the Company, or otherwise solicit, induce or encourage any Customer or Prospective Customer of the Company to cease to engage the services of the Company, for any purpose which is competitive with the Business; or
|
(ii)
|
accept (or procure or assist the acceptance of) any business from any Customer or Prospective Customer of the Company which business is competitive with the Business; or
|
(iii)
|
supply (or procure or assist the supply of) any goods or services to any Customer or Prospective Customer of the Company for any purpose which is competitive with the Business; or
|
(iv)
|
employ, engage, offer employment or engagement to or solicit the employment or engagement of or otherwise entice away from or solicit, induce or encourage to leave the employment or engagement of the Company, any individual who is employed or engaged by the Company whether or not such individual would commit any breach of his contract or terms of employment or engagement by leaving the employ or the engagement of the Company; or
|
(v)
|
procure or assist any entity to employ, engage, offer employment or engagement or solicit the employment or engagement of any individual who is employed or engaged by the Company or otherwise entice away from the employment or engagement of the Company any such individual. Notwithstanding the foregoing, the Executive shall, be permitted to, solely in a personal capacity, provide letters of reference for individuals who are employed by the Company.
|
(g)
|
The Executive expressly recognizes and acknowledges that it is the intent of the parties that his activities following the termination of his employment with the Company be restricted in the manner described in this Agreement, and acknowledges that good, valuable, and sufficient consideration has been provided in exchange for such restrictions.
|
(a)
|
The Executive understands and agrees that the Company has a material interest in preserving the relationships it has developed with its executives, customers and suppliers against impairment by competitive activities of a former executive. Accordingly, the Executive agrees that the restrictions and covenants contained in Section 4 are reasonably required for the protection of the Company and its goodwill and that the Executive’s agreement to those restrictions and covenants by the execution of this Agreement, are of the essence to this Agreement and constitute a material inducement to the Company to enter into this Agreement and to employ the Executive, and that the Company would not enter into this Agreement absent such an inducement.
|
(b)
|
The Executive understands and acknowledges that if the Executive breaches Section 4, that breach will give rise to irreparable injury to the Company for which damages are an inadequate remedy, and the Company may pursue injunctive relief for such breach in a court of competent jurisdiction.
|
(a)
|
The Executive may terminate his employment by giving at least two (2) months’ advance notice in writing to the Company of the effective date of the resignation. The Company may waive such notice, in whole or in part, and if it does so, the Executive’s resignation will become effective and his employment will cease on the date set by the Company in the notice of waiver provided that they continue to pay the Executive his normal Base Salary and to the extent possible, provide benefits coverage to the end of the notice period.
|
(b)
|
The Company may terminate the Executive’s employment:
|
(i)
|
without notice or payment in lieu thereof, for just cause, which for the purposes of this Agreement will be defined to include but not be limited to the Executive’s willful and continued failure to perform his duties his hereunder and the Executive’s willful engagement in conduct that is injurious to the Company, monetarily or otherwise; or
|
(ii)
|
at the Company's sole discretion for any reason, without cause, upon providing to the Executive an amount equal to:
|
|
(A) twelve (12) months’ Base Salary; and
|
|
(B) a prorated payment under the Bonus Plan in respect of the fiscal year in which the Executive’s employment is terminated. This prorated payment will be based on the average of the actual percentage of the Executive’s annual cash bonus for the previous three fiscal years (or such shorter period as the Executive may have been employed) and prorated for the portion of the year ending on the last day of employment
|
|
(collectively, the “
Severance Amount
”). The Company may pay the Severance Amount by way of a lump sum payment or by way of salary continuance. The Severance Amount is inclusive of any entitlement to minimum standard severance under the
B.C. Employment Standards Act
.
|
(c)
|
In this Agreement, “
Change of Control
” means the first occurrence of any one of:
|
(i)
|
the acquisition or continuing ownership by any person or persons acting jointly or in concert (as such phrase is defined in the
Securities Act
(British Columbia)), directly or indirectly, of common shares or of convertible securities, which, when added to all other securities of the Company at the time held by such person or persons, or persons associated or affiliated with such person or persons within the meaning of the
Business Corporations Act
(British Columbia) (collectively, the "
Acquirors
"), and assuming the conversion, exchange or exercise of convertible securities beneficially owned by the Acquirors, results in the Acquirors beneficially owning shares that would, notwithstanding any agreement to the contrary, entitle the holders thereof for the first time to cast more than 50% of the votes attaching to all shares in the capital of the Company that may be cast to elect directors;
|
(ii)
|
the sale, lease or exchange or other disposition of all or substantially all of the Company's assets;
|
(iii)
|
an amalgamation, merger, arrangement or other business combination (a "
Business Combination
") involving the Company that results in the security holders of the parties to the Business Combination, other than the Company, owning, directly or indirectly, shares of the continuing entity that entitle the holders thereof to cast more than 50% of the votes attaching to all shares in the capital of the continuing entity that may be cast to elect directors; or
|
(iv)
|
the Company’s Board of Directors, by resolution, determines that a Change of Control of the Company has occurred.”
|
(d)
|
If a Change of Control occurs and within twelve (12) months after the occurrence of a Change of Control, the Executive resigns his employment for Good Reason upon giving the Company not less than three (3) months’ prior written notice of resignation; or at the Company’s sole discretion, the Executive is terminated without cause within twelve (12) months after a Change of Control, the Executive will be entitled to receive the Change of Control Severance Amount (as defined below). In this Agreement, “
Good Reason
” means one or more of the following events occurring without the Executive’s written consent:
|
(i)
|
a fundamental change in the Executive’s status, position, remuneration, authority or responsibilities that does not represent a promotion from or represents an adverse change from the status, position, authority or responsibilities in effect immediately prior to the Change of Control;
|
(ii)
|
a fundamental reduction in the Base Salary or retirement plans, health benefits, bonus potential or other compensation plans, practices, policies or programs provided to the Executive immediately prior to the Change of Control;
|
(iii)
|
relocation of the Executive’s principal place of employment to a place outside of his primary location at the time of the change of control.;
|
(iv)
|
any request by the Company that the Executive participate in an unlawful act pursuant to the laws of British Columbia or Canada; or
|
(v)
|
any failure to secure the agreement of any successor company or other entity to the Company to fully assume the Company’s obligations under this Agreement.
|
(e)
|
In this Agreement, the “
Change of Control Severance Amount
” means an amount calculated as follows:
|
(i)
|
an amount equal to twelve (12) month’s Base Salary; plus
|
(ii)
|
a bonus payment equal to the average of the actual bonus payments made to the Executive from the previous three (3) calendar years preceding the date of termination of employment.
|
(f)
|
No matter how the Executive’s employment is terminated, the Executive will be entitled to any wages and bonus payable for service up to and including the day of termination.
|
(a)
|
Non-Waiver.
Failure on the part of either party to complain of any act or failure to act of the other of them or to declare the other party in default of this Agreement, irrespective of how long such failure continues, will not constitute a waiver by such party of their rights his hereunder or of the right to then or subsequently declare a default.
|
(b)
|
Severability.
In the event that any provision or part of this Agreement is determined to be void or unenforceable in whole or in part, the remaining provisions, or parts thereof, will be and remain in full force and effect.
|
(c)
|
Entire Agreement.
This Agreement constitutes the entire agreement between the parties with respect to the employment of the Executive and supersedes any and all agreements, understandings, warranties or representations of any kind, written or oral, express or implied, including any relating to the nature of the position or its duration, and each of the parties releases and forever discharges the other of and from all manner of actions, causes of action, claim or demands whatsoever under or in respect of any agreement. The Company also agrees to be bound by its commitment to reimburse the employee for his relocation expenses pursuant to the terms of the offer letter to him dated May 19, 2013, signed by Mark Murray, President and Chief Executive Officer, which for this purpose shall be part of this agreement
|
(d)
|
Survival.
The provisions of Sections 1(g), 4 and 8(f) will survive the termination of this Agreement.
|
(e)
|
Modification of Agreement.
Any modification of this Agreement must be in writing and signed by both the Company and the Executive or it will have no effect and will be void.
|
(f)
|
Disputes.
Except for disputes arising in respect of Section 4, all disputes arising out of or in connection with this Agreement and the employment relationship between the parties, are to be referred to and finally resolved by arbitration administered by the British Columbia International Commercial Arbitration Centre, pursuant to its Rules. The place of arbitration will be Vancouver, British Columbia.
|
(g)
|
Governing Law.
This Agreement will be governed by and construed according to the laws of the Province of British Columbia.
|
(h)
|
Reimbursement of Legal Fees.
The Company will reimburse the Executive for all reasonable and receipted legal fees incurred by the Executive in the negotiation, drafting, and completion of this Agreement.
|
(i)
|
Independent Legal Advice.
The Executive agrees that the contents, terms and effect of this Agreement have been explained to his by a lawyer and are fully understood. The Executive further agrees that the consideration described aforesaid is accepted voluntarily for the purpose of employment with the Company under the terms and conditions described above.
|
SIGNED, SEALED AND DELIVERED by
Mark Kowalski
in the presence of:
|
)
)
)
)
)
|
/s/ Mark Kowalski
|
Witness
|
)
)
|
Mark Kowalski
|
Address
|
)
)
|
|
)
)
|
||
Occupation
|
)
|
1.
|
INTERPRETATION
|
(a)
|
“
Business
” or “
Business of the Company
” means:
|
(i)
|
the researching, developing, production and marketing of RNA interference drugs and delivery technology, as such business grows and evolves during this Agreement; and
|
(ii)
|
any other material business carried on from time to time by the Company or any subsidiary or affiliate of the Company.
|
(b)
|
“
Confidential Information
” shall mean any information relating to the Business of the Company, whether or not conceived, originated, discovered or developed in whole or in part by the Executive, that is not generally known to the public or to other persons who are not bound by obligations of confidentiality and:
|
(i)
|
from which the Company derives economic value, actual or potential, from the information not being generally known; or
|
(ii)
|
in respect of which the Company otherwise has a legitimate interest in maintaining secrecy;
|
(iii)
|
all proprietary information licensed to, acquired, used or developed by the Company in its research and development activities (including but not restricted to the research and development of RNA interference drugs and delivery technology), other scientific strategies and concepts, designs, know-how, information, material, formulas, processes, research data and proprietary rights in the nature of copyrights, patents, trademarks, licenses and industrial designs;
|
(iv)
|
all information relating to the Business of the Company, and to all other aspects of the Company’s structure, personnel and operations, including financial, clinical, regulatory, marketing, advertising and commercial information and strategies, customer lists, compilations, agreements and contractual records and correspondence; programs, devices, concepts, inventions, designs, methods, processes, data, know-how, unique combinations of separate items that is not generally known and items provided or disclosed to the Company by third parties subject to restrictions on use or disclosure;
|
(v)
|
all know-how relating to the Business of the Company including, all biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety, manufacturing and quality control data and information, and all applications, registrations, licenses, authorizations, approvals and correspondence submitted to regulatory authorities;
|
(vi)
|
all information relating to the businesses of competitors of the Company including information relating to competitors’ research and development, intellectual property, operations, financial, clinical, regulatory, marketing, advertising and commercial strategies, that is not generally known;
|
(vii)
|
all information provided by the Company’s agents, consultants, lawyers, contractors, licensors or licensees to the Company and relating to the Business of the Company; and
|
(viii)
|
all information relating to the Executive’s compensation and benefits, including his salary, vacation, stock options, rights to continuing education, perquisites, severance notice, rights on termination and all other compensation and benefits, except that he shall be entitled to disclose such information to his bankers, advisors, agents, consultants and other third parties who have a duty of confidence to him and who have a need to know such information in order to provide advice, products or services to him.
|
(c)
|
“
Effective Date
” means
August 12, 2013
, being the date that the Executive started working at the Company, as indicated in his employment agreement with the Company.
|
(d)
|
“
Inventions
” shall mean any and all inventions, discoveries, developments, enhancements, improvements, concepts, formulas, designs, processes, ideas, writings and other works, whether or not reduced to practice, and whether or not protectable under patent, copyright, trade secret or similar laws.
|
(e)
|
“
Work Product
” shall mean any and all Inventions and possible Inventions relating to the Business of the Company and which the Executive may make or conceive, alone or jointly with others, during his involvement in any capacity with the Company, whether during or outside his regular working hours, except those Inventions made or conceived by the Executive entirely on his own time that do not relate to the Business of the Company and do not derive from any equipment, supplies, facilities, Confidential Information or other information, gained, directly or indirectly, from or through his involvement in any capacity with the Company.
|
2.
|
CONFIDENTIALITY
|
(a)
|
use or copy any Confidential Information or recollections thereof for any purpose other than the performance of his duties for the benefit of the Company;
|
(b)
|
publish or disclose any Confidential Information or recollections thereof to any person other than to employees of the Company who have a need to know such Confidential Information in the performance of their duties for the Company;
|
(c)
|
permit or cause any Confidential Information to be used, copied, published, disclosed, translated or adapted except as otherwise expressly permitted by this Agreement; or
|
(d)
|
permit or cause any Confidential Information to be stored off the premises of the Company, including permitting or causing such Confidential Information to be stored in electronic format on personal computers, except in accordance with written procedures of the Company, as amended from time to time in writing.
|
(a)
|
information that is already known to the Executive, though not due to a prior disclosure by the Company or by a person who obtained knowledge of the information, directly or indirectly, from the Company;
|
(b)
|
information disclosed to the Executive by another person who is not obliged to maintain the confidentiality of that information and who did not obtain knowledge of the information, directly or indirectly, from the Company;
|
(c)
|
information that is developed by the Executive independently of Confidential Information received from the Company and such independent development can be documented by the Executive;
|
(d)
|
other particular information or material which the Company expressly exempts by written instrument signed by the Company;
|
(e)
|
information or material that is in the public domain through no fault of the Executive; and
|
(f)
|
(i)
|
in the event that the Executive is required to disclose such information or material, upon becoming aware of the obligation to disclose, the Executive will provide to the Company prompt written notice so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement;
|
(ii)
|
if the Company agrees that the disclosure is required by law, it will give the Executive written authorization to disclose the information for the required purposes only;
|
(iii)
|
if the Company does not agree that the disclosure is required by law, this Agreement will continue to apply, except to the extent that a Court of competent jurisdiction orders otherwise; and
|
(iv)
|
if a protective order or other remedy is not obtained or if compliance with this Agreement is waived, the Executive will furnish only that portion of the Confidential Information that is legally required and will exercise all reasonable efforts to obtain confidential treatment of such Confidential Information.
|
3.
|
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS
|
(a)
|
making patent applications for all Work Product, including instructions to lawyers and/or patent agents as to the characteristics of the Work Product in sufficient detail to enable the preparation of a suitable patent specification, to execute all formal documentation incidental to an application for letters patent and to execute assignment documents in favour of the Company for such applications;
|
(b)
|
making applications for all other forms of intellectual property registration relating to all Work Product;
|
(c)
|
prosecuting and maintaining the patent applications and other intellectual property relating to all Work Product; and
|
(d)
|
registering, maintaining and enforcing the patents and other intellectual property registrations relating to all Work Product.
|
4.
|
GENERAL
|
SIGNED, SEALED AND DELIVERED by
Mark Kowalski
in the presence of:
|
)
)
)
)
)
|
/s/ Mark Kowalski
|
Witness Signature
|
)
)
|
Mark Kowalski
|
Witness Name
|
)
)
|
|
Witness Address
|
)
)
|
|
)
)
|
||
Witness Occupation
|
)
|
(a)
|
The Executive will be employed by and will serve the Company as its
Executive Vice President and Chief Financial Officer
. The Executive will report directly to the
President and Chief Executive Officer
of the Company and will perform the duties and responsibilities assigned to him from time to time by the Chief Executive Officer. The Executive will comply with all lawful instructions given by the Chief Executive Officer of the Company.
|
(b)
|
The terms and conditions of this Agreement will have effect as and from October 7, 2013 and the Executive’s employment as
Executive Vice President and Chief Financial Officer
will continue until terminated as provided for in this Agreement.
|
(c)
|
The Executive acknowledges and agrees that in addition to the terms and conditions of this Agreement, his employment with the Company is subject to and governed by the Company’s policies as established from time to time. The Executive agrees to comply with the terms of such policies so long as they are not inconsistent with any provisions of the Agreement. The Executive will inform himself of the details of such policies and amendments thereto established from time to time.
|
(d)
|
The Executive agrees that, as a high technology professional as defined in the Regulations to the
Employment Standards Act
of British Columbia, and an executive, his hours of work will vary and may be irregular and will be those hours required to meet the objectives of his employment. The Executive agrees that the compensation described in Section 2 of this Agreement compensates him in full for all hours worked.
|
(e)
|
The Executive will devote himself exclusively to the Company’s business and will not be employed or engaged in any capacity in any other business without the prior permission of the Company, such permission not to be unreasonably withheld.
|
(f)
|
Concurrently with the execution and delivery of this Agreement and in consideration of his employment by the Company, the Executive and the Company will enter into a “Confidentiality and Assignment of Inventions Agreement” in the form attached hereto as Appendix A.
|
(a)
|
The Company will pay the Executive an annual salary of $305,000 (Canadian funds), less required deductions (the “
Base Salary
”). The Base Salary will be payable semi-monthly.
|
(b)
|
The Base Salary will be reviewed on an annual basis. This review will not result in a decrease in the Base Salary nor will it necessarily result in an increase to the Base Salary.
|
(c)
|
The Executive will be eligible for an annual cash bonus of up to 40 percent of the Base Salary, if the Chief Executive Officer and the Board of Directors in their absolute discretion determine that the Executive has achieved the performance objectives agreed to between the Executive and the Chief Executive Officer. Any bonus payable during the first year of the Executive’s employment will be pro-rated. Payment of a bonus in any one year will not indicate the payment of a bonus in any other year.
|
(d)
|
The Company will facilitate the Executive’s enrolment in the Company’s insurance benefits plans, as amended from time to time. In all cases, eligibility to participate in the plans and to receive benefits under the plans will be subject to the terms and requirements of the plans themselves and/or the insurance provider. The Company is not responsible for the payment of benefits in any circumstance. Further, the Company reserves the right to change any of the insurance benefit plans or providers, however, if the Company is unable to maintain similar coverage as to the insurance benefits plans or the providers, then the Executive will be provided with compensation to assist in securing his own coverage, such compensation to be determined by the Company.
|
(e)
|
The Executive will be eligible for participation in the Company’s share incentive plan, subject to the terms of the plan.
|
(f)
|
The Company will reimburse the Executive for all reasonable expenses actually and properly incurred by the Executive in connection with the performance of his duties. The Executive will provide the Company with receipts supporting his claims for reimbursement.
|
(a)
|
The biotechnology industry is highly competitive and employees leaving the employ of the Company have the ability to cause significant damage to the Company’s interests if they join a competing business immediately upon leaving the Company.
|
(b)
|
Definitions:
|
(i)
|
“
Business
” or “
Business of the Company
” means:
|
(A)
|
the researching, developing, production and marketing of RNA interference drugs and delivery technology, as such business grows and evolves during this Agreement; and
|
(B)
|
any other material business carried on from time to time by the Company or any subsidiary or affiliate of the Company.
|
(ii)
|
“
Competing Business
” means any endeavour, activity or business which is competitive in any material way with the Business of the Company worldwide.
|
(iii)
|
“
Customer
” means any entity that is a customer of the Company that the Executive has been directly or indirectly, through his reports, involved in servicing on behalf of the Company.
|
(iv)
|
“
Prospective Customer
” means any entity during the course of his employment that was solicited by the Executive on behalf of the Company for the purposes of becoming a customer of the Company or whom he knows was solicited by the Company for the purpose of becoming a customer of the Company.
|
(c)
|
The Executive shall not, during the term of this Agreement and for the Restricted Period (as defined below) following the termination of his employment for any reason, on his own behalf or on behalf of any entity, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any entity, carry on or be employed by or engaged in or have any financial or other interest in or be otherwise commercially involved in a Competing Business. In this Agreement, “
Restricted Period
” means: (i) in the event that the Executive is terminated pursuant to Section 6(b) of this Employment Agreement, a period equivalent to the amount of notice that the Executive is entitled pursuant to Section 6(b)(ii); or (ii) in the event that the Executive’s employment is terminated pursuant to a Change of Control (as defined below), a period of twelve (12) months.
|
(d)
|
The Executive shall, however, not be in default of Section 4(c) by virtue of the Executive:
|
(i)
|
following the termination of employment, holding, strictly for portfolio purposes and as a passive investor, no more than five percent (5%) of the issued and outstanding shares of, or any other interest in, any corporation or other entity that is a Competing Business; or
|
(ii)
|
during the course of employment, holding, strictly for portfolio purposes and as a passive investor, no more than five percent (5%) of the issued and outstanding shares of, or any other interest in, any corporation or other entity, the business of which corporation or other entity is in the same Business as the Company, and provided further that the Executive first obtains the Company’s written consent, which consent will not be unreasonably withheld.
|
(e)
|
If the Executive holds issued and outstanding shares or any other interest in a corporation or other entity pursuant to Section 4(d)(ii) and following the acquisition of such shares or other interest the business of the corporation or other entity becomes a Competing Business, the Executive will promptly dispose of his shares or other interest in such corporation or other entity.
|
(f)
|
The Executive shall not, during this Agreement and for the Restricted Period following the termination of his employment, for whatever reason, on his own behalf or on behalf of or in connection with any other entity, without the prior written and informed consent of the Company, directly or indirectly, in any capacity whatsoever, alone, through or in connection with any entity:
|
(i)
|
canvass or solicit the business of (or procure or assist the canvassing or soliciting of the business of) any Customer or Prospective Customer of the Company, or otherwise solicit, induce or encourage any Customer or Prospective Customer of the Company to cease to engage the services of the Company, for any purpose which is competitive with the Business; or
|
(ii)
|
accept (or procure or assist the acceptance of) any business from any Customer or Prospective Customer of the Company which business is competitive with the Business; or
|
(iii)
|
supply (or procure or assist the supply of) any goods or services to any Customer or Prospective Customer of the Company for any purpose which is competitive with the Business; or
|
(iv)
|
employ, engage, offer employment or engagement to or solicit the employment or engagement of or otherwise entice away from or solicit, induce or encourage to leave the employment or engagement of the Company, any individual who is employed or engaged by the Company whether or not such individual would commit any breach of his contract or terms of employment or engagement by leaving the employ or the engagement of the Company; or
|
(v)
|
procure or assist any entity to employ, engage, offer employment or engagement or solicit the employment or engagement of any individual who is employed or engaged by the Company or otherwise entice away from the employment or engagement of the Company any such individual. Notwithstanding the foregoing, the Executive shall, be permitted to, solely in a personal capacity, provide letters of reference for individuals who are employed by the Company.
|
(g)
|
The Executive expressly recognizes and acknowledges that it is the intent of the parties that his activities following the termination of his employment with the Company be restricted in the manner described in this Agreement, and acknowledges that good, valuable, and sufficient consideration has been provided in exchange for such restrictions.
|
(a)
|
The Executive understands and agrees that the Company has a material interest in preserving the relationships it has developed with its executives, customers and suppliers against impairment by competitive activities of a former executive. Accordingly, the Executive agrees that the restrictions and covenants contained in Section 4 are reasonably required for the protection of the Company and its goodwill and that the Executive’s agreement to those restrictions and covenants by the execution of this Agreement, are of the essence to this Agreement and constitute a material inducement to the Company to enter into this Agreement and to employ the Executive, and that the Company would not enter into this Agreement absent such an inducement.
|
(b)
|
The Executive understands and acknowledges that if the Executive breaches Section 4, that breach will give rise to irreparable injury to the Company for which damages are an inadequate remedy, and the Company may pursue injunctive relief for such breach in a court of competent jurisdiction.
|
(a)
|
The Executive may terminate his employment by giving at least three (3) months’ advance notice in writing to the Company of the effective date of the resignation. The Company may waive such notice, in whole or in part, and if it does so, the Executive’s resignation will become effective and his employment will cease on the date set by the Company in the notice of waiver.
|
(b)
|
The Company may terminate the Executive’s employment:
|
(i)
|
without notice or payment in lieu thereof, for just cause, which for the purposes of this Agreement will be defined to include but not be limited to the Executive’s willful and continued failure to perform his duties hereunder and the Executive’s willful engagement in conduct that is injurious to the Company, monetarily or otherwise; or
|
(ii)
|
at the Company's sole discretion for any reason, without cause, upon providing to the Executive:
|
(A)
|
an amount equal to twelve (12) months’ Base Salary; plus
|
(B)
|
a bonus payment equal to the average of the actual bonus payments, if any, made to the Executive from the previous three (3) calendar years preceding the date of termination of employment, pro-rated for the then current calendar year up to and including the day of termination;
|
(c)
|
In this Agreement, “
Change of Control
” means the first occurrence of any one of:
|
(i)
|
the acquisition or continuing ownership by any person or persons acting jointly or in concert (as such phrase is defined in the
Securities Act
(British Columbia)), directly or indirectly, of common shares or of convertible securities, which, when added to all other securities of the Company at the time held by such person or persons, or persons associated or affiliated with such person or persons within the meaning of the
Business Corporations Act
(British Columbia) (collectively, the "
Acquirors
"), and assuming the conversion, exchange or exercise of convertible securities beneficially owned by the Acquirors, results in the Acquirors beneficially owning shares that would, notwithstanding any agreement to the contrary, entitle the holders thereof for the first time to cast more than 50% of the votes attaching to all shares in the capital of the Company that may be cast to elect directors;
|
(ii)
|
the sale, lease or exchange or other disposition of all or substantially all of the Company's assets;
|
(iii)
|
an amalgamation, merger, arrangement or other business combination (a "
Business Combination
") involving the Company that results in the security holders of the parties to the Business Combination, other than the Company, owning, directly or indirectly, shares of the continuing entity that entitle the holders thereof to cast more than 50% of the votes attaching to all shares in the capital of the continuing entity that may be cast to elect directors; or
|
(iv)
|
the Company’s Board of Directors, by resolution, determines that a Change of Control of the Company has occurred.”
|
(d)
|
If a Change of Control occurs and within twelve (12) months after the occurrence of a Change of Control, the Executive resigns his employment for Good Reason upon giving the Company not less than three (3) months’ prior written notice of resignation; or at the Company’s sole discretion, the Executive is terminated without cause within twelve (12) months after a Change of Control, the Executive will be entitled to receive the Change of Control Severance Amount (as defined below), which, in the case of termination, shall be instead of the Severance Amount. In this Agreement, “
Good Reason
” means one or more of the following events occurring without the Executive’s written consent:
|
(i)
|
a fundamental change in the Executive’s status, position, remuneration, authority or responsibilities that does not represent a promotion from or represents an adverse change from the status, position, authority or responsibilities in effect immediately prior to the Change of Control;
|
(ii)
|
a fundamental reduction in the Base Salary or retirement plans, health benefits, bonus potential or other compensation plans, practices, policies or programs provided to the Executive immediately prior to the Change of Control;
|
(iii)
|
relocation of the Executive’s principal place of employment to a place outside of Metro Vancouver;
|
(iv)
|
any request by the Company that the Executive participate in an unlawful act pursuant to the laws of British Columbia or Canada; or
|
(v)
|
any failure to secure the agreement of any successor company or other entity to the Company to fully assume the Company’s obligations under this Agreement.
|
(e)
|
In this Agreement, the “
Change of Control Severance Amount
” means an amount calculated as follows:
|
(i)
|
an amount equal to:
|
(A)
|
twelve (12) month’s Base Salary, in the event of termination on or before October 7, 2015, or
|
(B)
|
eighteen (18) month’s Base Salary, in the event of termination after October 7, 2015; plus
|
(ii)
|
a bonus payment equal to the average of the actual bonus payments, if any, made to the Executive from the previous three (3) calendar years preceding the date of termination of employment, pro-rated for the then current calendar year up to and including the day of termination.
|
(f)
|
No matter how the Executive’s employment is terminated, the Executive will be entitled to any wages and bonus payable for service up to and including the day of termination.
|
(a)
|
Non-Waiver.
Failure on the part of either party to complain of any act or failure to act of the other of them or to declare the other party in default of this Agreement, irrespective of how long such failure continues, will not constitute a waiver by such party of their rights hereunder or of the right to then or subsequently declare a default.
|
(b)
|
Severability.
In the event that any provision or part of this Agreement is determined to be void or unenforceable in whole or in part, the remaining provisions, or parts thereof, will be and remain in full force and effect.
|
(c)
|
Entire Agreement.
This Agreement constitutes the entire agreement between the parties with respect to the employment of the Executive and supersedes any and all agreements, understandings, warranties or representations of any kind, written or oral, express or implied, including any relating to the nature of the position or its duration, and each of the parties releases and forever discharges the other of and from all manner of actions, causes of action, claim or demands whatsoever under or in respect of any agreement.
|
(d)
|
Survival.
The provisions of Sections 1(f), 4 and 8(f) will survive the termination of this Agreement.
|
(e)
|
Modification of Agreement.
Any modification of this Agreement must be in writing and signed by both the Company and the Executive or it will have no effect and will be void.
|
(f)
|
Disputes.
Except for disputes arising in respect of Section 4, all disputes arising out of or in connection with this Agreement and the employment relationship between the parties, are to be referred to and finally resolved by arbitration administered by the British Columbia International Commercial Arbitration Centre, pursuant to its Rules. The place of arbitration will be Vancouver, British Columbia.
|
(g)
|
Governing Law.
This Agreement will be governed by and construed according to the laws of the Province of British Columbia.
|
(h)
|
Reimbursement of Legal Fees.
The Company will reimburse the Executive for all reasonable and receipted legal fees incurred by the Executive in the negotiation, drafting, and completion of this Agreement.
|
(i)
|
Independent Legal Advice.
The Executive agrees that the contents, terms and effect of this Agreement have been explained to his by a lawyer and are fully understood. The Executive further agrees that the consideration described aforesaid is accepted voluntarily for the purpose of employment with the Company under the terms and conditions described above.
|
SIGNED, SEALED AND DELIVERED by
Bruce Cousins
in the presence of:
|
)
)
)
)
)
|
/s/ Bruce Cousins
|
Witness
|
)
)
|
BRUCE COUSINS
|
Address
|
)
)
|
|
)
)
|
||
Occupation
|
)
|
1.
|
INTERPRETATION
|
(a)
|
“
Business
” or “
Business of the Company
” means:
|
(i)
|
the researching, developing, production and marketing of RNA interference drugs and delivery technology, as such business grows and evolves during this Agreement; and
|
(ii)
|
any other material business carried on from time to time by the Company or any subsidiary or affiliate of the Company.
|
(b)
|
“
Confidential Information
” shall mean any information relating to the Business of the Company, whether or not conceived, originated, discovered or developed in whole or in part by the Executive, that is not generally known to the public or to other persons who are not bound by obligations of confidentiality and:
|
(i)
|
from which the Company derives economic value, actual or potential, from the information not being generally known; or
|
(ii)
|
in respect of which the Company otherwise has a legitimate interest in maintaining secrecy;
|
(iii)
|
all proprietary information licensed to, acquired, used or developed by the Company in its research and development activities (including but not restricted to the research and development of RNA interference drugs and delivery technology), other scientific strategies and concepts, designs, know-how, information, material, formulas, processes, research data and proprietary rights in the nature of copyrights, patents, trademarks, licenses and industrial designs;
|
(iv)
|
all information relating to the Business of the Company, and to all other aspects of the Company’s structure, personnel and operations, including financial, clinical, regulatory, marketing, advertising and commercial information and strategies, customer lists, compilations, agreements and contractual records and correspondence; programs, devices, concepts, inventions, designs, methods, processes, data, know-how, unique combinations of separate items that is not generally known and items provided or disclosed to the Company by third parties subject to restrictions on use or disclosure;
|
(v)
|
all know-how relating to the Business of the Company including, all biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety, manufacturing and quality control data and information, and all applications, registrations, licenses, authorizations, approvals and correspondence submitted to regulatory authorities;
|
(vi)
|
all information relating to the businesses of competitors of the Company including information relating to competitors’ research and development, intellectual property, operations, financial, clinical, regulatory, marketing, advertising and commercial strategies, that is not generally known;
|
(vii)
|
all information provided by the Company’s agents, consultants, lawyers, contractors, licensors or licensees to the Company and relating to the Business of the Company; and
|
(viii)
|
all information relating to the Executive’s compensation and benefits, including his salary, vacation, stock options, rights to continuing education, perquisites, severance notice, rights on termination and all other compensation and benefits, except that he shall be entitled to disclose such information to his bankers, advisors, agents, consultants and other third parties who have a duty of confidence to him and who have a need to know such information in order to provide advice, products or services to him.
|
(c)
|
“
Effective Date
” means
October 7, 2013
, being the date that the Executive started working at the Company, as indicated in his employment agreement with the Company.
|
(d)
|
“
Inventions
” shall mean any and all inventions, discoveries, developments, enhancements, improvements, concepts, formulas, designs, processes, ideas, writings and other works, whether or not reduced to practice, and whether or not protectable under patent, copyright, trade secret or similar laws.
|
(e)
|
“
Work Product
” shall mean any and all Inventions and possible Inventions relating to the Business of the Company and which the Executive may make or conceive, alone or jointly with others, during his involvement in any capacity with the Company, whether during or outside his regular working hours, except those Inventions made or conceived by the Executive entirely on his own time that do not relate to the Business of the Company and do not derive from any equipment, supplies, facilities, Confidential Information or other information, gained, directly or indirectly, from or through his involvement in any capacity with the Company.
|
2.
|
CONFIDENTIALITY
|
(a)
|
use or copy any Confidential Information or recollections thereof for any purpose other than the performance of his duties for the benefit of the Company;
|
(b)
|
publish or disclose any Confidential Information or recollections thereof to any person other than to employees of the Company who have a need to know such Confidential Information in the performance of their duties for the Company;
|
(c)
|
permit or cause any Confidential Information to be used, copied, published, disclosed, translated or adapted except as otherwise expressly permitted by this Agreement; or
|
(d)
|
permit or cause any Confidential Information to be stored off the premises of the Company, including permitting or causing such Confidential Information to be stored in electronic format on personal computers, except in accordance with written procedures of the Company, as amended from time to time in writing.
|
(a)
|
information that is already known to the Executive, though not due to a prior disclosure by the Company or by a person who obtained knowledge of the information, directly or indirectly, from the Company;
|
(b)
|
information disclosed to the Executive by another person who is not obliged to maintain the confidentiality of that information and who did not obtain knowledge of the information, directly or indirectly, from the Company;
|
(c)
|
information that is developed by the Executive independently of Confidential Information received from the Company and such independent development can be documented by the Executive;
|
(d)
|
other particular information or material which the Company expressly exempts by written instrument signed by the Company;
|
(e)
|
information or material that is in the public domain through no fault of the Executive; and
|
(f)
|
(i)
|
in the event that the Executive is required to disclose such information or material, upon becoming aware of the obligation to disclose, the Executive will provide to the Company prompt written notice so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement;
|
(ii)
|
if the Company agrees that the disclosure is required by law, it will give the Executive written authorization to disclose the information for the required purposes only;
|
(iii)
|
if the Company does not agree that the disclosure is required by law, this Agreement will continue to apply, except to the extent that a Court of competent jurisdiction orders otherwise; and
|
(iv)
|
if a protective order or other remedy is not obtained or if compliance with this Agreement is waived, the Executive will furnish only that portion of the Confidential Information that is legally required and will exercise all reasonable efforts to obtain confidential treatment of such Confidential Information.
|
3.
|
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS
|
(a)
|
making patent applications for all Work Product, including instructions to lawyers and/or patent agents as to the characteristics of the Work Product in sufficient detail to enable the preparation of a suitable patent specification, to execute all formal documentation incidental to an application for letters patent and to execute assignment documents in favour of the Company for such applications;
|
(b)
|
making applications for all other forms of intellectual property registration relating to all Work Product;
|
(c)
|
prosecuting and maintaining the patent applications and other intellectual property relating to all Work Product; and
|
(d)
|
registering, maintaining and enforcing the patents and other intellectual property registrations relating to all Work Product.
|
4.
|
GENERAL
|
SIGNED, SEALED AND DELIVERED by Bruce Cousins in the presence of:
|
)
)
)
)
)
|
/s/ Bruce Cousins
|
Witness Signature
|
)
)
|
BRUCE COUSINS
|
Witness Name
|
)
)
|
|
Witness Address
|
)
)
|
|
)
)
|
||
Witness Occupation
|
)
|
4.8
|
Third-Party Infringement of Joint Project Intellectual Property
.
|
1.1
|
The following list of materials (the “
Materials
”) and a description of each is herewith provided by the Providing Party (named below) to the Receiving Party (named below) along with this Materials Transfer Transmittal (this “
Transmittal
”). These materials are being provided pursuant to the Protiva-Monsanto Services Agreement (the “
Agreement
”), dated as of [____], 2013, by and among Protiva Biotherapeutics, Inc., a Delaware corporation and a wholly-owned subsidiary of [Tekmira], a Canadian corporation, (“
Protiva
”), [AGNEW-CO], a Canadian [___] and a wholly-owned subsidiary of Protiva (“
Company
”), and Monsanto Company, a Delaware corporation (“
M
ons
a
nto
”). The Receiving Party acknowledges and agrees that the materials described herein shall be used solely in connection with the performance of the Services contemplated by the Agreement and the PadCo-Protiva Services Agreement and the licenses for such use provided by one party to the other. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Agreement.
|
1.2
|
The Receiving Party acknowledges receipt of the Materials. The Receiving Party may refuse to accept the Materials from a Providing Party by promptly returning all applicable Materials to the Providing Party without any use thereof being made and providing written notice of such return to the Providing Party.
|
1.3
|
This Transmittal shall become effective upon the date first written above and shall continue in full force and effect thereafter and be co-extensive and subject to the Agreement.
|
1.4
|
This Transmittal may only be terminated in accordance with the provisions of the Agreement. In the event that the Agreement and this Transmittal are terminated, the Receiving Party will give the Providing Party an inventory of the Materials in the Receiving Party’s possession and at the time of such termination and such remaining Materials shall be treated as specified in the Agreement.
|
Providing Party:
[
NAME]
By: ____________________
Name:
Title:
Address:
|
Receiving Party:
[
NAME]
By: ____________________
Name:
Title:
Address:
|
Page
|
|||
INTRODUCTION
|
1
|
||
1.
|
Certain Defined Terms
|
1
|
|
2.
|
Conduct of Research Program
|
13
|
|
(a)
|
Rights and Responsibilities
|
13
|
|
(b)
|
PadCo-Protiva License and Services Agreement
|
13
|
|
(c)
|
Protiva-Monsanto Services Agreement
|
13
|
|
(d)
|
Diligence
|
13
|
|
(e)
|
Initiation of Phase A, Phase B and Phase C
|
13
|
|
3.
|
Call Option
|
14
|
|
(a)
|
Option Grant
|
14
|
|
(b)
|
Upfront Option Payment and Milestone Payments
|
14
|
|
(c)
|
Option Exercise
|
15
|
|
(d)
|
Closing
|
17
|
|
(e)
|
Payment at Closing
|
17
|
|
(f)
|
Right to Setoff
|
17
|
|
(g)
|
Withholding Rights and Tax Treatment of Transactions
|
18
|
|
(h)
|
Change of Control of Protiva or Tekmira
|
18
|
|
4.
|
Representations and Warranties Regarding the Company
|
19
|
|
5.
|
Representations and Warranties Regarding Protiva and Tekmira
|
19
|
|
6.
|
Representations and Warranties of Monsanto Canada
|
19
|
|
7.
|
Covenants and Restrictions
|
19
|
|
(a)
|
Acknowledgement of Transfer Restriction
|
19
|
|
(b)
|
No Assignment
|
19
|
|
(c)
|
Due Diligence Investigation.
|
19
|
|
(d)
|
Prior to Closing
|
20
|
|
(e)
|
Payment of Taxes, Etc.
|
22
|
|
(f)
|
Material Contracts
|
22
|
|
(g)
|
No Shop
|
23
|
|
(h)
|
Disclosure Schedule and Supplement
|
23
|
|
(i)
|
Third Party Consents and Regulatory Approvals
|
24
|
|
(j)
|
Use of Proceeds
|
24
|
|
(k)
|
Monsanto Canada Director
|
24
|
|
(l)
|
Grant of Proxy
|
25
|
|
(m)
|
Confidential Information
|
25
|
|
(n)
|
Financial Reporting
|
27
|
(o)
|
Notification of Certain IP Matters
|
28
|
|
(p)
|
Certain Business Practices Covenant
|
29
|
|
(q)
|
Export Controls Covenant
|
29
|
|
(r)
|
PadCo-Protiva License and Services Agreement
|
30
|
|
(s)
|
Tekmira
|
30
|
|
8.
|
Closing Conditions
|
30
|
|
(a)
|
Conditions of Monsanto Canada
|
30
|
|
(b)
|
Conditions of Protiva
|
32
|
|
9.
|
Termination
|
33
|
|
(a)
|
Automatic Termination; Termination Upon Failure to Elect to Continue
|
33
|
|
(b)
|
Breach by Company or Protiva
|
33
|
|
(c)
|
Breach of This Agreement by Monsanto Canada
|
33
|
|
(d)
|
Acquisition of Protiva or Tekmira by a Principal Competitor
|
33
|
|
(e)
|
Phase A
|
33
|
|
(f)
|
Phase B
|
33
|
|
(g)
|
Phase C
|
34
|
|
(h)
|
Survival
|
34
|
|
(i)
|
Rights Upon Termination
|
34
|
|
10.
|
Certain Covenants
|
34
|
|
(a)
|
Reporting
|
34
|
|
(b)
|
Exclusivity
|
34
|
|
11.
|
Indemnification
|
34
|
|
12.
|
Miscellaneous
|
34
|
|
(a)
|
Further Assurances
|
35
|
|
(b)
|
Notices
|
35
|
|
(c)
|
Entire Agreement
|
35
|
|
(d)
|
Amendments, Waivers and Consents
|
35
|
|
(e)
|
Binding Effect; Assignment
|
35
|
|
(f)
|
Public Announcements
|
36
|
|
(g)
|
General
|
36
|
|
(h)
|
Severability
|
36
|
|
(i)
|
Counterparts
|
36
|
|
(j)
|
Governing Law; Jurisdiction
|
36
|
|
(k)
|
Joint Research Committee
|
37
|
|
(l)
|
Disclosure of Protiva Project Compounds
|
39
|
|
(m)
|
Specific Enforcement
|
39
|
|
(n)
|
No Finder’s Fees
|
40
|
|
(o)
|
Titles and Subtitles
|
40
|
|
(p)
|
Delays or Omissions
|
40
|
Term
|
Section
|
Acquisition Proposal
|
7(g)
|
Acquisition Transaction
|
7(g)
|
Agreement
|
Preamble
|
Term | Section |
Amended Disclosure Schedule
|
7(h)
|
Call Option
|
3(a)
|
Change of Control Exercise Payment
|
3(h)(iii)
|
Closing
|
3(d)
|
Closing Date
|
3(d)
|
Closing Payment
|
3(c)(i)(A)
|
Company
|
Preamble
|
Company Cure Period
|
9(b)
|
Company Indemnified Parties
|
11(b)(ii) of Appendix A
|
Company Shares
|
7(k)
|
Disclosure Schedule
|
7(h)
|
Dispute Negotiation Period
|
12(k)(i)
|
Early Option Exercise Price Certificate
|
3(c)(ii)(A)
|
Early Exercise Closing Payment
|
3(c)(ii)(A)
|
Effective Date
|
Preamble
|
Environmental Laws
|
4(w) of Appendix A
|
Exercise Date
|
3(c)
|
Exercise Notice
|
3(c)
|
FCPA
|
4(i) of Appendix A
|
Financial Statements
|
4(k) of Appendix A
|
Fundamental Representations
|
11(a) of Appendix A
|
Hazardous Substance
|
4(w) of Appendix A
|
Holdback Amount
|
3(c)(i)(B)
|
Indemnified Party
|
11(d)(i) of Appendix A
|
Indemnifying Party
|
11(d)(i) of Appendix A
|
Joint Patent Prosecution Matters
|
Schedule 12(k)
|
JRC
|
12(k)
|
JRC Party
|
12(k)
|
JRC Parties
|
12(k)
|
Milestone Achievement Notice
|
3(b)(i)
|
Monsanto Canada
|
Preamble
|
Monsanto Canada Cure Period
|
9(c)
|
Monsanto Canada Director
|
7(k)
|
Monsanto Indemnified Parties
|
11(b) of Appendix A
|
Monsanto
|
Introduction
|
Term | Section |
Option Exercise Price Certificate
|
3(c)(i)(A)
|
Option Insect Milestone A Payment
|
3(b)(vi)
|
Option Insect Milestone B Payment
|
3(b)(viii)
|
Option Insect Milestone C Payment
|
3(b)(x)
|
Option Phase A Initiation Payment
|
2(e)(ii)
|
Option Phase B Initiation Payment
|
2(e)(iii)
|
Option Phase C Initiation Payment
|
2(e)(iv)
|
Option Plant Milestone A Payment
|
3(b)(v)
|
Option Plant Milestone B Payment
|
3(b)(vii)
|
Option Plant Milestone C Payment
|
3(b)(ix)
|
Option Set-up Milestone Payment
|
3(b)(iii)
|
Option Shipment Milestone Payment
|
3(b)(iv)
|
Organizational Documents
|
4(v) of Appendix A
|
PadCo-Protiva License and Services Agreement
|
Introduction
|
PCBs
|
4(w) of Appendix A
|
Permits
|
4(h)(ii) of Appendix A
|
Permitted Recipients
|
12(l)
|
Phase Completion Notice
|
2(e)(i)
|
Phase Election Period
|
2(e)(i)
|
Project Patent Response Deadline
|
Schedule 12(k)
|
Proposed Joint Patent Abandonment
|
Schedule 12(k)
|
Proposed Project Patent Abandonment
|
Schedule 12(k)
|
Prosecution Matters Resolution Period
|
Schedule 12(k)
|
Protiva
|
Preamble
|
Protiva Monsanto Services Agreement
|
Introduction
|
Protiva Patent Prosecution Matters
|
Schedule 12(k)
|
Protiva Project Compound
|
12(l)
|
Proxy Shares
|
7(l)
|
Regulatory Filings
|
4(h)(iii) of Appendix A
|
Research Program
|
Introduction
|
Substantive Action
|
7(o)
|
Tax Representations
|
11(a) of Appendix A
|
Tekmira
|
Preamble
|
Third Party Claim
|
11(d)(i) of Appendix A
|
Threshold
|
11(c)(i) of Appendix A
|
UK Bribery Act
|
4(i) of Appendix A
|
Term | Section |
Upfront Option Payment
|
3(b)(ii)
|
PROTIVA BIOTHERAPEUTICS INC. | PROTIVA AGRICULTURAL | |||
DEVELOPMENT COMPANY, INC. | ||||
By: | By: | |||
Name: | Name: | |||
Title: | Title: | |||
Address: | Address: | |||
TEKMIRA PHARMACEUTICALS | MONSANTO CANADA, INC. | |||
CORPORATION | ||||
By: | By: | |||
Name: | Name: | Robert M. McCarroll, Ph. D. | ||
Title: | Title: | Authorized Signatory | ||
Address: | Address: |
Very truly yours, | ||
Joint Research Committee | ||
Name: | ||
Name: |
FOR IMMEDIATE RELEASE: | January 13, 2014 |
PROTIVA BIOTHERAPEUTICS INC. | |||
By: | |||
Name: | |||
Title: |
PROTIVA BIOTHERAPEUTICS INC. | |||
By: | |||
Name:
|
|||
Title: |
Very truly yours, | ||
Joint Research Committee | ||
Name: | ||
Name: |
Page | |||
ARTICLE I – DEFINITIONS
|
1
|
||
1.1
|
General
|
1
|
|
1.2
|
Interpretation
|
9
|
|
ARTICLE II – LICENSE GRANTS AND RELATED RIGHTS
|
9
|
||
2.1
|
License Grants to Licensee
|
9
|
|
2.2
|
Sublicensing
|
10
|
|
2.3
|
Grant Back
|
10
|
|
2.5
|
Retained Rights
|
10
|
|
2.6
|
Rights in Bankruptcy
|
11
|
|
2.7
|
Diligence
|
11
|
|
2.8
|
Compliance With Applicable Laws
|
12
|
|
ARTICLE III – FINANCIAL PROVISIONS
|
12
|
||
3.1
|
Payments for Services
|
12
|
|
3.2
|
Payment for License
|
12
|
|
3.3
|
Other Payments
|
13
|
|
3.4
|
Protiva Subsection 85(1) Election
|
13
|
|
3.5
|
Tekmira Subsection 85(1) Election
|
14
|
|
ARTICLE IV – SERVICES
|
15
|
||
4.1
|
General
|
15
|
|
4.2
|
Operation
|
16
|
|
ARTICLE V – INTELLECTUAL PROPERTY
|
16
|
||
5.1
|
Ownership
|
16
|
|
5.2
|
Prosecution and Maintenance of Patents
|
17
|
|
5.3
|
Third-Party Infringement
|
17
|
|
5.3
|
Third-Party Infringement
|
18
|
|
5.4
|
Defense of Claims Brought by Third Parties
|
20
|
|
ARTICLE VI – CONFIDENTIAL INFORMATION AND PUBLICITY
|
21
|
||
ARTICLE VII – INDEMNIFICATION AND INSURANCE
|
23
|
||
7.1
|
Protiva Indemnification
|
23
|
|
7.2
|
Licensee Indemnification
|
23
|
Page | |||
7.3
|
Tender of Defense; Counsel
|
23
|
|
7.4
|
Insurance
|
25
|
|
ARTICLE VIII – TERM AND TERMINATION
|
25
|
||
8.1
|
Term
|
25
|
|
8.2
|
Material Breach
|
25
|
|
8.4
|
Rights in Bankruptcy
|
26
|
|
8.5
|
Consequences of Termination; Survival
|
26
|
|
8.6
|
Remedies
|
26
|
|
ARTICLE IX – MISCELLANEOUS
|
27
|
||
9.1
|
Representations and Warranties
|
27
|
|
9.3
|
Force Majeure
|
29
|
|
9.4
|
Consequential Damages
|
29
|
|
9.5
|
Assignment
|
30
|
|
9.6
|
Notices
|
30
|
|
9.7
|
Independent Contractors
|
31
|
|
9.8
|
Governing Law; Jurisdiction
|
31
|
|
9.9
|
Severability
|
31
|
|
9.1
|
No Implied Waivers
|
31
|
|
9.11
|
Headings
|
32
|
|
9.12
|
Entire Agreement; Amendment
|
32
|
|
9.13
|
Waiver of Rule of Construction
|
32
|
|
9.14
|
No Third-Party Beneficiaries
|
32
|
|
9.15
|
Further Assurances
|
32
|
|
9.16
|
Performance by Affiliates
|
32
|
|
9.17
|
Counterparts
|
32
|
PROTIVA AGRICULTURAL DEVELOPMENT COMPANY, INC. | ||
By: | ||
Name: | ||
Title: | ||
TEKMIRA PHARMACEUTICALS CORPORATION | ||
By: | ||
Name: | ||
Title: | ||
PROTIVA BIOTHERAPEUTICS INC. | ||
By: | ||
Name: | ||
Title: |
1.
|
I have reviewed this Form 10-K Tekmira Pharmaceuticals Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
D
isclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
T
he registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Mark J. Murray
|
|||
Name:
|
Mark J. Murray
|
||
Title:
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Form 10-K of Tekmira Pharmaceuticals Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
D
isclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Bruce Cousins
|
|||
Name:
|
Bruce Cousins
|
||
Title:
|
Executive Vice President, Finance and
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly represents, in all material respects, the financial condition and results of the operations of the Company.
|
/s/ Mark J. Murray
|
|||
Name:
|
Mark J. Murray
|
||
Title:
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly represents, in all material respects, the financial condition and results of the operations of the Company.
|
/s/ Bruce Cousins
|
|||
Name:
|
Bruce Cousins
|
||
Title:
|
Executive Vice President, Finance and
Chief Financial Officer
|