¨
|
Preliminary
Proxy Statement
|
¨
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
ý
|
Definitive
Proxy Statement
|
¨
|
Definitive
Additional Materials
|
¨
|
Soliciting
Material Pursuant to §240.14a-12
|
x
|
No
fee required
|
¨
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
||
(2)
|
Aggregate
number of securities to which transaction applies:
|
||
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
|
||
(4)
|
Proposed
maximum aggregate value of transaction:
|
||
(5)
|
Total
fee paid:
|
¨
|
Fee
paid previously with preliminary
materials.
|
¨
|
Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing.
|
(1)
|
Amount
Previously Paid:
|
||
(2)
|
Form,
Schedule or Registration Statement No.:
|
||
(3)
|
Filing
Party:
|
||
(4)
|
Date
Filed:
|
||
|
1.
|
To
elect seven directors to the board to serve until the 2010 annual meeting
of stockholders or until their successors are duly elected and
qualified;
|
|
2.
|
To
amend the Company’s Amended and Restated Certificate of Incorporation to
increase the authorized number of shares of common stock of Aeolus from
150,000,000 shares to 200,000,000 shares;
and
|
|
3.
|
To
ratify the selection by the Audit Committee of the Board of Directors of
Haskell & White LLP as the Company’s independent registered public
accounting firm to audit the Company’s financial statements for the fiscal
year ending September 30, 2009;
|
|
4.
|
To
act upon such other matters as may properly come before the meeting or any
adjournments or postponements
thereof.
|
|
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER
MEETING TO BE HELD ON MARCH 26,
2009.
|
By
Order of the Board of Directors,
|
||
|
|
|
By:
|
/s/
Michael P. McManus
|
|
Chief
Financial Officer,
|
||
Treasurer and
Secretary
|
||
Mission
Viejo, California
|
||
Date: January
28, 2009
|
|
1.
|
FOR
the election of the seven nominees for director identified
below;
|
|
2.
|
FOR
the amendment of the Company’s Amended and Restated Certificate of
Incorporation to increase the authorized number of shares of common stock
of Aeolus from 150,000,000 shares to 200,000,000
shares;
|
|
3.
|
FOR
the ratification of the selection by the Audit Committee of the Board of
Directors of Haskell & White LLP as the Company’s
independent registered public accounting firm to audit the
Company’s financial statements for the fiscal year ending September 30,
2009; and
|
|
4.
|
In
the discretion of the proxies with respect to any other matters properly
brought before the stockholders at the Annual
Meeting.
|
Name of Nominee
|
Age
as of
January
26,
2009
|
Director Since
|
David
C. Cavalier
|
39
|
April
2004
|
John
M. Farah, Jr., Ph.D.
|
56
|
October
2005
|
Joseph
J. Krivulka
|
56
|
June
2004
|
Amit
Kumar, Ph.D.
|
44
|
June
2004
|
Michael
E. Lewis, Ph.D.
|
57
|
June
2004
|
Chris
A. Rallis
|
55
|
June
2004
|
Peter
D. Suzdak, Ph.D.
|
50
|
June
2004
|
|
·
|
each
person known by Aeolus to beneficially own more than 5% of the outstanding
shares of each class of the
|
|
·
|
each of Aeolus’
directors;
|
|
·
|
each of Aeolus’ Named Executive
Officers (as defined under “Executive Compensation” below);
and
|
|
·
|
all of Aeolus’ directors and
executive officers as a
group.
|
Preferred
Stock
|
Common
Stock
|
||||||
Identity
of Owner or Group (1)(2)
|
Beneficially
Owned
|
Percentage
Owned
|
|
Beneficially
Owned
|
Percentage
Owned(4)
|
||
Directors:
|
|||||||
David
C. Cavalier
|
-
|
-
|
22,393,254
|
(5)
|
57.2%
|
||
John
M. Farah, Jr., Ph.D. (6)
|
-
|
-
|
82,654
|
*
|
|||
Joseph
J. Krivulka (6)
|
-
|
-
|
103,813
|
*
|
|||
Amit
Kumar, Ph.D. (6)
|
-
|
-
|
107,938
|
*
|
|||
Michael
E. Lewis, Ph.D. (6)
|
-
|
-
|
103,250
|
*
|
|||
Chris
A. Rallis (6)
|
-
|
-
|
107,938
|
*
|
|||
Peter
D. Suzdak, Ph.D. (6)
|
-
|
-
|
106,063
|
*
|
|||
Named
Executive Officers:
|
|||||||
Brian
Day, Ph.D. (7)
|
-
|
-
|
247,978
|
*
|
|||
John
L. McManus (8)
|
-
|
-
|
816,667
|
2.5%
|
|||
Michael
P. McManus (9)
|
-
|
-
|
304,850
|
*
|
|||
All
directors and executive officers as a group (10
persons)
|
-
|
-
|
24,374,405
|
(10)
|
63.8%
|
||
Greater
than 5% Stockholders:
|
|||||||
BVF
Partners, L.P. and its affiliates
|
-
|
-
|
1,881,869
|
(11)
|
5.8%
|
||
900
N. Michigan Ave, Suite 1100
|
|||||||
Chicago
IL 60611
|
|||||||
Elan
Corporation, plc
|
475,087
|
100.0%
|
(3)
|
475,087
|
(12)
|
1.5%
|
|
Lincoln
House
|
|||||||
Lincoln
Place
|
|||||||
Dublin
2, Ireland
|
|||||||
Efficacy
Biotech Master Fund Ltd
|
-
|
-
|
16,660,000
|
(13)
|
42.8%
|
||
11622
El Camino Real, Suite 100
|
|||||||
San
Diego, CA 92130
|
|||||||
Great
Point Partners, LLC
|
-
|
-
|
1,704,747
|
(14)
|
5.2%
|
||
2
Pickwick Plaza, Suite 450
|
|||||||
Greenwich,
CT 06830
|
|||||||
Xmark
Opportunity Partners, LLC and its affiliates
|
-
|
-
|
22,286,316
|
(15)
|
57.1%
|
||
90
Grove Street
|
|||||||
Ridgefield,
CT 06877
|
·
|
salary;
|
·
|
bonus;
|
·
|
stock-based
awards;
|
·
|
health,
dental, life and disability insurance and other traditional employee
benefits; and
|
·
|
severance
and change-in-control
arrangements.
|
·
|
achievement
of the operating budget for Aeolus as a
whole;
|
·
|
continued
innovation in development and commercialization of our
technology;
|
·
|
timely development of new product
candidates; and
|
·
|
implementation
of financing strategies and establishment of strategic development
alliances with third parties.
|
·
|
evaluating
employee performance;
|
·
|
establishing
business performance targets and objectives;
and
|
·
|
recommending
salary levels and stock-based
awards.
|
·
|
background
information regarding our company’s strategic objectives and progress
toward the attainment of those
objectives;
|
·
|
his
evaluation of the performance of the senior executive officers;
and
|
·
|
compensation
recommendations as to senior executive officers, other than
himself.
|
Summary
Compensation Table
|
|||||||||||||||||||||
Name
and Principal
|
Fiscal
|
Annual
Compensation
|
All
Other
Compensation
($)
|
Total ($)
|
|||||||||||||||||
Position(s)
|
Year
|
Salary
($)
|
Bonus
($)
|
Option
Awards ($) (1)
|
|||||||||||||||||
John
L. McManus
|
2008
|
$ | 250,200 | — | $ | 150,313 | — | $ | 400,513 | ||||||||||||
President
and
|
2007
|
250,200 | — | 207,044 | — | 457,244 | |||||||||||||||
Chief Executive
Officer
|
|||||||||||||||||||||
Brian
Day, Ph.D. (2)
|
2008
|
— | — | 31,899 | $ | 132,000 | 163,899 | ||||||||||||||
Chief
Scientific Officer
|
2007
|
— | — | 33,915 | 132,000 | 165,915 | |||||||||||||||
Michael
P. McManus (3)
|
2008
|
— | — | 77,110 | — | 77,110 | |||||||||||||||
Chief
Financial Officer,
|
2007
|
— | — | 81,734 | — | 81,734 | |||||||||||||||
Treasurer
and Secretary
|
(1)
|
The
amounts in the “Option Awards” column reflect the dollar amounts
recognized as compensation expense for financial statements reporting
purposes for stock options for he fiscal year ended September 30, 2008 in
accordance with SFAS 123R. The assumptions we used to calculate
these amounts are discussed in Note H to our consolidated financial
statements included in our Annual Report on Form 10-K for the year ended
September 30, 2008.
|
(2)
|
Dr.
Day is Professor of Medicine, Immunology & Pharmaceutical Sciences at
the National Jewish Medical and Research Center (“NJM”) and is not an
employee of the Company. For his services as Chief Scientific Officer
during fiscal 2007 and 2008, Dr. Day was paid a monthly consulting fee of
$11,000. Dr. Day also receives an option to purchase up to
50,000 shares of Common Stock on October 1st of each year that he provides
consulting services to the Company. Dr. Day was paid $132,000
in consulting fees in fiscal 2008 and fiscal 2007. In addition,
Dr. Day was granted an option to purchase up to 25,000 shares of Common
Stock on January 11, 2008. The Company has also entered into
several grant agreements with NJM, for which Dr. Day was the principal
investigator. The Company paid NJM $65,280 and $49,640 in
fiscal 2008 and 2007, respectively. The Company also has an exclusive
worldwide license from NJM to develop, make, have made, use and sell
products using certain technology developed by certain scientists at
NJM.
|
(3)
|
Mr.
Michael McManus is not an employee of the Company. For his services as
Chief Financial Officer, McManus & Company, Inc., a consulting firm in
which Mr. Michael McManus and Mr. John McManus are each 50% owners, is
paid a monthly consulting payment of $25,000 and Mr. McManus receives an
option to purchase up to 90,000 shares of Common Stock on July 10th of
each year that he provides consulting services to the Company. Under this
contract, McManus & Company, Inc. also provides the Company with its
corporate headquarters, facilities management and the outsourcing of the
administrative, accounting, finance and accounting
functions. McManus & Company, Inc. was paid $300,000 and
$335,000 in consulting fees pursuant to services rendered by Mr. Michael
McManus to the Company in fiscal 2008 and fiscal 2007,
respectively.
|
Grant
Date
|
Exercise
or
Base
Price
of
Option Awards
|
||||||||||||||||||||||||||||
Name
|
All
Other Option Awards: Number of Shares Underlying Options
(#)
|
Grant Date Fair Value of Option Awards ($) (1) | |||||||||||||||||||||||||||
John
L. McManus
|
7/14/2008
|
250,000
|
(2)
|
$
|
0.32
|
$
|
79,875
|
||||||||||||||||||||||
Brian
Day, Ph.D.
|
10/1/2007
|
50,000
|
(2)
|
$
|
0.45
|
$
|
22,465
|
||||||||||||||||||||||
1/11/2008
|
25,000
|
(2)
|
$
|
0.40
|
$
|
9,985
|
|||||||||||||||||||||||
Michael
P. McManus
|
1/11/2008
|
45,000
|
(2)
|
$
|
0.40
|
$
|
17,973
|
||||||||||||||||||||||
7/10/2008
|
90,000
|
(2)
|
$
|
0.36
|
$
|
32,355
|
(1)
|
The
amounts in the “Grant Date Fair Value of Option Awards” column reflect the
grant date fair value of each equity award calculated in accordance with
SFAS 123(R).
|
(2)
|
The
option grant to this officer vests on a monthly basis for twelve months
with a ten-year term, subject to earlier termination upon certain
events.
|
Number
of Securities Underlying Unexercised Options
Exercisable
|
Option
Awards
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
|
Option
Exercise Price
|
Option
Expiration Date
|
|||||||||||||||||||
Name
|
Number
of Securities Underlying Unexercised Options Unexercisable
|
|||||||||||||||||||||
John
L. McManus
|
10,000
|
—
|
—
|
$0.97
|
7/29/2015
|
|||||||||||||||||
10,000
|
—
|
—
|
$0.91
|
8/31/2015
|
||||||||||||||||||
10,000
|
—
|
—
|
$1.12
|
9/30/2015
|
||||||||||||||||||
10,000
|
—
|
—
|
$1.15
|
10/31/2015
|
||||||||||||||||||
10,000
|
—
|
—
|
$1.03
|
11/30/2015
|
||||||||||||||||||
10,000
|
—
|
—
|
$0.95
|
12/30/2015
|
||||||||||||||||||
10,000
|
—
|
—
|
$0.89
|
1/31/2016
|
||||||||||||||||||
10,000
|
—
|
—
|
$0.90
|
2/28/2016
|
||||||||||||||||||
10,000
|
—
|
—
|
$0.80
|
3/31/2016
|
||||||||||||||||||
10,000
|
—
|
—
|
$0.75
|
4/28/2016
|
||||||||||||||||||
10,000
|
—
|
—
|
$0.60
|
5/31/2016
|
||||||||||||||||||
10,000
|
—
|
—
|
$0.81
|
6/30/2016
|
||||||||||||||||||
250,000
|
—
|
—
|
$0.75
|
7/14/2016
|
||||||||||||||||||
250,000
|
—
|
—
|
$0.90
|
7/13/2017
|
||||||||||||||||||
41,667
|
208,333
|
(1)
|
—
|
$0.32
|
7/14/2018
|
|||||||||||||||||
Number
of Securities Underlying Unexercised Options
Exercisable
|
Number
of Securities Underlying Unexercised Options
Unexercisable
|
Option
Awards
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
|
Option
Exercise Price
|
Option
Expiration Date
|
Brian
Day, Ph.D.
|
1,200
|
—
|
—
|
$51.25
|
4/7/2010
|
|||||||||||||||||
2,000
|
—
|
—
|
$0.90
|
2/28/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.70
|
3/31/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.55
|
4/29/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.71
|
5/31/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.73
|
6/30/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.97
|
7/29/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.91
|
8/31/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$1.12
|
9/30/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$1.15
|
10/31/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$1.03
|
11/30/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.95
|
12/31/2015
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.89
|
1/31/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.90
|
2/28/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.80
|
3/31/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.75
|
4/28/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.60
|
5/31/2016
|
||||||||||||||||||
25,000
|
—
|
—
|
$0.85
|
6/5/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.81
|
6/30/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.69
|
7/31/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.80
|
8/31/2016
|
||||||||||||||||||
2,000
|
—
|
—
|
$0.80
|
9/29/2016
|
||||||||||||||||||
50,000
|
—
|
—
|
$0.68
|
10/2/2016
|
||||||||||||||||||
45,833
|
4,167
|
(2)
|
—
|
$0.45
|
10/1/2017
|
|||||||||||||||||
16,667
|
8,333
|
(3)
|
—
|
$0.40
|
1/11/2018
|
|||||||||||||||||
Michael
P. McManus
|
1,250
|
—
|
—
|
$0.73
|
6/30/2015
|
|||||||||||||||||
1,250
|
—
|
—
|
$0.97
|
7/29/2015
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.91
|
8/31/2015
|
||||||||||||||||||
1,250
|
—
|
—
|
$1.12
|
9/30/2015
|
||||||||||||||||||
1,250
|
—
|
—
|
$1.15
|
10/31/2015
|
||||||||||||||||||
1,250
|
—
|
—
|
$1.03
|
11/30/2015
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.95
|
12/30/2015
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.89
|
1/31/2016
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.90
|
2/28/2016
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.80
|
3/31/2016
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.75
|
4/28/2016
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.60
|
5/31/2016
|
||||||||||||||||||
1,250
|
—
|
—
|
$0.81
|
6/30/2016
|
||||||||||||||||||
90,000
|
—
|
—
|
$0.80
|
7/10/2016
|
||||||||||||||||||
90,000
|
—
|
—
|
$1.01
|
7/10/2017
|
||||||||||||||||||
30,000
|
15,000
|
(3)
|
—
|
$0.40
|
1/11/2018
|
|||||||||||||||||
15,000
|
75,000
|
(4)
|
—
|
$0.36
|
7/10/2018
|
(1)
|
This
option vests as to these shares in approximately equal monthly
installments through July 13,
2009.
|
(4)
|
This
option vests as to these shares in approximately equal monthly
installments through July 10, 2009.
|
Termination without Cause or
for Good Reason
|
Voluntary
Resignation
|
|||||||||||||||||||
Value
of Options
|
Value
of Stock
|
|||||||||||||||||||
Cash
|
Value
of
|
with
Accelerated
|
with
Accelerated
|
Cash
|
||||||||||||||||
Name
|
Payments (1)
|
Benefits (2)
|
Vesting (3)
|
Vesting (4)
|
Payments
|
|||||||||||||||
John
L. McManus
|
$187,650
|
$16,737
|
$27,083
|
—
|
—
|
|||||||||||||||
Brian
Day, Ph.D.
|
11,000
|
—
|
417
|
—
|
—
|
|||||||||||||||
Michael
P. McManus
|
225,000
|
—
|
7,500
|
—
|
—
|
|||||||||||||||
Immediately upon a Change of
Control
|
Termination in Connection with
a Change of Control
|
|||||||||||||||||||||||
Value
of Options
|
Value
of Options
|
Value
of Stock
|
||||||||||||||||||||||
Cash
|
with
Accelerated
|
Cash
|
Value
of
|
with
Accelerated
|
with
Accelerated
|
|||||||||||||||||||
Name
|
Payments (5)
|
Vesting (3)
|
Payments (1)
|
Benefits (2)
|
Vesting (3)
|
Vesting(4)
|
||||||||||||||||||
John
L. McManus
|
$100,000
|
$
|
$27,083
|
$
|
187,650
|
$
|
16,737
|
$
|
27,083
|
—
|
||||||||||||||
Brian
Day, Ph.D. (6)
|
30,000
|
417
|
11,000
|
—
|
417
|
—
|
||||||||||||||||||
Michael
P. McManus
|
50,000
|
7,500
|
225,000
|
—
|
7,500
|
—
|
(1)
|
The
amounts in this column reflect a lump sum payment equal to the remaining
term of the executive officer’s employment or consulting agreement in
effect on September 30, 2008 assuming notice of termination was given on
September 30, 2008.
|
(2)
|
The
amounts in this column reflect the estimated value of health, dental, life
and disability insurance to be provided to the Named Executive Officer
subsequent to a termination.
|
(3)
|
The
amounts in this column are calculated based on the difference between
$0.45, the closing market price per share of our common stock on September
30, 2008, and the exercise price per share of the options subject to
accelerated vesting.
|
(4)
|
The
amounts in this column are calculated by multiplying the number of shares
subject to accelerated vesting by $0.45, the closing market price per
share of our common stock on September 30,
2008.
|
(5)
|
The
amounts in this column reflect the lump sum payment payable upon a change
of control pursuant to the executive officer’s employment or consulting
agreement in effect on September 30, 2008 assuming a change of control
occurred on September 30,
2008.
|
(6)
|
Dr.
Day would also be granted a stock option to purchase 25,000 shares of the
Company’s Common Stock with an exercise price equal to the closing stock
price on the date of grant upon the occurrence of a change of
control.
|
Fees
Earned or
|
All
Other
|
|||||||||||||||||||||||||||
Name
|
Paid in Cash
|
Option Awards (1)
|
Compensation
|
Total
|
||||||||||||||||||||||||
David
C. Cavalier
|
$18,750
|
$9,057
|
—
|
$27,807
|
||||||||||||||||||||||||
John
M. Farah, Jr., Ph.D.
|
11,250
|
9,057
|
—
|
20,307
|
||||||||||||||||||||||||
Joseph
J. Krivulka
|
11,250
|
9,057
|
—
|
20,307
|
||||||||||||||||||||||||
Amit
Kumar, Ph.D.
|
18,750
|
9,057
|
—
|
27,807
|
||||||||||||||||||||||||
Michael
E. Lewis, Ph.D.
|
11,250
|
9,057
|
—
|
20,307
|
||||||||||||||||||||||||
Chris
A. Rallis
|
18,750
|
9,057
|
—
|
27,807
|
||||||||||||||||||||||||
Peter
D. Suzdak, Ph.D.
|
11,250
|
9,057
|
—
|
20,307
|
(1)
|
The
amounts in the “Option Awards” column reflect the dollar amounts
recognized as compensation expense for financial statement reporting
purposes for stock options for the fiscal year ended September 30, 2008 in
accordance with SFAS 123(R). The assumptions we used to calculate
these amounts are discussed in Note H to our consolidated financial
statements included in our Annual Report on Form 10-K for the year
ended September 30, 2008.
|
|
·
|
Each
non-executive Board member received annual cash compensation of $15,000,
paid in equal quarterly payments. Cash compensation for new and
terminating Board members was prorated for the period of time that they
were a Board member during the respective
quarter.
|
|
·
|
Audit
Committee members received an additional $10,000 of annual cash
compensation, paid in equal quarterly payments. Cash compensation for new
and terminating Audit Committee members was prorated for the period of
time that they were members of the Audit Committee during the respective
quarter.
|
|
·
|
Each
non-executive Board member received an annual nonqualified stock option
for 30,000 shares in September of each year during service. The option
exercise prices equaled to the closing price of the Common Stock on the
grant date. The options had 10-year terms and vest, as long as the
director remains on the Board, on a monthly basis over a 12-month period
beginning on the date of grant. Unvested options expire upon resignation
or termination from the Board.
|
|
·
|
Each
non-executive Board member shall be eligible to receive nonqualified stock
options for up to an aggregate of 45,000 shares per year based
upon the number of meetings attended by the non-executive Board member
during the year. The option exercise prices shall be equal to
the closing price of the Common Stock on the grant date. The options shall
have 10-year terms and vest, as long as the director remains on the Board,
on a monthly basis over a 12-month period beginning on the date of grant.
Unvested options expire upon resignation or termination from the
Board.
|
|
·
|
In
addition, each Audit Committee member shall be eligible to receive a
nonqualified stock option for up to an aggregate of 15,000 shares per year
based the number of Audit Committee meetings attended by the Audit
Committee member during the year. The option exercise prices
shall be equal to the closing price of the Common Stock on the grant date.
The options shall have 10-year terms and vest, as long as the director
remains on the Board, on a monthly basis over a 12-month period beginning
on the date of grant. Unvested options expire upon resignation or
termination from the Board.
|
Plan
category
|
(a)Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
(b)Weighted-average
exercise price of outstanding options, warrants and rights
|
(c)Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|||
Equity
compensation plans approved by our stockholders:
|
|
|
|
|||
2004
Stock Option Plan
|
2,258,441
|
$0.70
|
2,574,895
|
|||
1994
Stock Option Plan
|
1,976,840
|
$4.57
|
0
|
|||
Equity
compensation plans and securities not approved by our
stockholders:
|
||||||
Warrant
to Purchase Common Stock Issued to Brookstreet Securities
Corporation
|
250,000
|
$1.50
|
Not
applicable
|
|||
Warrant
to Purchase Common Stock Issued to TBCC Funding Trust II
(1)
|
1,759
|
$19.90
|
Not
applicable
|
|||
Total
– Common Stock
|
4,487,040
|
2,574,895
|
||||
Convertible
Promissory Note convertible into shares of Series B Preferred Stock Issued
to Elan Pharma International Limited (as of September 30,
2008)(2)(3)
|
59,316
|
$9.00
|
2,151
|
|||
Total
– Series B Preferred Stock
|
59,316
|
2,151
|
|
·
|
To attract and retain key
executives critical to the long-term success of
Aeolus;
|
|
·
|
To
support a performance-oriented environment that rewards performance with
respect to Aeolus’ short-term and long-term financial
goals;
|
|
·
|
To encourage maximum performance
through the use of appropriate incentive programs;
and
|
|
·
|
To align the interests of
executives with those of Aeolus’ stockholders by providing a significant
portion of compensation in Aeolus’ common
stock.
|
Submitted
by:
|
The
Compensation Committee
|
|
David
C. Cavalier, Chairman
|
||
Joseph
J. Krivulka
|
||
Peter
D. Suzdak, Ph.D.
|
Total
|
||||
Fiscal
Year 2008
|
||||
Audit
Fees (1)
|
$
|
68,650
|
||
Audit-Related
Fees (2)
|
3,300
|
|||
Tax
Fees
|
—
|
|||
All
Other Fees
|
—
|
|||
Total
Fiscal Year 2008
|
$
|
71,950
|
||
Fiscal
Year 2007
|
||||
Audit
Fees (1)
|
$
|
74,160
|
||
Audit-Related
Fees (2)
|
3,540
|
|||
Tax
Fees
|
—
|
|||
All
Other Fees
|
—
|
|||
Total
Fiscal Year 2007
|
$
|
77,700
|
Submitted
by:
|
The
Audit Committee
|
|
David
C. Cavalier, Chairman
|
||
Amit
Kumar, Ph.D.
|
||
Chris
A. Rallis
|
1.
|
The
primary function of the Audit Committee (“Committee”) of Aeolus
Pharmaceuticals, Inc. (the “Company”) is to assist the Board of Directors
(“Board”) in fulfilling its oversight responsibilities related to
corporate accounting, financial reporting practices, quality and integrity
of financial reports as well as legal compliance and business ethics
matters. It shall be the policy of the Committee to maintain
free and open communication between the Board, the independent auditors
and the management of the Company.
|
2.
|
Although
the Committee has the responsibilities and powers set forth in this
charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Company’s financial statements are complete and
accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the
independent auditors. Nor is it the duty of the Committee to
conduct investigations, to resolve disagreements, if any, between
management and the independent auditors or to assure compliance with laws
and regulations and the Company’s
policies.
|
II.
|
ORGANIZATION
|
1.
|
Members - The Committee
shall be composed of directors who are independent of the management of
the Company and are free of any relationship that, in the opinion of the
Board, would interfere with their exercise of independent judgment as a
Committee member. Committee members shall be appointed by the
Board, and (after June 13, 2001) the Committee shall be composed of not
less than three independent Directors who are financially
literate. At least one member of the Committee shall have
accounting or related financial management
expertise.
|
2.
|
Meetings - The Committee
should meet on a regular basis and special meetings should be called as
circumstances require. The Committee shall meet privately from
time to time with representatives of the Company’s independent public
accountants and management. Written minutes should be kept for
all meetings and the Committee will report to the Board after each
Committee meeting.
|
3.
|
Charter - The Board and
the Committee shall review the adequacy of the Audit Committee Charter on
an annual basis.
|
III.
|
FUNCTIONS
|
1.
|
Independent Accountants
- Recommend to the Board annually, the firm to be employed by the
Company as its independent accountants. Instruct the
independent accountants that they are ultimately responsible to the Board
and the Committee. Receive from the independent accountants a
formal written statement delineating all relationships between the
independent accountants and the Company, to ensure objectivity and
independence.
|
2.
|
Audit Plans & Results
- Review the plans, scope, fees and results for the annual audit
with the independent auditors. Meet with management and the
independent auditors together and separately to discuss the financial
statements and the results of the audit. Inquire of management
and the independent auditor if any significant financial reporting issues
arose during the current audit and, if so, how they were
resolved. Evaluate and recommend to the Board whether or not
the annual audited financial statements should be filed with the SEC on
Form 10-K. Discuss any significant issues, if any, raised by
the independent auditors in their letter of recommendations to management
regarding internal control weaknesses and process
improvements. Also review the extent of any services and fees
outside the audit area performed for the Company by its independent
accountants.
|
3.
|
Accounting Principles and
Disclosures - Review significant developments in accounting rules
and recommended changes in the Company’s methods of accounting or
financial statements. The Committee also shall review with the
independent accountants the quality and acceptability of the application
of the Company’s accounting principles to the Company’s financial
reporting, including any significant proposed changes in accounting
principles and financial
statements.
|
4.
|
Internal Accounting
Controls - Consult with the independent accountants regarding the
adequacy of internal accounting controls. Inquire as to the
adequacy of the Company’s accounting, financial and auditing personnel
resources. As appropriate, consultation with the independent
accountants regarding internal controls should be conducted out of
management’s presence.
|
5.
|
Internal Control Systems
- Review with management and the Company’s internal control systems
intended to ensure the reliability of financial reporting and compliance
with applicable codes of conduct, laws and regulations. Special
presentations may be requested of Company personnel responsible for such
areas as legal, human resources, information technology, environmental,
risk management, tax compliance and others as considered
appropriate.
|
6.
|
Interim Financial
Statements - Review how management develops and summarizes
quarterly financial information. Require the independent
auditors review the quarterly financial information to be included in the
Company’s Form 10-Q.
|
1.
The Election of Seven Directors:
|
2.
To amend the Company’s Amended and Restated Certificate of Incorporation
to increase the authorized number of shares of common stock of Aeolus from
150,000,000 shares to 200,000,000 shares; and
3. To
ratify the selection of Haskell & White LLP as the Company’s
independent registered public accounting firm for fiscal
2009.
4.
To act upon such other matters as may properly come before the meeting, or
any adjournment or postponement thereof.
|
FOR AGAINST ABSTAIN
o o o
FOR AGAINST ABSTAIN
o o o
FOR AGAINST ABSTAIN
o o o
|
||
o FOR ALL
NOMINEES
o WITHHOLD
AUTHORITY
FOR
ALL NOMINEES
oFOR ALL
EXCEPT
(See
instructions below)
|
NOMINEES:
01)
David C. Cavalier
02)
John M. Farah, Jr.
03)
Joseph J. Krivulka
04)
Amit Kumar, Ph.D.
05) Michael E. Lewis,
Ph.D.
06)
Chris A. Rallis
07)
Peter D. Suzdak, Ph.D.
|
|||
INSTRUCTION: To withhold authority
to vote for any individual nominee(s), mark
“FOR
ALL EXCEPT” and write the number(s) of the nominee(s) for which
you
wish to withhold on the line below
,)
|
This
proxy will be voted as directed above. In the absence of any direction,
this proxy will be voted “FOR” the election of the nominees for director
in proposal 1 and “FOR” the approval of proposals 2 and 3, with discretion
to vote upon such other matters as may be brought before the meeting. Any
proxy heretofore given by the undersigned for the meeting is hereby
revoked and declared null and void and without any effect
whatsoever.
Please
mark, sign, date and return this proxy card promptly using the enclosed
envelope whether or not you plan to be present at the meeting. If you
attend the meeting, you can vote either in person or by
proxy.
|
|||
____________________________________
|
||||
To
change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
|
o
|