SA Article - Unilfe: New Contracts Will Triple Share Price, page-21

Read the latest announcement. The instos would get it over the line easy. The announcement was virtually begging people to vote yes to Res 5 and 6. Now to knock the Res on the head some instos must have voted NO.

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Proposal 6 (to approve a special grant of restricted stock to our CEO, Alan D. Shortall):

1. Mr. Shortall is the Founder, Chairman and Chief Executive Officer, and a highly valued employee. The importance of Mr. Shortall to our Company is reflected in contractual terms with some key customers and partners whereby any change in management replacing him as Chairman or CEO, or a successor approved by him, could provide those parties with the right to terminate applicable agreements. Mr. Shortall has not received an equity award in nearly three years. His current total cash compensation is at or below peer group averages and his annual cash bonus structure provides no opportunity above target. If the proposed special equity award is not approved, an alternative compensation structure will be necessary to retain and motivate Mr. Shortall. Without the availability of equity for this purpose, it is likely that a cash structure will be used. No stockholder approval will be required for this purpose. As noted above with respect Proposal 5, if more of our cash resources are devoted to compensation, our ability to implement necessary capital investments may be compromised.

2. Mr. Shortall’s total executive compensation program was prepared independently on behalf of the Board of Directors according to industry best practices by Radford, a market leader for compensation intelligence and consulting services within the technology and life science industries. Each year, Radford provides strategic consulting services, such as executive compensation, to more than 200 technology and life science clients with a strong presence working with middle management companies such as Unilife. During a six month period of thoughtful review, Radford independently created what it considered a fair compensation program for Mr. Shortall that took into account a multitude of factors including shareholder alignment, governance best practices, peer-based compensation and the fast-growing nature of Unilife’s business. In contrast to many other U.S. based companies, Unilife does not make annual equity awards to our CEO. As such, the last equity awards we issued to Mr. Shortall were granted more than 32 months ago. Absent the occurrence of extraordinary events or a material change in our circumstances, it is expected that this will be the only equity award received by Mr. Shortall during the remaining five years of his current employment agreement term.
3. The terms of the proposed special equity award reflect several “best practice” features advocated by governance experts. The proposed special equity award will result in Mr. Shortall’s total compensation being more heavily weighted toward equity, thus
strengthening the alignment of management and stockholder interests. Moreover, 100% of the award is performance-based, which creates an extraordinary pay-for-performance linkage and makes us a pioneer among our peers. For Mr. Shortall to realize the full value of this award, it will generally be necessary for our stockholder value to grow by more than 300%, or over $1 billion, and for Mr. Shortall to remain in service with us for at least four years.

4. In conjunction with the compensation committee’s approval of the proposed special equity award, Mr. Shortall relinquished his contractual right to a gross-up for 280G (“golden parachute”) excise taxes. The potential value given up by Mr. Shortall totals in
excess of $10 million in the event that Unilife’s share price reaches the $12 per share vesting milestone. This was another major step in further aligning our compensation program with “best practices” promoted by governance experts.

That to me is a big plead for a YES vote. Otherwise, why would they do it.