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In general, other factors that could affect the demand for and sales and profitability of our future drugs include, but are not limited to: • the timing of regulatory approval, if any, of competitive drugs; • our or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a drug, and the pricing decisions of our competitors; • government and third-party payer reimbursement and coverage decisions that affect the utilization of our future drugs and competing drugs; • negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our future drugs to decrease or a future drug to be recalled; • the degree of patent protection afforded our future drugs by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; • the outcome of litigation involving patents of other companies concerning our future drugs or processes related to production and formulation of those drugs or uses of those drugs; • the increasing use and development of alternate therapies; • the rate of market penetration by competing drugs; and • the termination of, or change in, existing arrangements with our partners. |
We expect that we will be subject to additional risks related to international operations and entering into international business relationships, including: • different regulatory requirements for drug approvals; • reduced protection for intellectual property rights, including trade secret and patent rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • workforce uncertainty in countries where employment regulations are different than, and labor unrest is more common than, in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; • business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, hurricanes, floods and fires; and • difficulty in importing and exporting clinical trial materials and study samples. |
As a result, governmental actions may adversely affect our business, operations or financial condition, including: • new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care availability, method of delivery and payment for health care products and services; • changes in the FDA and foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market opportunity; • changes in FDA and foreign regulations that may require additional safety monitoring, labeling changes, restrictions on product distribution or use, or other measures after the introduction of our products to market, which could increase our costs of doing business, adversely affect the future permitted uses of approved products, or otherwise adversely affect the market for our products; • new laws, regulations and judicial decisions affecting pricing or marketing practices; and • changes in the tax laws relating to our operations. |
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: • pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and • provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. |
Our rindopepimut Phase 3 trial, glembatumumab vedotin accelerated approval study and clinical trials for other products in development may be delayed or terminated as a result of many factors, including the following: •difficulty in enrolling patients in our clinical trials; •patients failing to complete clinical trials due to dissatisfaction with the treatment, side effects or other reasons; •failure by regulators to authorize us to commence a clinical trial; •suspension or termination by regulators of clinical research for many reasons, including concerns about patient safety or failure of our contract manufacturers to comply with cGMP requirements; •delays or failure to obtain clinical supply for our products necessary to conduct clinical trials from contract manufacturers, including commercial grade clinical supply for our Phase 3 clinical trials; •treatment candidates demonstrating a lack of efficacy during clinical trials; •inability to continue to fund clinical trials or to find a partner to fund the clinical trials; •competition with ongoing clinical trials and scheduling conflicts with participating clinicians; and •delays in completing data collection and analysis for clinical trials. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: •the timing of regulatory approval, if any, of competitive products; •our or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; •government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; •negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; •the degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; •the outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; •the increasing use and development of alternate therapies; •the rate of market penetration by competing products; and •the termination of, or change in, existing arrangements with our partners. |
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: •pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; •provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and •provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. |
Our rindopepimut Phase 3 trial, CDX-011 late-stage studies and planned clinical trials for other products in development may be delayed or terminated as a result of many factors, including the following: •difficulty in enrolling patients in our clinical trials; •patients failing to complete clinical trials due to dissatisfaction with the treatment, side effects or other reasons; •failure by regulators to authorize us to commence a clinical trial; •suspension or termination by regulators of clinical research for many reasons, including concerns about patient safety or failure of our contract manufacturers to comply with cGMP requirements; •delays or failure of the FDA to remove the clinical hold on our CDX-011 studies; •treatment candidates demonstrating a lack of efficacy during clinical trials; •inability to continue to fund clinical trials or to find a partner to fund the clinical trials; •competition with ongoing clinical trials and scheduling conflicts with participating clinicians; and •delays in completing data collection and analysis for clinical trials. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: •the timing of regulatory approval, if any, of competitive products; •our or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; •government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; •negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; •the degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; •the outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; •the increasing use and development of alternate therapies; •the rate of market penetration by competing products; and •the termination of, or change in, existing arrangements with our partners. |
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: •pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; •provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and •provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. |
Our rindopepimut Phase 3 trial, CDX-011 Phase 2b studies and planned clinical trials for other products in development may be delayed or terminated as a result of many factors, including the following: •difficulty in enrolling patients in our clinical trials; •patients failing to complete clinical trials due to dissatisfaction with the treatment, side effects or other reasons •failure by regulators to authorize us to commence a clinical trial; •suspension or termination by regulators of clinical research for many reasons, including concerns about patient safety or failure of our contract manufacturers to comply with cGMP requirements; •delays or failure of the FDA to remove the partial clinical hold on our CDX-011 studies; •treatment candidates demonstrating a lack of efficacy during clinical trials; •inability to continue to fund clinical trials or to find a partner to fund the clinical trials; •competition with ongoing clinical trials and scheduling conflicts with participating clinicians; and •delays in completing data collection and analysis for clinical trials. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: •the timing of regulatory approval, if any, of competitive products; •our, Glaxo's, or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; •government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; •negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; •the degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; •the outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; •the increasing use and development of alternate therapies; •the rate of market penetration by competing products; and •the termination of, or change in, existing arrangements with our partners. |
Restricted Stock A summary of restricted stock activity under the 2008 Plan for the year ended December 31, 2011 is as follows: CELLDEX THERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (12) STOCK-BASED COMPENSATION (Continued) Valuation and Expenses Information Stock-based compensation expense for the years ended December 31, 2011, 2010 and 2009 was recorded as follows: The fair values of employee and non-employee director stock options granted during the years ended December 31, 2011, 2010 and 2009 were valued using the Black-Scholes option-pricing model with the following assumptions: (13) SIGNIFICANT REVENUE ARRANGEMENTS A summary of the Company's significant revenue contracts and arrangements follows: GlaxoSmithKline plc (Glaxo) and Paul Royalty Fund II, L.P. (PRF) In 1997, the Company entered into an agreement with Glaxo to collaborate on the development and commercialization of the Company's oral rotavirus strain and Glaxo assumed responsibility for all subsequent clinical trials and all other development activities. |
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: •pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; •provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and •provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: •The timing of regulatory approval, if any, of competitive products; •Our, Glaxo's, or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; •Government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; •Negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; •The degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; •The outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; •The increasing use and development of alternate therapies; •The rate of market penetration by competing products; and •The termination of, or change in, existing arrangements with our partners. |
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: •pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; •provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and •provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: •The timing of regulatory approval, if any, of competitive products; •Our, Glaxo's, Pfizer's or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; •Government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; •Negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; •The degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; •The outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; •The increasing use and development of alternate therapies; •The rate of market penetration by competing products; and •The termination of, or change in, existing arrangements with our partners. |
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: •pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; •provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and •provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: •The timing of regulatory approval, if any, of competitive products; •Our, Glaxo's, Pfizer's or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; •Government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; •Negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; •The degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; •The outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; •The increasing use and development of alternate therapies; •The rate of market penetration by competing products; and •The termination of, or change in, existing arrangements with our partners. |
These factors include, but are not limited to: •our ability to raise sufficient capital on terms acceptable to us, or at all; •our ability to adapt our APC Targeting Technology™ to develop new, safe and effective vaccines against oncology and infectious disease indications; •our ability to adapt our vectoring systems to develop new, safe and effective orally administered vaccines against disease causing agents; •our ability to successfully complete product research and further development, including animal, preclinical and clinical studies, and commercialization of CDX-110, CDX-1307, Ty800, CDX-1135 (formerly TP10), and other products and the growth of the markets for those product candidates; •the cost, timing, scope and results of ongoing safety and efficacy trials of CDX-110, CDX-1307, Ty800, CDX-1135 (formerly TP10), and other preclinical and clinical testing; •the ability to negotiate strategic partnerships or other disposition transactions for our non-core programs, including CETi; •our ability to manage multiple clinical trials for a variety of product candidates at different stages of development; •the strategies and business plans of our partners, such as Pfizer's plans for CDX-110, GlaxoSmithKline's plans with respect to Rotarix® and Vaccine Technologies' plans concerning the CholeraGarde® (Peru-15) and ETEC E. coli vaccines, which are not within our control, and our ability to maintain strong, mutually beneficial relationships with those partners; •our ability to develop technological capabilities and expand our focus to broader markets for vaccines; •the availability, cost, delivery and quality of clinical and commercial grade materials produced our own manufacturing facility or supplied by contract manufacturers and partners; •the timing, cost and uncertainty of obtaining regulatory approvals for product candidates; •our ability to develop and commercialize products before competitors that are superior to the alternatives developed by such competitors; •the validity of our patents and our ability to avoid intellectual property litigation, which can be costly and divert management time and attention; and •the factors listed under "Risk Factors" in this annual report on Form 10-K. All forward-looking statements are expressly qualified in their entirety by this cautionary notice. |
(D) Merger with Celldex At the special meeting of the Company's shareholders held on March 6, 2008 in connection with the Merger (as described in Note 1), stockholders approved four proposals: (i) the issuance of shares of the Company's common stock pursuant to the Merger Agreement in the amount necessary to result in the former Celldex Research stockholders owning 58% of the Company's common stock on a fully diluted basis, (ii) an amendment to the Company's Third Restated Certificate of Incorporation to increase the number of authorized shares to 300,000,000, (iii) an amendment to the Company's Third Restated Certificate of Incorporation to effect a reverse stock split in a ratio ranging from one-for-twelve to one-for-twenty of all the issued and outstanding shares of the Company's common CELLDEX THERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) YEARS ENDED DECEMBER 31, 2008, 2007 and 2006 (9) STOCKHOLDERS' EQUITY (Continued) stock, the final ratio to be determined within the discretion of the Company's board of directors and (iv) adoption of the 2008 Stock Option and Incentive Plan. |
All securityholder recommendations for director candidates must be submitted to Celldex not less than 120 calendar days prior to the date on which Celldex's proxy statement is released to stockholders in connection with the Company's annual meeting, and must include the following information: •the name and address of record of the securityholder; •a representation that the securityholder is a record holder of Celldex's securities, or if the securityholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Securities Exchange Act of 1934; •the name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five (5) full fiscal years of the proposed director candidate; •a description of the qualifications and background of the proposed director candidate which addresses the minimum qualifications and other criteria for Board membership approved by the Board from time to time and set forth in the Nominating and Corporate Governance Committee's written charter; •A description of any arrangements or understandings between the securityholder and the proposed director candidate; and •The consent of the proposed director candidate to be named in the proxy statement relating to Celldex's annual meeting of stockholders and to serve as a director if elected at such annual meeting. |
Our compensation committee has designed our overall executive compensation program to achieve the following objectives: •attract and retain talented and experienced executives •motivate and reward executives whose knowledge, skills and performance are critical to our success •provide a competitive compensation package that aligns the interests of our executive officers and stockholders by including a significant variable component which is weighted heavily towards performance-based rewards, based upon achievement of pre-determined goals •ensure fairness among the executive management team by recognizing the contributions each executive makes to our success •foster a shared commitment among executives by aligning Celldex's and their individual goals, and •compensate our executives to manage our business to meet our near-term and long-term objectives We use a mix of short-term compensation (base salaries and cash incentive bonuses) and long-term compensation (equity incentive compensation) to provide a total compensation structure that is designed to achieve these objectives. |
When granting stock options, the Compensation Committee considers a number of factors in determining the amount of equity incentive awards, if any, to grant to our executives, including: •the existing levels of stock ownership among the executive officers relative to each other and to our employees as a whole •previous grants of stock options to such executive officers •vesting schedules of previously granted options •the performance of the executives and their contributions to our overall performance •an outside survey of stock option grants and restricted common stock awards in the biotechnology industry •an internally prepared survey of similarly situated biotechnology companies' proxy statements •personal knowledge of the Compensation Committee members regarding executive stock options and restricted common stock awards at comparable companies •the impact of stock option awards on our results of operations and •the amount and percentage of our total equity on a diluted basis held by our executives Equity compensation awards to our Named Executive Officers primarily consist of stock option awards. |
The Employment Agreement provides, among other things, for: (i) an annual base salary of $250,000 (increased to $458,000 on September 25, 2008); (ii) an annual cash bonus in an amount established by the Company's Board of Directors; (iii) a weekly bonus of $3,992.31 during the period in which the Executive serves as interim Chief Executive Officer and President (which ended on September 25, 2008); (iv) a lump sum severance payment equal to 200% of the Executive's then-base salary (not including bonus) in the event that his employment is terminated without cause or he resigns "for good reason" (as defined in the Employment Agreement); and (v) accelerated vesting of any unvested Equity Awards (as defined in the Employment Agreement) and a lump sum cash payment equal to twenty four (24) times Executive's highest monthly base compensation (not including bonus) during the twenty-four month period prior to the date of termination plus the average of the annual discretionary bonuses (but not the bonuses received for serving as interim Chief Executive Officer) received by the Executive during the two full fiscal years prior to the date of termination in the event of termination without cause or resignation "for good reason" by the Executive within one year immediately following a Change in Control (as defined in the Employment Agreement). |
The employment agreements between the Company and Messrs. Catlin, Davis and Keler provide, among other things, for: (i) annual base salary ($288,250 in the case of Mr. Catlin, $362,400 in the case of Dr. Davis, and $342,000 in the case of Dr. Keler); (ii) an annual discretionary bonus in an amount established by the Company's Board of Directors or the Compensation Committee thereof; (iii) a lump sum severance payment equal to 200% of the executive's then-base salary n the event that his employment is terminated without cause or he resigns "for good reason" (as defined in the employment agreement); and (iv) accelerated vesting of any unvested equity awards (as defined in the employment agreement) and a lump sum cash payment equal to twelve (12) times the executive's highest monthly base compensation (not including bonus) during the twenty-four month period prior to the date of termination plus the average of the annual discretionary bonuses received during the two full fiscal years prior to the date of termination in the event of termination without cause or resignation "for good reason" by the executive within one year immediately following a change in control (as defined in the employment agreement). |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: •The timing of regulatory approval, if any, of competitive products; •Our, Megan's, Glaxo's or any other of our partners' pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; •Government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; •Negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; •The degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor's patents; •The outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; •The increasing use and development of alternate therapies; •The rate of market penetration by competing products; and •The termination of, or change in, existing arrangements with our partners. |
All securityholder recommendations for director candidates must be submitted to AVANT not less than 120 calendar days prior to the date on which AVANT's proxy statement was released to stockholders in connection with the previous year's annual meeting, and must include the following information: •the name and address of record of the securityholder; •a representation that the securityholder is a record holder of AVANT's securities, or if the securityholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Securities Exchange Act of 1934; •the name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five (5) full fiscal years of the proposed director candidate; •a description of the qualifications and background of the proposed director candidate which addresses the minimum qualifications and other criteria for Board membership approved by the Board from time to time and set forth in the Nominating and Corporate Governance Committee's written charter; •A description of any arrangements or understandings between the securityholder and the proposed director candidate; and •The consent of the proposed director candidate to be named in the proxy statement relating to AVANT's annual meeting of stockholders and to serve as a director if elected at such annual meeting. |
Our compensation committee has designed our overall executive compensation program to achieve the following objectives: •attract and retain talented and experienced executives •motivate and reward executives whose knowledge, skills and performance are critical to our success •provide a competitive compensation package that aligns the interests of our executive officers and stockholders by including a significant variable component which is weighted heavily towards performance-based rewards, based upon achievement of pre-determined goals •ensure fairness among the executive management team by recognizing the contributions each executive makes to our success •foster a shared commitment among executives by aligning AVANT's and their individual goals, and •compensate our executives to manage our business to meet our near-term and long-term objectives We use a mix of short-term compensation (base salaries and cash incentive bonuses) and long-term compensation (equity incentive compensation) to provide a total compensation structure that is designed to achieve these objectives. |
When granting stock options, the Compensation Committee considers a number of factors in determining the amount of equity incentive awards, if any, to grant to our executives, including: •the existing levels of stock ownership among the executive officers relative to each other and to our employees as a whole •previous grants of stock options to such executive officers •vesting schedules of previously granted options •the performance of the executives and their contributions to our overall performance •an outside survey of stock option grants and restricted common stock awards in the biotechnology industry •an internally prepared survey of similarly situated biotechnology companies' proxy statements •personal knowledge of the Compensation Committee members regarding executive stock options and restricted common stock awards at comparable companies •the impact of stock option awards on our results of operations and •the amount and percentage of our total equity on a diluted basis held by our executives Equity compensation awards to our named executive officers primarily consists of stock option awards. |
333-59215), filed July 16, 1998 3.4 Third Certificate of Amendment of Third Restated Certificate of Incorporation of AVANT Incorporated by reference to Exhibit 3.1 of AVANT's Quarterly Report on Form 10-Q, filed May 10, 2002 3.5 Amended and Restated By-Laws of AVANT as of March 14, 2007 Filed herewith 3.6 Certificate of Elimination of Series C-1 Junior Participating Cumulative Preferred Stock Incorporated by reference to Exhibit 3.6 of AVANT's Annual Report on Form 10-K, filed March 16, 2005 3.7 Certificate of Designations, Preferences and Rights of a Series of Preferred Stock of AVANT Immunotherapeutics, Inc. classifying and designating the Series C-1 Junior Participating Cumulative Preferred Stock Incorporated by reference to Exhibit 3.1 of AVANT's Registration Statement on Form 8-A filed November 8, 2004 3.8 Fourth Certificate of Amendment of Third Restated Certificate of Incorporation of AVANT Incorporated by reference to Exhibit 3.1 of AVANT's Current Report on Form 8-K filed on March 11, 2008 3.9 Fifth Certificate of Amendment of Third Restated Certificate of Incorporation of AVANT Incorporated by reference to Exhibit 3.2 of AVANT's Current Report on Form 8-K filed on March 11, 2008 4.1 Shareholder Rights Agreement dated November 5, 2004 between AVANT and EquiServe Trust Company, N.A. |
Incorporated by reference to Exhibit 10.15 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 10.11 Agreement between Lonza Biologics plc and AVANT dated as of April 19, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.11 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.12 Stock Purchase Agreement dated December 1, 2000 by and between AVANT and Pfizer Inc Incorporated by reference to Exhibit 10.12 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.13 License and Royalty Agreement by and between Pfizer Inc, AVANT and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.13 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.14 Amendment to License and Royalty Agreement by and between Pfizer Inc, AVANT and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.14 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.15 Collaborative Research and Development Agreement by and between Pfizer Inc. and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.15 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.16 Exclusive License Agreement between AVANT Immunotherapeutics, Inc. and DynPort Vaccine Company, LLC dated as of October 10, 2001, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.17 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.17 First Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.18 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.18 First Amendment to Amended and Restated Employment Agreement between AVANT and Una S. Ryan, Ph.D. dated as of December 23, 2002 Incorporated by reference to Exhibit 10.19 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 10.19 License Agreement between Virus Research Institute, Inc. and SmithKline Beecham PLC dated as of December 1, 1997, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.20 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 10.20 Amendment Agreement, dated January 9, 2003, between AVANT and SmithKline Beecham PLC Incorporated by reference to Exhibit 10.21 of AVANT's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.21 License Agreement, dated as of January 31, 2003, by and between AVANT and Elan Drug Delivery Limited Incorporated by reference to Exhibit 10.22 of AVANT's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.22 License and Clinical Trials Agreement, effective as of February 27, 1995, between Virus Research Institute, Inc. and the James N. Gamble Institute of Medical Research Incorporated by reference to Exhibit 10.23 of AVANT's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.23 License Agreement, dated as of May 1, 1992, by and between the President and Fellows of Harvard College and Virus Research Institute, Inc. |
Incorporated by reference to Exhibit 10.28 of AVANT's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.27 Subcontractor Service Agreement by and between DynPort Vaccine Company LLC and AVANT, dated January 15, 2003 Incorporated by reference to Exhibit 10.1 of AVANT's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.28 Subcontract modification by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.2 of AVANT's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.29 Subcontract by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.3 of AVANT's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.30 Second Amendment to Amended and Restated Employment Agreement between AVANT and Una S. Ryan, Ph.D., dated as of September 18, 2003 Incorporated by reference to Exhibit 10.4 of AVANT's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.31 Third Amendment to Amended and Restated Employment Agreement between AVANT and Una S. Ryan, Ph.D., dated as of October 19, 2007 Incorporated by reference to Exhibit 10.2 to a Current Report on Form 8-K filed by AVANT on October 22, 2007 10.32 Restricted Stock Unit Agreement between AVANT and Una S. Ryan, dated September 18, 2003 Incorporated by reference to Exhibit 10.5 of AVANT's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.33 Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.34 of AVANT's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 10.34 Lease Agreement, by and between AVANT and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.1 of AVANT's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.35 Security Agreement, by and between AVANT and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.2 of AVANT's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.36 Secured Promissory Note: Equipment Loan, by and between AVANT and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.3 of AVANT's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.37 Non-Exclusive License Agreement, by and between AVANT and AdProTech Ltd., dated as of March 10, 2004, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.4 of AVANT's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.38 Design/Builder Agreement, dated August 20, 2004 by and between AVANT Immunotherapeutics, Inc. and SPEC Process Engineering & Construction, Inc. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: · The timing of regulatory approval, if any, of competitive products; · Our, Megan’s, Glaxo’s or any other of our partners’ pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; · Government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; · Negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; · The degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor’s patents; · The outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; · The increasing use and development of alternate therapies; · The rate of market penetration by competing products; and · The termination of, or change in, existing arrangements with our partners. |
Incorporated by reference to Exhibit 10.15 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 10.12 Agreement between Lonza Biologics plc and AVANT dated as of April 19, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.11 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.13 Stock Purchase Agreement dated December 1, 2000 by and between AVANT and Pfizer Inc Incorporated by reference to Exhibit 10.12 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.14 License and Royalty Agreement by and between Pfizer Inc, AVANT and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.13 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.15 Amendment to License and Royalty Agreement by and between Pfizer Inc, AVANT and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.14 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.16 Collaborative Research and Development Agreement by and between Pfizer Inc. and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.15 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.17 Exclusive License Agreement between AVANT Immunotherapeutics, Inc. and DynPort Vaccine Company, LLC dated as of October 10, 2001, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.17 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.18 First Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.18 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.19 First Amendment to Amended and Restated Employment Agreement between AVANT and Una S. Ryan, Ph.D. dated as of December 23, 2002 Incorporated by reference to Exhibit 10.19 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 10.20 License Agreement between Virus Research Institute, Inc. and SmithKline Beecham PLC dated as of December 1, 1997, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.20 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 10.21 Amendment Agreement, dated January 9, 2003, between AVANT and SmithKline Beecham PLC Incorporated by reference to Exhibit 10.21 of AVANT’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.22 License Agreement, dated as of January 31, 2003, by and between AVANT and Elan Drug Delivery Limited Incorporated by reference to Exhibit 10.22 of AVANT’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.23 License and Clinical Trials Agreement, effective as of February 27, 1995, between Virus Research Institute, Inc. and the James N. Gamble Institute of Medical Research Incorporated by reference to Exhibit 10.23 of AVANT’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.24 License Agreement, dated as of May 1, 1992, by and between the President and Fellows of Harvard College and Virus Research Institute, Inc. |
Incorporated by reference to Exhibit 10.28 of AVANT’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.29 Subcontractor Service Agreement by and between DynPort Vaccine Company LLC and AVANT, dated January 15, 2003 Incorporated by reference to Exhibit 10.1 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.30 Subcontract modification by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.2 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.31 Subcontract by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.3 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.32 Second Amendment to Amended and Restated Employment Agreement between AVANT and Una S. Ryan, Ph.D., dated as of September 18, 2003 Incorporated by reference to Exhibit 10.4 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.33 Restricted Stock Unit Agreement between AVANT and Una S. Ryan, dated September 18, 2003 Incorporated by reference to Exhibit 10.5 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.34 Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.34 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 10.35 Lease Agreement, by and between AVANT and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.1 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.36 Security Agreement, by and between AVANT and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.2 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.37 Secured Promissory Note: Equipment Loan, by and between AVANT and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.3 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.38 Non-Exclusive License Agreement, by and between AVANT and AdProTech Ltd., dated as of March 10, 2004, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.4 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.39 Design/Builder Agreement, dated August 20, 2004 by and between AVANT Immunotherapeutics, Inc. and SPEC Process Engineering & Construction, Inc. |
Incorporated by reference to Exhibit 10.1 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 10.40 First Amendment to Lease by and between AVANT and DIV Needham 53 LLC dated November 29,2005 Incorporated by reference to Exhibit 10.40 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 10.41 Second Amendment to Lease by and between AVANT and the Massachusetts Development Finance Agency dated as of November 4, 2005 Incorporated by reference to Exhibit 10.41 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 10.42 Amendment Agreement to Purchase Agreement between AVANT and PRF Vaccine Holdings LLC, dated as of March 14, 2006 Incorporated by reference to Exhibit 10.1 of AVANT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 18.0 Letter regarding Change in Accounting Principle Incorporated by reference to Exhibit 18.0 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 21.0 List of Subsidiaries Incorporated by reference to Exhibit 21.0 of AVANT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 23.1 Consent of Independent Registered Public Accounting Firm Filed herewith 31.1 Certification of President and Chief Executive Officer Filed herewith 31.2 Certification of Senior Vice President and Chief Financial Officer Filed herewith Section 1350 Certifications Furnished herewith SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
In general, other factors that could affect the demand for and sales and profitability of our products include, but are not limited to: · The timing of regulatory approval, if any, of competitive products; · Our, Megan’s, Glaxo’s or any other of our partners’ pricing decisions, as applicable, including a decision to increase or decrease the price of a product, and the pricing decisions of our competitors; · Government and third-party payer reimbursement and coverage decisions that affect the utilization of our products and competing products; · Negative safety or efficacy data from new clinical studies conducted either in the U.S. or internationally by any party could cause the sales of our products to decrease or a product to be recalled; · The degree of patent protection afforded our products by patents granted to or licensed by us and by the outcome of litigation involving our or any of our licensor’s patents; · The outcome of litigation involving patents of other companies concerning our products or processes related to production and formulation of those products or uses of those products; · The increasing use and development of alternate therapies; · The rate of market penetration by competing products; and · The termination of, or change in, existing arrangements with our partners. |
333-52796), filed December 27, 2000 10.3 AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit A to the Company’s Proxy Statement on Schedule 14A filed on April 1, 1999 10.4 Virus Research Institute, Inc. 1992 Equity Incentive Plan as amended and restated Incorporated by reference to Exhibit 10.4 of the Company’s Annual Report on Form 10-K filed March 28, 2000 10.5 Performance Plan of the Company Incorporated by reference to Exhibit 10.5 of the Company’s Annual Report on Form 10-K filed March 28, 2000 10.6 Form of Agreement relating to Change of Control Incorporated by reference to Exhibit 10.6 of the Company’s Annual Report on Form 10-K filed March 28, 2000 10.7 Amended and Restated Employment Agreement between the Company and Una S. Ryan, Ph.D. dated August 20, 1998 Incorporated by reference to Exhibit 10.8 of he Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 10.8 Commercial Lease Agreement of May 1, 1996 between the Company and Fourth Avenue Ventures Limited Partnership Incorporated by reference to Exhibit 10.11 of the Company’s quarterly report on Form 10-Q/A for the quarterly period ended June 30, 1996 (File No. |
Incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 10.12 Agreement between Lonza Biologics plc and the Company dated as of April 19, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.13 Stock Purchase Agreement dated December 1, 2000 by and between the Company and Pfizer Inc Incorporated by reference to Exhibit 10.12 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.14 License and Royalty Agreement by and between Pfizer Inc, the Company and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.15 Amendment to License and Royalty Agreement by and between Pfizer Inc., the Company and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.16 Collaborative Research and Development Agreement by and between Pfizer Inc. and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.17 Exclusive License Agreement between AVANT Immunotherapeutics, Inc. and DynPort Vaccine Company, LLC dated as of October 10, 2001, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.17 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.18 First Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.19 First Amendment to Amended and Restated Employment Agreement between the Company and Una S. Ryan, Ph.D. dated as of December 23, 2002 Incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 10.20 License Agreement between Virus Research Institute, Inc. and SmithKline Beecham PLC dated as of December 1, 1997, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 10.21 Amendment Agreement, dated January 9, 2003, between the Company and SmithKline Beecham PLC Incorporated by reference to Exhibit 10.21 of the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.22 License Agreement, dated as of January 31, 2003, by and between the Company and Elan Drug Delivery Limited Incorporated by reference to Exhibit 10.22 of the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.23 License and Clinical Trials Agreement, effective as of February 27, 1995, between Virus Research Institute, Inc. and the James N. Gamble Institute of Medical Research Incorporated by reference to Exhibit 10.23 of the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.24 License Agreement, dated as of May 1, 1992, by and between the President and Fellows of Harvard College and Virus Research Institute, Inc. |
Incorporated by reference to Exhibit 10.28 of the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.29 Subcontractor Service Agreement by and between DynPort Vaccine Company LLC and AVANT, dated January 15, 2003 Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.30 Subcontract modification by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.31 Subcontract by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.32 Second Amendment to Amended and Restated Employment Agreement between AVANT and Una S. Ryan, Ph.D., dated as of September 18, 2003 Incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.33 Restricted Stock Unit Agreement between AVANT and Una S. Ryan, dated September 18, 2003 Incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.34 Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.34 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 10.35 Lease Agreement, by and between the Company and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.36 Security Agreement, by and between the Company and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.37 Secured Promissory Note: Equipment Loan, by and between the Company and the Massachusetts Development Finance Agency, dated as of December 22, 2003, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.38 Non-Exclusive License Agreement, by and between the Company and AdProTech Ltd., dated as of March 10, 2004, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 10.39 Design/Builder Agreement, dated August 20, 2004 by and between AVANT Immunotherapeutics, Inc. and SPEC Process Engineering & Construction, Inc. |
Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 10.40 First Amendment to Lease by and between the Company and DIV Needham 53 LLC dated November 29,2005 Filed herewith 10.41 Second Amendment to Lease by and between the Company and the Massachusetts Development Finance Agency dated as of November 4, 2005 Filed herewith 18.0 Letter regarding Change in Accounting Principle Incorporated by reference to Exhibit 18.0 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 21.0 List of Subsidiaries Incorporated by reference to Exhibit 21.0 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 23.1 Consent of Independent Registered Public Accounting Firm Filed herewith 31.1 Certification of President and Chief Executive Officer Filed herewith 31.2 Certification of Senior Vice President and Chief Financial Officer Filed herewith Section 1350 Certifications Filed herewith (B) Reports on Form 8-K. We filed the following Current Reports on Form 8-K during the quarter ended December 31, 2005. |
Below is a table of our currently active programs: CURRENT PROGRAMS AND PARTNERSHIPS Technology Product Indication/Field Partner Status Immunotherapeutics TP10 Cardiac by-pass surgery - Phase IIb CETi Cholesterol management - Phase II Bacterial Vaccines Global Health CholeraGarde® Cholera IVI Phase IIb Ty800 Typhoid fever NIH Phase I/II Travelers' ETEC Enterotoxigenic E coli infection - Pre-clinical Shigella Dysentery - Pre-clinical Campylobacter Campylobacter infection - Pre-clinical BioDefense Injectable Anthrax Oral Anthrax & Plague Anthrax infection Anthrax & Plague infections DoD/DVC DoD/DVC and NIH Phase I Pre-clinical Food Safety and Animal Health Megan®Vac 1 Salmonella infection in chicken Lohmann Marketed Megan®Egg Salmonella infection in laying hens and eggs Lohmann Marketed Other Food Safety and Animal Health Vaccines Bacterial contamination of food sources and animal health Pfizer Pre-clinical Viral Vaccines Rotarix® Therapore® Rotavirus infection Viral infection- HIV GlaxoSmithKline US Army Marketed Phase I B. |
333-59215), filed July 16, 1998 3.6 Third Certificate of Amendment of Third Restated Certificate of Incorporation of the Company Incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q, filed May 10, 2002 4.1 Shareholder Rights Agreement dated November 10, 1994 between the Company and State Street Bank and Trust Company as Rights Agent Incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 10-K filed March 28, 2000 4.2 Amendment to Shareholder Rights Agreement between State Street Bank and Trust Company and AVANT Immunotherapeutics, Inc. dated as of December 17, 2001 Incorporated by reference to Exhibit 4.2 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.1 AVANT Immunotherapeutics, Inc. 1994 Employee Stock Purchase Plan Incorporated by reference to Exhibit 10.1 of the Company's Registration Statement on Form S-8 filed June 8, 1994 10.2 Megan Health, Inc. Stock Option Plan Incorporated by reference to Exhibit 4.6 of the Company's Registration Statement on Form S-8 (Reg. |
333-52796), filed December 27, 2000 10.3 AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit A to the Company's Proxy Statement on Schedule 14A filed on April 1, 1999 10.4 Virus Research Institute, Inc. 1992 Equity Incentive Plan as amended and restated Incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K filed March 28, 2000 10.5 Performance Plan of the Company Incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 10-K filed March 28, 2000 10.6 Form of Agreement relating to Change of Control Incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 10-K filed March 28, 2000 10.7 Amended and Restated Employment Agreement between the Company and Una S. Ryan, Ph.D. dated August 20, 1998 Incorporated by reference to Exhibit 10.8 of he Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 10.8 Commercial Lease Agreement of May 1, 1996 between the Company and Fourth Avenue Ventures Limited Partnership Incorporated by reference to Exhibit 10.11 of the Company's quarterly report on Form 10-Q/A for the quarterly period ended June 30, 1996 (File No. |
Incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 10.12 Agreement between Lonza Biologics plc and the Company dated as of April 19, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.11 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.13 Stock Purchase Agreement dated December 1, 2000 by and between the Company and Pfizer Inc Incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.14 License and Royalty Agreement by and between Pfizer Inc, the Company and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.15 Amendment to License and Royalty Agreement by and between Pfizer Inc., the Company and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.14 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.16 Collaborative Research and Development Agreement by and between Pfizer Inc. and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.17 Exclusive License Agreement between AVANT Immunotherapeutics, Inc. and DynPort Vaccine Company, LLC dated as of October 10, 2001, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.17 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.18 First Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.18 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.19 First Amendment to Amended and Restated Employment Agreement between the Company and Una S. Ryan, Ph.D. dated as of December 23, 2002 Incorporated by reference to Exhibit 10.19 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 10.20 License Agreement between Virus Research Institute, Inc. and SmithKline Beecham PLC dated as of December 1, 1997, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.20 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 10.21 Amendment Agreement, dated January 9, 2003, between the Company and SmithKline Beecham PLC Incorporated by reference to Exhibit 10.21 of the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.21 Amendment Agreement, dated January 9, 2003, between the Company and SmithKline Beecham PLC Incorporated by reference to Exhibit 10.21 of the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.22 License Agreement, dated as of January 31, 2003, by and between the Company and Elan Drug Delivery Limited Incorporated by reference to Exhibit 10.22 of the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.23 License and Clinical Trials Agreement, effective as of February 27, 1995, between Virus Research Institute, Inc. and the James N. Gamble Institute of Medical Research Incorporated by reference to Exhibit 10.23 of the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.24 License Agreement, dated as of May 1, 1992, by and between the President and Fellows of Harvard College and Virus Research Institute, Inc. |
Incorporated by reference to Exhibit 10.28 of the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 10.29 Subcontractor Service Agreement by and between DynPort Vaccine Company LLC and AVANT, dated January 15, 2003 Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.30 Subcontract modification by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.31 Subcontract by and between DynPort Vaccine Company LLC and AVANT, dated May 27, 2003 Incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.32 Second Amendment to Amended and Restated Employment Agreement between AVANT and Una S. Ryan, Ph.D., dated as of September 18, 2003 Incorporated by reference to Exhibit 10.4 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.33 Restricted Stock Unit Agreement between AVANT and Una S. Ryan, dated September 18, 2003 Incorporated by reference to Exhibit 10.5 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 10.34 Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Filed herewith 18.0 Letter regarding Change in Accounting Principle Filed herewith 21.0 List of Subsidiaries Incorporated by reference to Exhibit 21.0 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 23.1 Consent of Independent Auditors Filed herewith 31.1 Certification of President and Chief Executive Officer Filed herewith 31.2 Certification of Senior Vice President and Chief Financial Officer Filed herewith Section 1350 Certifications Filed herewith (B) Reports on Form 8-K. A Form 8-K (Item 12) was filed on October 31, 2003 regarding a press release announcing that AVANT had reported its financial results for the third quarter ended September 30, 2003. |
Signature Title Date /s/ J. BARRIE WARD (J. Barrie Ward) Chairman March 11, 2004 /s/ UNA S. RYAN (Una S. Ryan) President, Chief Executive Officer, and Director March 11, 2004 /s/ AVERY W. CATLIN (Avery W. Catlin) Senior Vice President, Chief Financial Officer and Treasurer March 11, 2004 /s/ FREDERICK W. KYLE (Frederick W. Kyle) Director March 11, 2004 /s/ THOMAS R. OSTERMUELLER (Thomas R. Ostermueller) Director March 11, 2004 /s/ HARRY H. PENNER, JR. (Harry H. Penner, Jr.) Director March 11, 2004 /s/ PETER A. SEARS (Peter A. Sears) Director March 11, 2004 /s/ KAREN S. LIPTON (Karen S. Lipton) Director March 11, 2004 PART I CURRENT PROGRAMS AND PARTNERSHIPS PART II Report of Independent Auditors AVANT IMMUNOTHERAPEUTICS, INC. CONSOLIDATED BALANCE SHEET AVANT IMMUNOTHERAPEUTICS, INC. CONSOLIDATED STATEMENT OF OPERATIONS AVANT IMMUNOTHERAPEUTICS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 AVANT IMMUNOTHERAPEUTICS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS AVANT IMMUNOTHERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2003, 2002 and 2001 PART III Equity Compensation Plan Information PART IV SIGNATURES |
333-59215), filed July 16, 1998 3.6 Third Certificate of Amendment of Third Restated Certificate of Incorporation of the Company Incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q, filed May 10, 2002 4.1 Shareholder Rights Agreement dated November 10, 1994 between the Company and State Street Bank and Trust Company as Rights Agent Incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 10-K filed March 28, 2000 4.2 Amendment to Shareholder Rights Agreement between State Street Bank and Trust Company and AVANT Immunotherapeutics, Inc. dated as of December 17, 2001 Incorporated by reference to Exhibit 4.2 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.1 AVANT Immunotherapeutics, Inc. 1994 Employee Stock Purchase Plan Incorporated by reference to Exhibit 10.1 of the Company's Registration Statement on Form S-8 filed June 8, 1994 10.2 Megan Health, Inc. Stock Option Plan Incorporated by reference to Exhibit 4.6 of the Company's Registration Statement on Form S-8 (Reg. |
333-52796), filed December 27, 2000 10.3 AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit A to the Company's Proxy Statement on Schedule 14A filed on April 1, 1999 10.4 Virus Research Institute, Inc. 1992 Equity Incentive Plan as amended and restated Incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K filed March 28, 2000 10.5 Performance Plan of the Company Incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 10-K filed March 28, 2000 10.6 Form of Agreement relating to Change of Control Incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 10-K filed March 28, 2000 10.7 Amended and Restated Employment Agreement between the Company and Una S. Ryan, Ph.D. dated August 20, 1998 Incorporated by reference to Exhibit 10.8 of he Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 10.8 Commercial Lease Agreement of May 1, 1996 between the Company and Fourth Avenue Ventures Limited Partnership Incorporated by reference to Exhibit 10.11 of the Company's quarterly report on Form 10-Q/A for the quarterly period ended June 30, 1996 (File No. |
Incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 10.12 Agreement between Lonza Biologics plc and the Company dated as of April 19, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.11 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.13 Stock Purchase Agreement dated December 1, 2000 by and between the Company and Pfizer Inc Incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.14 License and Royalty Agreement by and between Pfizer Inc, the Company and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.15 Amendment to License and Royalty Agreement by and between Pfizer Inc., the Company and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.14 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.16 Collaborative Research and Development Agreement by and between Pfizer Inc. and Megan Health, Inc. dated as of December 1, 2000, portions of which are subject to confidential treatment Incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 10.17 Exclusive License Agreement between AVANT Immunotherapeutics, Inc. and DynPort Vaccine Company, LLC dated as of October 10, 2001, portions of which are subject to a request for confidential treatment Incorporated by reference to Exhibit 10.17 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.18 First Amendment to AVANT Immunotherapeutics, Inc. 1999 Stock Option and Incentive Plan Incorporated by reference to Exhibit 10.18 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 10.19 First Amendment to Amended and Restated Employment Agreement between the Company and Una S. Ryan, Ph.D. dated as of December 23, 2002 Filed herewith 21.0 List of Subsidiaries Incorporated by reference to Exhibit 21.0 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 23.0 Consent of Independent Accountants Filed herewith (B) Reports on Form 8-K. None. |
Signature Title Date /s/ J. BARRIE WARD (J. Barrie Ward) Chairman March 14, 2003 /s/ UNA S. RYAN (Una S. Ryan) President, Chief Executive Officer, and Director March 13, 2003 /s/ AVERY W. CATLIN (Avery W. Catlin) Senior Vice President, Chief Financial Officer and Treasurer March 13, 2003 /s/ FREDERICK W. KYLE (Frederick W. Kyle) Director March 14, 2003 /s/ THOMAS R. OSTERMUELLER (Thomas R. Ostermueller) Director March 13, 2003 /s/ HARRY H. PENNER, JR. (Harry H. Penner, Jr.) Director March 14, 2003 /s/ PETER A. SEARS (Peter A. Sears) Director March 17, 2003 /s/ KAREN S. LIPTON (Karen S. Lipton) Director March 13, 2003 Certification I, Una S. Ryan, certify that: 1.I have reviewed this annual report on Form 10-K of AVANT Immunotherapeutics, Inc.; 2.Based on my knowledge, this annual 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 annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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-14 and 15d-14) for the registrant and we have: a.designed such disclosure controls and procedures 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 annual report is being prepared; b.evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c.presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a.all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6.The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Date: March 25, 2003 /s/ UNA S. RYAN Una S. Ryan President and Chief Executive Officer Certification I, Avery W. Catlin, certify that: 1.I have reviewed this annual report on Form 10-K of AVANT Immunotherapeutics, Inc.; 2.Based on my knowledge, this annual 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 annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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-14 and 15d-14) for the registrant and we have: a.designed such disclosure controls and procedures 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 annual report is being prepared; b.evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c.presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a.all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6.The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
LICENSES: We have entered into several significant license agreements relating to technology that is being developed by AVANT and/or its collaborators, including licenses from the following: Massachusetts Institute of Technology covering proprietary technologies for vaccine delivery related to PCPP microparticles; Penn State Research Foundation covering the production of polyphosphazene polymer; Harvard College relating to proprietary technology involving genetically altered Vibrio cholera and Salmonella strains; Cincinnati Children's Hospital involving proprietary rights and technologies relating to an attenuated rotavirus strain for a rotavirus vaccine; Harvard College and the Dana Farber Cancer Institute relating to a genetically-altered HSV2 virus for use in a genital herpes virus vaccine; and Harvard College and the NIH for the proprietary technology related to Therapore-TM-, a novel immunotherapy delivery system to be developed for delivery of products for the treatment of persistent viral infections and some forms of cancer. |
LICENSES: We have entered into several significant license agreements relating to technology that is being developed by AVANT and/or its collaborators, including licenses from: Massachusetts Institute of Technology covering proprietary technologies for vaccine delivery related to PCPP microparticles; Penn State Research Foundation covering the production of polyphosphazene polymer; Harvard College relating to proprietary technology involving genetically altered Vibrio cholera and Salmonella strains; Cincinnati Children's Hospital involving proprietary rights and technologies relating to an attenuated rotavirus strain for a rotavirus vaccine; Harvard College and the Dana Farber Cancer Institute relating to a genetically-altered HSV2 virus for use in a genital herpes virus vaccine; and Harvard College and the NIH for the proprietary technology related to Therapore(TM), a novel immunotherapy delivery system to be developed for delivery of products for the treatment of persistent viral infections and some forms of cancer. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Index to Consolidated Financial Statements and Supplementary Schedules 15 Report of Independent Accountants 16 Consolidated Balance Sheet at December 31, 1996 and 17 December 31, 1995 Consolidated Statement of Operations for the Years Ended 18 December 31, 1996, December 31, 1995 and December 31, 1994 18 Consolidated Statement of Stockholders' Equity for the Years 19 Ended December 31, 1996, December 31, 1995 and December 31, 1994 Consolidated Statement of Cash Flows for the Years Ended 20 December 31, 1996, December 31, 1995, and December 31, 1994 Notes to Consolidated Financial Statements 21 Report of Independent Accountants To The Board of Directors and Shareholders of T Cell Sciences, Inc.: In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of T Cell Sciences, Inc., and its subsidiary at December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the three years ended December 31, 1996 in conformity with generally accepted accounting principles. |
INCOME TAXES Year Ended December 31, -------------------------------------------------- 1996 1995 1994 -------------------------------------------------- Income tax benefit: Federal $ 3,696,048 $ 2,984,812 $3,705,826 State 388,031 354,821 1,013,701 -------------------------------------------------- 4,084,079 3,339,633 4,719,527 Deferred tax assets valuation allowance (4,084,079) (3,339,633) (4,719,527) -------------------------------------------------- $ -- $ -- $ -- ================================================== Deferred tax assets are comprised of the following at December 31: December 31, December 31, 1996 1995 ---------------------------------- Net Operating Loss Carryforwards $ 21,346,733 $ 17,207,019 Tax Credit Carryforwards 3,043,880 2,921,484 Other 981,784 1,159,815 ---------------------------------- Gross Deferred Tax Assets 25,372,397 21,288,318 Deferred Tax Assets Valuation Allowance (25,372,397) (21,288,318) ---------------------------------- $ -- $ -- ================================== In reconciliation between the amount of reported income tax expenses and the amount computed using the U.S. Statutory rate of 35% follows: 1996 1995 1994 --------------------------------------------- Loss at Statutory Rates $ (3,776,529) $(2,890,282) $(4,054,243) Research and Development Credits (189,381) (255,752) (165,657) State tax benefit, net of federal tax liabilities (337,425) (231,249) (573,354) Other 219,256 37,650 73,727 Benefit of losses and credits not recognized, increase in valuation allowance 4,084,079 3,339,633 4,719,527 --------------------------------------------- $ -- $ -- $ -- ============================================= The Company has provided a full valuation allowance for deferred tax assets as management has concluded that it is more likely than not that the Company will not recognize any benefits from its net deferred tax asset. |
A summary of the Stock Compensation Plan option activity for the years ended December 31, 1996, 1995 and 1994 is as follows: 1996 1995 Weighted Weighted Average Exercise Average Exercise ---------------------------------------------- Shares Price Shares Price - ------------------------------------------------------------------------------- Outstanding at January 1, 2,516,313 $5.82 2,559,820 $6.42 Granted 472,600 2.82 620,523 3.06 Exercised (60,710) 2.66 (88,668) 2.45 Canceled (625,007) 3.39 (575,362) 6.05 - ------------------------------------------------------------------------------- Outstanding at December 31, 2,303,196 $5.94 2,516,313 $5.82 ================================================================================ At December 31, Options exercisable 1,740,310 1,498,401 Available for grant 678,762 571,516 Weighted average fair value of options granted during year $1.26 $1.36 ================================================================================ The following table summarizes information about the stock options outstanding at December 31, 1996: Options Outstanding ----------------------------------------------------- Number Weighted Average Outstanding at Remaining Weighted Average Range of Exercise Prices December 31, 1996 Contractual Life Exercise Price - ------------------------- ----------------- ----------------- ----------------- $ 2.03 - 2.75 555,650 7.28 $ 2.46 2.94 - 3.19 621,308 6.36 3.03 3.25 - 6.13 492,238 4.97 4.53 6.25 - 12.38 434,000 2.77 9.70 20.00 - 20.00 200,000 0.41 20.00 - ------------------------------------------------------------------------------- $ 2.03 - 20.00 2,303,196 =============================================================================== Options Exercisable --------------------------------------------------- Number Exercisable at Weighted Average Range of Exercise Prices December 31, 1996 Exercise Price - ------------------------- ------------------------- ------------------------- $ 2.03 - 2.75 338,834 $ 2.46 2.94 - 3.19 345,873 3.03 3.25 - 6.13 428,228 4.54 6.25 - 12.38 427,375 9.74 20.00 - 20.00 200,000 20.00 - ------------------------------------------------------------------------------- $ 2.03 - 20.00 1,740,310 =============================================================================== Fair Value Disclosures Had compensation cost for the Company's option plans been determined based on the fair value at the grant dates, consistent with SFAS 123, the Company's net loss, and net loss per share for the years ending December 31, 1996 and 1995 would be as follows: 1996 1995 -------------------------------------------------------- Net Loss: As reported $10,790,084 $8,257,949 Pro forma $11,269,924 $8,471,362 Net Loss Per Share: As reported $0.50 $0.47 Pro forma 0.52 0.48 The fair value of the option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: 1996 1995 --------------------------------------------------------------------- Expected dividend yield 0% 0% Expected stock price volatility 51% 51% Risk-free interest rate 4.9% - 6.7% 5.4% - 7.5% Expected option term 2.6 Years 2.6 Years Because the determination of the fair value of all options granted includes an expected volatility factor in addition to the factors detailed in the table above and, because additional option grants are expected to be made each year, the above pro forma disclosures are not representative of pro forma effects of reported net income for future years. |
The pending sale of the U.S. Federal business may cause disruptions to the company’s business or business relationships, and may create uncertainty surrounding the company’s ongoing business operations, which could materially and adversely affect the company’s business, results of operations or financial condition, regardless of whether the sale of the U.S. Federal business is completed, including as a result of the attention of company’s management being directed to transaction-related considerations and being diverted from the day-to-day operations of the company’s business, the uncertainty regarding the company’s future which may adversely affect the company’s ability to hire, retain and motivate key personnel and other employees, and customers, suppliers or other parties with whom the company maintains business relationships experiencing uncertainty prior to the closing of the sale of the U.S. Federal business and seeking alternative relationships with third parties or seeking to terminate or renegotiated their relationships with the company. |
/s/ Peter A. Altabef *Denise K. Fletcher Peter A. Altabef Denise K. Fletcher Chairman, President and Chief Executive Officer Director (principal executive officer) /s/ Inder M. Singh *Philippe Germond Inder M. Singh Philippe Germond Senior Vice President and Chief Financial Officer Director (principal financial officer) /s/ Michael M. Thomson *Lisa A. Hook Michael M. Thomson Lisa A. Hook Vice President and Corporate Controller Director (principal accounting officer) *Jared L. Cohon *Deborah Lee James Jared L. Cohon Deborah Lee James Director Director *Nathaniel A. Davis *Paul E. Martin Nathaniel A. Davis Paul E. Martin Director Director *Matthew J. Desch *Regina M. Paolillo Matthew J. Desch Regina M. Paolillo Director Director *Lee D. Roberts Lee D. Roberts Director *By: /s/ Peter A. Altabef Peter A. Altabef Attorney-in-fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) (i)Includes write-off of bad debts less recoveries, reclassifications from other current liabilities and foreign currency translation adjustments. |
/s/ Peter A. Altabef *Denise K. Fletcher Peter A. Altabef Denise K. Fletcher Director Director, President and Chief Executive Officer (principal executive officer) /s/ Inder M. Singh *Philippe Germond Inder M. Singh Philippe Germond Senior Vice President and Chief Financial Officer Director (principal financial officer) /s/ Michael M. Thomson *Leslie F. Kenne Michael M. Thomson Leslie F. Kenne Vice President and Corporate Controller Director (principal accounting officer) *Jared L. Cohon Jared L. Cohon Paul E. Martin Director Director *Alison Davis *Lee D. Roberts Alison Davis Lee D. Roberts Director Director *Nathaniel A. Davis *Paul E. Weaver Nathaniel A. Davis Paul E. Weaver Director Director *By: /s/ Peter A. Altabef Peter A. Altabef Attorney-in-fact Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Unisys Corporation: Under date of February 21, 2017, we reported on the consolidated balance sheets of Unisys Corporation and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, deficit and cash flows for each of the years in the three year period ended December 31, 2016, as contained in the Annual Report to Stockholders for the year ended December 31, 2016 incorporated in this Form 10-K. |
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Risks and uncertainties that could cause our future results to differ materially from those expressed in our “forward-looking” statements include: • our ability to effectively anticipate and respond to volatility and rapid technological innovation in our industry; • our ability to improve margins in our services business; • our ability to sell new products while maintaining our installed base in our technology business; • our ability to access financing markets to refinance our outstanding debt; • our ability to realize anticipated cost savings and to successfully implement our cost reduction initiatives to drive efficiencies across all of our operations; • our significant pension obligations and requirements to make significant cash contributions to our defined benefit pension plans; • our ability to attract, motivate and retain experienced and knowledgeable personnel in key positions; • the risks of doing business internationally when a significant portion of our revenue is derived from international operations; • the potential adverse effects of aggressive competition in the information services and technology marketplace; • our ability to retain significant clients; • our contracts may not be as profitable as expected or provide the expected level of revenues; • cybersecurity breaches could result in significant costs and could harm our business and reputation; • a significant disruption in our IT systems could adversely affect our business and reputation; • we may face damage to our reputation or legal liability if our clients are not satisfied with our services or products; • the performance and capabilities of third parties with whom we have commercial relationships; • the adverse effects of global economic conditions, acts of war, terrorism or natural disasters; • contracts with U.S. governmental agencies may subject us to audits, criminal penalties, sanctions and other expenses and fines; • the potential for intellectual property infringement claims to be asserted against us or our clients; • the possibility that pending litigation could affect our results of operations or cash flow; and • the business and financial risk in implementing future dispositions or acquisitions. |
/S/ J. EDWARD COLEMAN *DENISE K. FLETCHER J. Edward Coleman Denise K. Fletcher Chairman of the Board and Chief Executive Officer (principal executive officer) Director /S/ JANET BRUTSCHEA HAUGEN *CLAYTON M. JONES Janet Brutschea Haugen Clayton M. Jones Senior Vice President and Chief Financial Officer (principal financial officer) Director /S/ SCOTT HURLEY *LESLIE F. KEENE Scott Hurley Leslie F. Keene Vice President and Corporate Controller (principal accounting officer) Director *HENRY C. DUQUES *CLAY B. LIFFLANDER Henry C. Duques Clay B. Lifflander Lead Director Director *J. P. BOLDUC *THEODORE E. MARTIN J.P. Bolduc Theodore E. Martin Director Director *JAMES J. DUDERSTADT *CHARLES B. MCQUADE James J. Duderstadt Charles B. McQuade Director Director *MATTHEW J. ESPE Matthew J. Espe Paul E. Weaver Director Director Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Unisys Corporation: Under date of February 24, 2010, we reported on the consolidated balance sheets of Unisys Corporation and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income, stockholders’ equity (deficit) and cash flows for the years then ended, as contained in the Annual Report to Stockholders for the year ended December 31, 2009 incorporated in the Form 10-K. |
Throughout fiscal year 2008, we implemented the following measures which resulted in the remediation of this material weakness during the quarter ended December 31, 2008: • The Company hired additional personnel and utilized third party resources with an appropriate level of U.S. GAAP tax knowledge and experience to its income tax accounting function and required the completion of income tax accounting training by personnel responsible for its foreign subsidiaries, • The Company strengthened its worldwide accounting capabilities by adding personnel with an appropriate level of U.S. GAAP accounting knowledge and experience in two locations, • The Company implemented appropriately designed processes and controls, instituted multi-level management reviews to ensure compliance with U.S. GAAP and such processes and controls have been tested and are determined to be properly designed and operating effectively, • The Company performed a review of its existing resources, including a competency assessment, for the finance organization and completed the action plans identified related to hiring and realignment, including the hiring of a new corporate controller and reassignment of responsibilities among key accounting personnel, and • Management developed and implemented certain mandatory U.S. GAAP training for finance personnel. |
Name Age Position with Unisys Lawrence A. Weinbach Chairman of the Board Joseph W. McGrath President and Chief Executive Officer George R. Gazerwitz Vice Chairman Peter Blackmore Executive Vice President; President, Worldwide Sales and Marketing Janet B. Wallace Executive Vice President, Six Sigma Lean David O. Aker Senior Vice President, Worldwide Human Resources Richard D. Badler Senior Vice President, Corporate Communications Janet Brutschea Haugen Senior Vice President and Chief Financial Officer Nancy Straus Sundheim Senior Vice President, General Counsel and Secretary Greg T. Baroni Vice President; President, Global Public Sector Scott A. Battersby Vice President and Treasurer Patricia A. Bradford Vice President, Worldwide Human Resources Dominick Cavuoto Vice President; President, Global Financial Services Leo C. Daiuto Vice President; President, Systems and Technology Randy J. Hendricks Vice President; President, Global Outsourcing and Infrastructure Services Jack F. McHale Vice President, Investor Relations Carol S. Sabochick Vice President and Corporate Controller There is no family relationship among any of the above-named executive officers. |
/s/ Lawrence A. Weinbach /s/ Carol S. Sabochick Lawrence A. Weinbach Carol S. Sabochick Chairman and Director Vice President and Corporate Controller (principal accounting officer) /s/ Joseph W. McGrath *J. P. Bolduc Joseph W. McGrath J. P. Bolduc President and Chief Executive Director Officer (principal executive officer) and Director /s/ Janet Brutschea Haugen *James J. Duderstadt Janet Brutschea Haugen James J. Duderstadt Senior Vice President Director and Chief Financial Officer (principal financial officer) *Henry C. Duques *Randall J. Hogan Henry C. Duques Randall J. Hogan Director Director *Matthew J. Espe *Edwin A. Huston Matthew J. Espe Edwin A. Huston Director Director *Denise K. Fletcher *Clayton M. Jones Denise K. Fletcher Clayton M. Jones Director Director *Gail D. Fosler *Theodore M. Martin Gail D. Fosler Theodore M. Martin Director Director *By: /s/ Lawrence A. Weinbach Lawrence A. Weinbach Attorney-in-Fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) (1) Write-off of bad debts less recoveries. |
NAME AGE POSITION WITH UNISYS - -------------------- --- ----------------------------- Lawrence A. Weinbach 63 Chairman of the Board, President and Chief Executive Officer George R. Gazerwitz 62 Executive Vice President; President, Systems and Technology Joseph W. McGrath 50 Executive Vice President; President, Global Industries David O. Aker 56 Senior Vice President, Worldwide Human Resources Richard D. Badler 52 Senior Vice President, Corporate Communications Robert D. Evans 55 Senior Vice President; President, Global Outsourcing Janet Brutschea Haugen 44 Senior Vice President and Chief Financial Officer Nancy Straus Sundheim 51 Senior Vice President, General Counsel and Secretary Janet B. Wallace 51 Senior Vice President; President, Global Infrastructure Services Leigh Alexander 45 Vice President and Chief Marketing Officer Scott A. Battersby 44 Vice President and Treasurer Leo C. Daiuto 57 Vice President, Product Development and Technology Jack F. McHale 53 Vice President, Investor Relations Carol S. Sabochick 42 Vice President and Corporate Controller There is no family relationship among any of the above-named executive officers. |
/s/ Lawrence A. Weinbach *James J. Duderstadt - ------------------------- -------------------- Lawrence A. Weinbach James J. Duderstadt Chairman of the Board, Director President and Chief Executive Officer (principal *Henry C. Duques executive officer) and --------------------- Director Henry C. Duques Director /s/ Janet Brutschea Haugen *Denise K. Fletcher - --------------------------- ------------------- Janet Brutschea Haugen Denise K. Fletcher Senior Vice President Director and Chief Financial Officer (principal financial *Gail D. Fosler officer) --------------------- Gail D. Fosler /s/ Carol S. Sabochick Director - --------------------------- Carol S. Sabochick *Melvin R. Goodes Vice President and --------------------- Corporate Controller Melvin R. Goodes (principal accounting officer) Director *J. P. Bolduc *Edwin A. Huston - ----------------------- --------------------- J. P. Bolduc Edwin A. Huston Director Director *Kenneth A. Macke *Theodore E. Martin - --------------------- --------------------- Kenneth A. Macke Theodore E. Martin Director Director *By:/s/ Lawrence A. Weinbach --------------------------- Lawrence A. Weinbach Attorney-in-Fact CERTIFICATION I, Lawrence A. Weinbach, certify that: 1. |
2, dated as of December 7, 2000, to Rights Agreement (incorporated by reference to Exhibit 4 to the registrant's Current Report on Form 8-K dated December 7, 2000) 10.1 Unisys Corporation Deferred Compensation Plan as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.2 Deferred Compensation Plan for Directors of Unisys Corporation, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.4 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.3 Unisys Corporation Director Stock Unit Plan, as amended and restated, effective September 22, 2000 (incorporated by reference to Exhibit 10.5 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.4 Unisys Directors Stock Option Plan, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.5 Unisys Executive Annual Variable Compensation Plan (incorporated by reference to Exhibit A to the registrant's Proxy Statement, dated March 23, 1993, for its 1993 Annual Meeting of Stockholders) 10.6 1990 Unisys Long-Term Incentive Plan, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.7 Unisys Corporation Executive Life Insurance Program (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999) 10.8 Form of Indemnification Agreement between Unisys Corporation and each of its Directors (incorporated by reference to Exhibit B to the registrant's Proxy Statement, dated March 22, 1988, for the 1988 Annual Meeting of Stockholders) 10.9 Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995) 10.10 Employment Agreement, dated April 25, 2002 between the registrant and Lawrence A. Weinbach (incorporated by reference to Exhibit 10 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002) 10.11 Amendment dated July 25, 2002, to Employment Agreement between the registrant and Lawrence A. Weinbach (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002) 10.12 Letter Agreement, dated June 3, 2002, between Unisys Corporation and Joseph W. McGrath (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002) 10.13 Unisys Corporation Supplemental Executive Retirement Income Plan, as amended through May 22, 1997 (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.14 Amendment 2001-1 to the Unisys Corporation Supplemental Executive Retirement Income Plan (incorporated by reference to Exhibit 10.13 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2001) 10.15 Summary of supplemental executive benefits provided to officers of Unisys Corporation (incorporated by reference to Exhibit 10.14 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2001) 10.16 Unisys Corporation Elected Officer Pension Plan, as amended through July 19, 2001 (incorporated by reference to Exhibit 10.15 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2001) 10.17 Unisys Corporation 2002 Stock Option Plan 10.18 Unisys Corporation Employee Stock Purchase Plan, as amended and restated July 1, 2001 10.19 Unisys Corporation Savings Plan, amended and restated effective January 1, 2002 12 Computation of Ratio of Earnings to Fixed Charges 13 Portions of the Annual Report to Stockholders of the Registrant for the year ended December 31, 2002 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 24 Power of Attorney |
Name Age Position with Unisys ---- --- -------------------- Lawrence A. Weinbach 62 Chairman of the Board, President and Chief Executive Officer Jack A. Blaine 57 Executive Vice President; President, Worldwide Sales and Services George R. Gazerwitz 61 Executive Vice President; President, Systems & Technology Joseph W. McGrath 49 Executive Vice President; President, Global Industries David O. Aker 55 Senior Vice President, Worldwide Human Resources Janet Brutschea Haugen 43 Senior Vice President and Chief Financial Officer Nancy Straus Sundheim 50 Senior Vice President, General Counsel and Secretary Janet B. Wallace 50 Senior Vice President; President, Global Network Services Leigh Alexander 44 Vice President and Chief Marketing Officer Richard D. Badler 51 Vice President, Corporate Communications Scott A. Battersby 43 Vice President and Treasurer Leo C. Daiuto 56 Vice President, Product Development and Technology Robert D. Evans 54 Vice President; President, Global Outsourcing Jack F. McHale 52 Vice President, Investor Relations There is no family relationship among any of the above-named executive officers. |
/s/ Lawrence A. Weinbach *James J. Duderstadt - ------------------------------ --------------------- Lawrence A. Weinbach James J. Duderstadt Chairman of the Board, Director President and Chief Executive Officer (principal *Henry C. Duques executive officer) and --------------------- Director Henry C. Duques Director /s/ Janet Brutschea Haugen *Denise K. Fletcher - ------------------------------ --------------------- Janet Brutschea Haugen Denise K. Fletcher Senior Vice President Director and Chief Financial Officer (principal financial and *Gail D. Fosler accounting officer) --------------------- Gail D. Fosler Director *J. P. Bolduc - ------------------------------ *Melvin R. Goodes J. P. Bolduc --------------------- Director Melvin R. Goodes Director *Kenneth A. Macke - ------------------------------ *Edwin A. Huston Kenneth A. Macke --------------------- Director Edwin A. Huston Director *Theodore E. Martin - ------------------------------ Theodore E. Martin Director *By:/s/ Lawrence A. Weinbach --------------------------- Lawrence A. Weinbach Attorney-in-Fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) Additions Balance at Charged Balance Beginning to Costs at End Description of Period and Expenses Deductions (1) of Period - ----------------------------------------------------------------------------- Allowance for Doubtful Accounts (deducted from accounts and notes receivable): Year Ended December 31, 1999 $51.2 $13.6 $(13.0) $51.8 Year Ended December 31, 2000 $51.8 $ 8.2 $(11.7) $48.3 Year Ended December 31, 2001 $48.3 $23.6 $(21.3) $50.6 (1) Write-off of bad debts less recoveries. |
2, dated as of December 7, 2000, to Rights Agreement (incorporated by reference to Exhibit 4 to the registrant's Current Report on Form 8-K dated December 7, 2000) 10.1 Unisys Corporation Deferred Compensation Plan as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.2 Deferred Compensation Plan for Directors of Unisys Corporation, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.4 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.3 Unisys Corporation Director Stock Unit Plan, as amended and restated, effective September 22, 2000 (incorporated by reference to Exhibit 10.5 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.4 Unisys Directors Stock Option Plan, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.5 Unisys Executive Annual Variable Compensation Plan (incorporated by reference to Exhibit A to the registrant's Proxy Statement, dated March 23, 1993, for its 1993 Annual Meeting of Stockholders) 10.6 1990 Unisys Long-Term Incentive Plan, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.7 Unisys Corporation Executive Life Insurance Program (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999) 10.8 Form of Indemnification Agreement between Unisys Corporation and each of its Directors (incorporated by reference to Exhibit B to the registrant's Proxy Statement, dated March 22, 1988, for the 1988 Annual Meeting of Stockholders) 10.9 Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995) 10.10 Employment Agreement, dated September 23, 1997, between the registrant and Lawrence A. Weinbach (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1997) 10.11 Employment Agreement, dated as of November 19, 1999, by and between Unisys Corporation and Joseph W. McGrath (incorporated by reference to Exhibit 10.24 to the registrant's Annual Report on Form 10-K for the year ended December 31, 1999) 10.12 Unisys Corporation Supplemental Executive Retirement Income Plan, as amended through May 22, 1997 (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.13 Amendment 2001-1 to the Unisys Corporation Supplemental Executive Retirement Income Plan 10.14 Summary of supplemental executive benefits provided to officers of Unisys Corporation 10.15 Unisys Corporation Elected Officer Pension Plan, as amended through July 19, 2001 10.16 Agreement dated November 14, 2001 between Unisys Corporation and Jack A. Blaine 12 Computation of Ratio of Earnings to Fixed Charges 13 Portions of the Annual Report to Stockholders of the Registrant for the year ended December 31, 2001 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 24 Power of Attorney |
Name Age Position with Unisys ---- --- --------------------- Lawrence A. Weinbach 61 Chairman of the Board, President and Chief Executive Officer Harold S. Barron 64 Vice Chairman Jack A. Blaine 56 Executive Vice President; President, Worldwide Sales and Services George R. Gazerwitz 60 Executive Vice President; President, Systems & Technology Joseph W. McGrath 48 Executive Vice President; President, Global Industries David O. Aker 54 Senior Vice President, Worldwide Human Resources Janet Brutschea Haugen 42 Senior Vice President and Chief Financial Officer James F. McGuirk II 57 Senior Vice President Nancy Straus Sundheim 49 Senior Vice President, General Counsel and Secretary Janet B. Wallace 49 Senior Vice President; President, Global Network Services Leigh Alexander 43 Vice President and Chief Marketing Officer Barbara A. Babcock 52 Vice President; President, e-Business Services Richard D. Badler 50 Vice President, Corporate Communications Scott A. Battersby 42 Vice President and Treasurer Leo C. Daiuto 55 Vice President, Product Development and Technology Robert D. Evans 53 Vice President; President, Global Outsourcing Jack F. McHale 51 Vice President, Investor Relations Alastair M. Taylor 52 Vice President, Worldwide Financial Services There is no family relationship among any of the above-named executive officers. |
/s/ Lawrence A. Weinbach *James J. Duderstadt - ------------------------- -------------------- Lawrence A. Weinbach James J. Duderstadt Chairman of the Board, Director President and Chief Executive Officer (principal *Henry C. Duques executive officer) and --------------------- Director Henry C. Duques Director /s/ Janet Brutschea Haugen *Gail D. Fosler - --------------------------- ------------------- Janet Brutschea Haugen Gail D. Fosler Senior Vice President Director and Chief Financial Officer (principal financial and *Melvin R. Goodes accounting officer) ---------------- Melvin R. Goodes Director *J. P. Bolduc - ----------------------- *Rajiv L. Gupta J. P. Bolduc ---------------- Director Rajiv L. Gupta Director *Kenneth A. Macke - --------------------- *Edwin A. Huston Kenneth A. Macke ---------------- Director Edwin A. Huston Director *Theodore E. Martin - ---------------------- Theodore E. Martin Director *By:/s/ Lawrence A. Weinbach --------------------------- Lawrence A. Weinbach Attorney-in-Fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) Additions Balance at Charged Balance Beginning to Costs at End Description of Period and Expenses Deductions (1) of Period - -------------------------------------------------------------------------------- Allowance for Doubtful Accounts (deducted from accounts and notes receivable): Year Ended December 31, 1998 $70.0 $ 4.0 $(22.8) $51.2 Year Ended December 31, 1999 $51.2 $13.6 $(13.0) $51.8 Year Ended December 31, 2000 $51.8 $ 8.2 $(11.7) $48.3 (1) Write-off of bad debts less recoveries. |
2, dated as of December 7, 2000, to Rights Agreement (incorporated by reference to Exhibit 4 to the registrant's Current Report on Form 8-K dated December 7, 2000) 10.1 Unisys Corporation Deferred Compensation Plan as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.2 Deferred Compensation Plan for Directors of Unisys Corporation, as amended and restated effective September 22, 2000(incorporated by reference to Exhibit 10.4 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.3 Unisys Corporation Director Stock Unit Plan, as amended and restated, effective September 22, 2000 (incorporated by reference to Exhibit 10.5 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.4 Unisys Directors Stock Option Plan, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.5 Summary of supplemental executive benefits provided to officers of Unisys Corporation (incorporated by reference to Exhibit 10(k) of the registrant's Annual Report on Form 10-K for the year ended December 31, 1992) 10.6 Unisys Executive Annual Variable Compensation Plan (incorporated by reference to Exhibit A to the registrant's Proxy Statement, dated March 23, 1993, for its 1993 Annual Meeting of Stockholders) 10.7 1990 Unisys Long-Term Incentive Plan, as amended and restated effective September 22, 2000 (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000) 10.8 Unisys Corporation Officers' Car Allowance Program, effective as of July 1, 1991 (incorporated by reference to Exhibit 10(hh) to the registrant's Annual Report on Form 10-K for the year ended December 31, 1991) 10.9 Unisys Corporation Elected Officer Pension Plan, as amended through May 22, 1997 (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.10 Unisys Corporation Supplemental Executive Retirement Income Plan, as amended through May 22, 1997 (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.11 Unisys Corporation Executive Life Insurance Program (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999) 10.12 Form of Indemnification Agreement between Unisys Corporation and each of its Directors (incorporated by reference to Exhibit B to the registrant's Proxy Statement, dated March 22, 1988, for the 1988 Annual Meeting of Stockholders) 10.13 Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995) 10.14 Employment Agreement, dated September 23, 1997, between the registrant and Lawrence A. Weinbach (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1997) 10.15 Employment Agreement, dated as of November 19, 1999, by and between Unisys Corporation and Joseph W. McGrath (incorporated by reference to Exhibit 10.24 to the registrant's Annual Report on Form 10-K for the year ended December 31, 1999) 12 Computation of Ratio of Earnings to Fixed Charges 13 Portions of the Annual Report to Stockholders of the Registrant for the year ended December 31, 2000 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 24 Power of Attorney |
Name Age Position with Unisys ---- --- -------------------- Lawrence A. Weinbach 60 Chairman of the Board, President and Chief Executive Officer Jack A. Blaine 55 Executive Vice President; President, Worldwide Sales and Services George R. Gazerwitz 59 Executive Vice President; President, Systems & Technology Joseph W. McGrath 47 Executive Vice President; President, Global Industries David O. Aker 53 Senior Vice President, Worldwide Human Resources Harold S. Barron 63 Senior Vice President and General Counsel James F. McGuirk II 56 Senior Vice President, Worldwide Public Sector Janet B. Wallace 48 Senior Vice President; President, Global Network Services Barbara A. Babcock 51 Vice President; President, e-Business Services Richard D. Badler 49 Vice President, Corporate Communications Robert D. Evans 52 Vice President; President, Global Outsourcing Janet Brutschea Haugen 41 Vice President, Controller and Acting Chief Financial Officer Jack F. McHale 50 Vice President, Investor Relations Angus F. Smith 58 Vice President and Treasurer Nancy Straus Sundheim 48 Vice President, Secretary and Deputy General Counsel Alastair M. Taylor 51 Vice President, Worldwide Financial Services There is no family relationship among any of the above-named executive officers. |
/s/ Lawrence A. Weinbach *James J. Duderstadt - ------------------------- -------------------- Lawrence A. Weinbach James J. Duderstadt Chairman of the Board, Director President and Chief Executive Officer (principal *Henry C. Duques executive officer) and --------------------- Director Henry C. Duques Director /s/ Janet Brutschea Haugen - --------------------------- *Gail D. Fosler Janet Brutschea Haugen -------------------- Vice President, Acting Chief Gail D. Fosler Financial Officer and Controller Director (principal financial and accounting officer) *J. P. Bolduc *Melvin R. Goodes - ----------------------- --------------------- J. P. Bolduc Melvin R. Goodes Director Director *Kenneth A. Macke *Edwin A. Huston - ----------------------- ---------------------- Kenneth A. Macke Edwin A. Huston Director Director *Robert McClements, Jr. *Theodore E. Martin - ----------------------- ---------------------- Robert McClements, Jr. Theodore E. Martin Director Director *By:/s/ Lawrence A. Weinbach -------------------------- Lawrence A. Weinbach Attorney-in-Fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) (a) Write-off of bad debts less recoveries. |
1, dated as of February 22, 1996, to Rights Agreement (incorporated by reference to Exhibit 4 to the registrant's Current Report on Form 8-K dated February 22, 1996) 10.1 Deferred Compensation Plan for Executives of Unisys Corporation, as amended and restated effective February 26, 1998 (incorporated by reference to Exhibit 10.1 to the registrant's Annual Report on Form 10-K for the year ended December 31, 1998) 10.2 Amendment, effective September 24, 1999, to the Deferred Compensation Plan for Executives of Unisys Corporation (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999) 10.3 Deferred Compensation Plan for Directors of Unisys Corporation, as amended and restated effective May 22, 1997 (incorporated by reference to Exhibit 10.5 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.4 Amendment, effective September 24, 1999, to the Deferred Compensation Plan for Directors of Unisys Corporation (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999) 10.5 Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995) 10.6 Employment Agreement, dated September 23, 1997, between the registrant and Lawrence A. Weinbach (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1997) 10.7 Unisys Corporation Director Stock Unit Plan, as amended and restated, effective May 22, 1997, (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.8 Amendment, effective September 24, 1999, to the Director Stock Unit Plan (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999) 10.9 Summary of supplemental executive benefits provided to officers of Unisys Corporation (incorporated by reference to Exhibit 10(k) of the registrant's Annual Report on Form 10-K for the year ended December 31, 1992) 10.10 Unisys Executive Annual Variable Compensation Plan (incorporated by reference to Exhibit A to the registrant's Proxy Statement, dated March 23, 1993, for its 1993 Annual Meeting of Stockholders) 10.11 1982 Unisys Long-Term Incentive Plan, as amended and restated through September 1, 1989 (incorporated by reference to Exhibit 10(p) to the registrant's Annual Report on Form 10-K for the year ended December 31, 1990) 10.12 Amendment, dated December 11, 1989, to the 1982 Unisys Long-Term Incentive Plan (incorporated by reference to Exhibit 10(o) to the registrant's Annual Report on Form 10-K for the year ended December 31, 1989) 10.13 Amendment, dated July 25, 1990, to 1982 Unisys Long-Term Incentive Plan (incorporated by reference to Exhibit 10(r) to the registrant's Annual Report on Form 10-K for the year ended December 31, 1990) 10.14 1990 Unisys Long-Term Incentive Plan, effective as of January 1, 1990 (incorporated by reference to Exhibit A to the registrant's Proxy Statement, dated March 20, 1990, for its 1990 Annual Meeting of Stockholders) 10.15 Amendment, dated May 26, 1994, to 1990 Unisys Long-Term Incentive Plan, effective as of February 22, 1990 (incorporated by reference to Exhibit 10.15 to the registrant's Annual Report on Form 10-K for the year ended December 31, 1994) 10.16 Amendment, dated May 25, 1995, to 1990 Unisys Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995) 10.17 Amendment, dated February 22, 1996, to 1990 Unisys Long- Term Incentive Plan (incorporated by reference to Exhibit 10 to registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996) 10.18 Amendment, effective April 28, 1999, to the 1990 Unisys Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999) 10.19 Unisys Corporation Officers' Car Allowance Program, effective as of July 1, 1991 (incorporated by reference to Exhibit 10(hh) to the registrant's Annual Report on Form 10-K for the year ended December 31, 1991) 10.20 Form of Indemnification Agreement between Unisys Corporation and each of its Directors (incorporated by reference to Exhibit B to the registrant's Proxy Statement, dated March 22, 1988, for the 1988 Annual Meeting of Stockholders) 10.21 Unisys Corporation Elected Officer Pension Plan, as amended through May 22, 1997 (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.22 Unisys Corporation Supplemental Executive Retirement Income Plan, as amended through May 22, 1997 (incorporated by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997) 10.23 Unisys Corporation Executive Life Insurance Program (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999) 10.24 Employment Agreement, dated as of November 19, 1999, by and between Unisys Corporation and Joseph W. McGrath 10.25 Unisys Directors Stock Option Plan, effective January 1, 12 Computation of Ratio of Earnings to Fixed Charges 13 Portions of the Annual Report to Stockholders of the Registrant for the year ended December 31, 1999 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 24 Power of Attorney 27 Financial Data Schedule |
/s/Lawrence A. Weinbach *James J. Duderstadt - ------------------------- --------------------- Lawrence A. Weinbach James J. Duderstadt Chairman of the Board, Director President and Chief Executive Officer (principal *Henry C. Duques executive officer) and --------------------- Director Henry C. Duques Director /s/Robert H. Brust *Gail D. Fosler - ------------------------- --------------------- Robert H. Brust Gail D. Fosler Senior Vice President and Director Chief Financial Officer (principal financial officer) /s/Janet Brutschea Haugen *Melvin R. Goodes - ------------------------- --------------------- Janet Brutschea Haugen Melvin R. Goodes Vice President and Director Controller (principal accounting officer) *J. P. Bolduc *Edwin A. Huston - ------------------------- --------------------- J. P. Bolduc Edwin A. Huston Director Director *Kenneth A. Macke *Theodore E. Martin - ------------------------- --------------------- Kenneth A. Macke Theodore E. Martin Director Director *Robert McClements, Jr. - ------------------------- Robert McClements, Jr. Director *By:/s/Lawrence A. Weinbach --------------------------- Lawrence A. Weinbach Attorney-in-Fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) (a) Write-off of bad debts less recoveries. |
NAME AGE POSITION WITH UNISYS ---- --- -------------------- Lawrence A. Weinbach 58 Chairman of the Board, President and Chief Executive Officer Gerald A. Gagliardi 50 Executive Vice President; President, Unisys Global Customer Services George R. Gazerwitz 57 Executive Vice President; President, Unisys Computer Systems Lawrence C. Russell 59 Executive Vice President; President, Unisys Information Services David O. Aker 51 Senior Vice President, Worldwide Human Resources Harold S. Barron 61 Senior Vice President, General Counsel and Secretary Jack A. Blaine 53 Senior Vice President; President, Pacific Asia Americas Robert H. Brust 54 Senior Vice President and Chief Financial Officer Dewaine L. Osman 63 Senior Vice President, Strategic Development Janet Brutschea Haugen 39 Vice President and Controller James F. McGuirk II 54 Vice President; President Federal Systems Jack F. McHale 49 Vice President, Investor Relations Angus F. Smith 56 Vice President and Treasurer There are no family relationships among any of the above-named executive officers. |
/s/Lawrence A. Weinbach *James J. Duderstadt - ----------------------- -------------------- Lawrence A. Weinbach James J. Duderstadt Chairman of the Board, Director President and Chief Executive Officer (principal *Henry C. Duques executive officer) and --------------------- Director Henry C. Duques Director /s/Robert H. Brust *Gail D. Fosler - --------------------- -------------------- Robert H. Brust Gail D. Fosler Senior Vice President and Director Chief Financial Officer (principal financial officer) /s/Janet Brutschea Haugen *Melvin R. Goodes - ------------------------ --------------------- Janet Brutschea Haugen Melvin R. Goodes Vice President and Director Controller (principal accounting officer) *J. P. Bolduc *Edwin A. Huston - --------------------- --------------------- J. P. Bolduc Edwin A. Huston Director Director *Kenneth A. Macke *Theodore E. Martin - --------------------- --------------------- Kenneth A. Macke Theodore E. Martin Director Director *Robert McClements, Jr. *Alan E. Schwartz - --------------------- --------------------- Robert McClements, Jr. Alan E. Schwartz Director Director *By:/s/Lawrence A. Weinbach --------------------------- Lawrence A. Weinbach Attorney-in-Fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) Additions Balance at Charged Balance Beginning to Costs at End Description of Period and Expenses Deductions (a) of Period - ------------------------------------------------------------------------------ Allowance for Doubtful Accounts (deducted from accounts and notes receivable): Year Ended December 31, 1995 $ 74.5 $21.0 $( 8.8) $ 86.7 Year Ended December 31, 1996 $ 86.7 $ 2.5 $( 5.3) $ 83.9 Year Ended December 31, 1997 $ 83.9 $ 9.8 $ (24.2) $ 69.5 (a) Write-off of bad debts less recoveries. |
Name Age Position with Unisys ---- --- -------------------- James A. Unruh 54 Chairman of the Board and Chief Executive Officer Alan G. Lutz 50 Executive Vice President; President, Computer Systems Group Lawrence C. Russell 57 Executive Vice President; President, Information Services Group Harold S. Barron 59 Senior Vice President, General Counsel and Secretary Edward A. Blechschmidt 43 Senior Vice President, Chief Financial Officer and Controller Malcolm D. Coster 51 Senior Vice President, Strategic Business Development Gerald A. Gagliardi 48 Senior Vice President; President, Global Customer Services Group Dewaine L. Osman 61 Senior Vice President, Information Technology and Strategic Development, and President, Pacific Asia/Americas Group David O. Aker 49 Vice President, Worldwide Human Resources Jack A. Blaine 51 Vice President; President, Latin America and Caribbean Division Frank G. Brandenberg 49 Vice President; Group Vice President and General Manager, Client/Server Systems George R. Gazerwitz 55 Vice President; President, Japan Operations Patricia L. Higgins 46 Vice President; Group Vice President and General Manager, Worldwide Communications Market Sector Group John J. Holton 62 Vice President, Client Relations Jack F. McHale 46 Vice President, Investor and Corporate Communications Stefan C. Riesenfeld 47 Vice President and Treasurer William G. Rowan 53 Vice President, Finance, Pacific Asia/Americas Group There are no family relationships among any of the above- named executive officers. |
/s/ James A. Unruh *Melvin R. Goodes - --------------------- --------------------- James A. Unruh Melvin R. Goodes Chairman of the Board Director and Chief Executive Officer (principal executive officer) and Director /s/ Edward A. Blechschmidt *Edwin A. Huston - --------------------- --------------------- Edward A. Blechschmidt Edwin A. Huston Senior Vice President, Director Chief Financial Officer and Controller (principal financial and accounting officer) *J. P. Bolduc *Kenneth A. Macke - --------------------- --------------------- J. P. Bolduc Kenneth A. Macke Director Director *James J. Duderstadt *Theodore E. Martin - --------------------- --------------------- James J. Duderstadt Theodore E. Martin Director Director *Gail D. Fosler *Robert McClements, Jr. - --------------------- ----------------------- Gail D. Fosler Robert McClements, Jr. Director Director *Alan E. Schwartz ----------------------- Alan E. Schwartz Director *By:/s/ Edward A. Blechschmidt ----------------------- Edward A. Blechschmidt Attorney-in-Fact UNISYS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Millions) Additions Balance at Charged Balance Beginning to Costs at End Description of Period and Expenses Deductions(a) of Period - ------------------------------- ---------- ------------ ------------- --------- Allowance for Doubtful Accounts (deducted from accounts and notes receivable): Year Ended December 31, 1993 $101.7 $ 9.6 $(32.6) $78.7 Year Ended December 31, 1994 78.7 5.4 (9.6) 74.5 Year Ended December 31, 1995 74.5 21.0 (8.8) 86.7 (a) Write-off of bad debts less recoveries. |
Name Age Position with Unisys ---- --- -------------------- James A. Unruh 52 Chairman of the Board and Chief Executive Officer Hugh J. Lynch 59 Executive Vice President; President, Computer Systems Group Albert F. Zettlemoyer 59 Executive Vice President; President, Government Systems Group Harold S. Barron 57 Senior Vice President and General Counsel Edward A. Blechschmidt 41 Senior Vice President; President, Pacific Asia Americas Division Victor E. Millar 58 Senior Vice President; President, Worldwide Information Services William B. Patton, Jr. 58 Senior Vice President; President, United States Division George T. Robson 46 Senior Vice President and Chief Financial Officer Jack A. Blaine 49 Vice President; General Manager, Latin American and Caribbean Group, Pacific Asia Americas Division Frank G. Brandenberg 47 Vice President; Deputy President, Computer Systems Group George R. Gazerwitz 53 Vice President, Marketing, United States Division John J. Holton 61 Vice President, Strategic Account Marketing, United States Division Deborah C. Hopkins 39 Vice President and Controller Clive W. Ingham 48 Vice President; Group General Manager, European Group, Europe/Africa Division Jack F. McHale 45 Vice President, Investor and Corporate Communications Thomas E. McKinnon 49 Vice President, Human Resources James L. Murtaugh 55 Vice President, Engineering, Computer Systems Group Dewaine L. Osman 59 Vice President, Corporate Planning and Business Development John W. Perry 55 Vice President; President, Financial Line of Business, Information Services and Systems Group Stefan C. Riesenfeld 45 Vice President and Treasurer William G. Rowan 51 Vice President, Chief Information Officer Bobette Jones 65 Secretary There are no family relationships among any of the above- named executive officers. |
/s/ James A. Unruh *Gail D. Fosler - --------------------- --------------------- James A. Unruh Gail D. Fosler Chairman of the Board Director and Chief Executive Officer (principal executive officer) and Director /s/ George T. Robson *Melvin R. Goodes - --------------------- --------------------- George T. Robson Melvin R. Goodes Senior Vice President and Director Chief Financial Officer (principal financial officer) /s/ Deborah C. Hopkins *Edwin A. Huston - --------------------- --------------------- Deborah C. Hopkins Edwin A. Huston Vice President and Director Controller (principal accounting officer) *J. P. Bolduc *Kenneth A. Macke - --------------------- --------------------- J. P. Bolduc Kenneth A. Macke Director Director *James J. Duderstadt *Robert McClements, Jr. - --------------------- ----------------------- James J. Duderstadt Robert McClements, Jr. Director Director *William G. Milliken *Donald V. Seibert - --------------------- ----------------------- William G. Milliken Donald V. Seibert Director Director *Alan E. Schwartz - --------------------- Alan E. Schwartz Director *By:/s/ George T. Robson ----------------------- George T. Robson Attorney-in-Fact EXHIBIT INDEX Exhibit Number Description - ------- ----------- 3.1 Restated Certificate of Incorporation of Unisys Corporation, incorporated by reference to Exhibit 3(a) to the registrant's Annual Report on Form 10-K for the year ended December 31, 1992. |
Under the regulations, a state member bank will be: ● well capitalized if it has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a Common equity tier 1 capital ratio of 6.5% or greater, a leverage capital ratio of 5% or greater and is not subject to any written agreement, order, capital directive or prompt corrective action directive by a federal bank regulatory agency to maintain a specific capital level for any capital measure; ● “adequately capitalized” if it has a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 6% or greater, a Common Equity Tier 1 capital ratio of 4.5% or greater, and generally has a leverage capital ratio of 4% or greater; ● “undercapitalized” if it has a total risk-based capital ratio of less than 8%, a Tier 1 risk-based capital ratio of less than 6%, a Common Equity Tier 1 capital ratio of less than 4.5% or generally has a leverage capital ratio of less than 4%; ● “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6%, a Tier 1 risk-based capital ratio of less than 4%, a Common Equity Tier 1 capital ratio of less than 3%, or a leverage capital ratio of less than 3%; or ● “critically undercapitalized” if its tangible equity is equal to or less than 2% to total assets. |
The following provisions of the 2018 Growth Act may be especially helpful to banks of our size as regulations adopted in 2019 became effective: • “qualifying community banks,” defined as institutions with total consolidated assets of less than $10 billion, which meet a “community bank leverage ratio” of 8.00% to 10.00%, may be deemed to have satisfied applicable risk based capital requirements as well as the capital ratio requirements; • section 13(h) of the BHC Act, or the “Volcker Rule,” is amended to exempt from the Volcker Rule, banks with total consolidated assets valued at less than $10 billion (“community banking organizations”), and trading assets and liabilities comprising not more than 5.00% of total assets; • “reciprocal deposits” will not be considered “brokered deposits” for FDIC purposes, provided such deposits do not exceed the lesser of $5 billion or 20% of the bank’s total liabilities; and The Volcker Rule change may enable us to invest in certain collateralized loan obligations that are treated as “covered funds” prohibited to banking entities by the Volcker Rule. |
Operational risks and losses can result from internal and external fraud; gaps or weaknesses in our risk management or internal audit procedures; errors by employees or third parties, including our vendors, failures to document transactions properly or obtain proper authorizations; failure to comply with applicable regulatory requirements in the various jurisdictions where we do business or have customers; failures in our estimates models that rely on; equipment failures, including those caused by natural disasters, or by electrical, telecommunications or other essential utility outages; business continuity and data security system failures, including those caused by computer viruses, cyberattacks, unforeseen problems encountered while implementing major new computer systems or, failures to timely and properly upgrade and patch existing systems or inadequate access to data or poor response capabilities in light of such business continuity and data security system failures; or the inadequacy or failure of systems and controls, including those of our vendors or counterparties. |
See “Supervision and Regulation-Basel III Capital Rules.” Although we currently have capital ratios that exceed all these minimum levels and a strategic plan to maintain these levels, we or the Bank may be unable to continue to satisfy the capital adequacy requirements for various reasons, which may include: • losses and/or increases in the Bank’s credit risk assets and expected losses resulting from the deterioration in the creditworthiness of borrowers and the issuers of equity and debt securities; • difficulty in refinancing or issuing instruments upon redemption or at maturity of such instruments to raise capital under acceptable terms and conditions; • declines in the value of our securities portfolios; • revisions to the regulations or their application by our regulators that increase our capital requirements; • reduced total earnings on our assets will reduce our internal generation of capital available to support our balance sheet growth; • reductions in the value of our MSRs and DTAs; and other adverse developments; and • unexpected growth and an inability to increase capital timely. |
• Employees’ health could be adversely affected, necessitating their recovery away from work; • Unavailability of key personnel necessary to conduct our business activities; • Our operating effectiveness may be reduced as our employees work from home or suffer from the COVID virus; • Shelter in place, remote work or other restrictions and interruptions of our business and contact with our customers; • Sustained closures of our branch lobbies or the offices of our customers; • Declines in demand for loans and other banking services and products, and reduced usage and interchange fees on our payment cards; • Continuing large scale fiscal and monetary stimulus actions may stabilize the economy, but may increase economic and market risks, including valuation “bubbles,” volati lity in various assets and inflation; • Inflation and increases in interest rates may result from fiscal stimulus and monetary stimulus, and the Federal Reserve has indicated it is willing to permit inflation to run moderately above its 2% target for some time; • Increased savings and debt reduction by consumers could reduce demand for credit and our earning assets; • Significant volatility in United States financial markets and our investment securities portfolio, including credit concerns in municipal securities; • Declines in the credit quality of our loan portfolio, owing to the effects of the COVID-19 pandemic in the markets we serve, leading to increased provisions for loan losses and increases in our allowance for possible credit losses; • Declines in the value of collateral for loans, including real estate collateral, especially in industries such as travel, hospitality, restaura nts and retailers; • Declines in the net worth and liquidity of borrowers, impairing their ability to pay timely their loan obligations to us; • Generally low market interest rates that reduce our net interest income and our profitability; • Loan deferrals and loan modifications, and mortgage foreclosure moratoria, including those mandated by law, or which are encouraged by our regulators, may increase our expense and risks of collectability, reduce our cash flows and liquidity and adversely affect our results of operations and financial condition; • The end of temporary regulatory accounting and capital relief for banks regarding the effects of the COVID-19 pandemic, including loan deferrals and modifications, could increase our TDRs and require additions to our allowance for loan losses, which may adversely affect our income, financial condition and capital; • Our waiver of various fees and service charges to support our customers and communities will adversely affect our results of operation and our liquidity and financial position; • The COVID-19 pandemic may change customer financial behaviors and payment practices. |
Electronic banking could become more popular with less customers doing business at our offices; • Certain of our assets, including loans and securities, may become impaired, which would adversely affect our results of operation and financial condition and mortgage loan foreclosure moratoria may limit our ability to timely act to protect our interests in the loan collateral; • Reductions in income or losses will adversely affect our capital and growth of capital, including our capital for bank regulatory purposes; • Losses or reductions in net income may adversely affect the growth or amount of dividends we can pay on our common stock; • The effects of government fiscal and monetary policies, including changes in such policies, or the effects of COVID-19 relief programs are discontinued, on the economy and financial stability, generally, and on our business, results of operations and financial condition cannot be predicted; • Cybercriminals may increase their attempts to compromise business and consumer emails, including an increase in phishing attempts, and fraudulent vendors or other parties may view the pandemic as an opportunity to prey upon consumers and businesses during this time. |
December 31, 2020 1 year 1 to 5 5 to 10 After 10 Total (Dollars in thousands) or less years years years Fair Value Agency obligations $ 5,048 24,834 55,367 12,199 97,448 Agency MBS - 1,154 20,502 141,814 163,470 State and political subdivisions 8,405 64,745 74,259 Total available-for-sale $ 5,525 26,620 84,274 218,758 335,177 Weighted average yield: Agency obligations 1.59% 1.84% 1.51% 1.22% 1.56% Agency MBS - 3.31% 1.67% 1.42% 1.46% State and political subdivisions 4.01% 4.13% 2.32% 2.81% 2.77% Total available-for-sale 1.80% 1.95% 1.63% 1.82% 1.78% Loans December 31 (In thousands) Commercial and industrial $ 82,585 56,782 63,467 59,086 49,850 Construction and land development 33,514 32,841 40,222 39,607 41,650 Commercial real estate 255,136 270,318 261,896 239,033 220,439 Residential real estate 84,154 92,575 102,597 106,863 110,855 Consumer installment 7,099 8,866 9,295 9,588 8,712 Total loans 462,488 461,382 477,477 454,177 431,506 Less: unearned income (788) (481) (569) (526) (560) Loans, net of unearned income $ 461,700 460,901 476,908 453,651 430,946 Total loans, net of unearned income, were $461.7 million at December 31, 2020 , and $460.9 million at December 31, 2019. |
Year ended December 31 (In thousands) Net interest income (GAAP) $ 24,338 26,064 25,570 24,526 22,732 Tax-equivalent adjustment 1,205 1,276 Net interest income (Tax-equivalent) $ 24,830 26,621 26,183 25,731 24,008 Table 2 - Selected Financial Data Year ended December 31 (Dollars in thousands, except per share amounts) Income statement Tax-equivalent interest income (a) $ 28,686 30,804 29,859 29,325 28,092 Total interest expense 3,856 4,183 3,676 3,594 4,084 Tax equivalent net interest income (a) 24,830 26,621 26,183 25,731 24,008 Provision for loan losses 1,100 (250) - (300) (485) Total noninterest income 5,375 5,494 3,325 3,441 3,383 Total noninterest expense 19,554 19,697 17,874 16,784 15,348 Net earnings before income taxes and tax-equivalent adjustment 9,551 12,668 11,634 12,688 12,528 Tax-equivalent adjustment 1,205 1,276 Income tax expense 1,605 2,370 2,187 3,637 3,102 Net earnings $ 7,454 9,741 8,834 7,846 8,150 Per share data: Basic and diluted net earnings $ 2.09 2.72 2.42 2.15 2.24 Cash dividends declared $ 1.02 1.00 0.96 0.92 0.90 Weighted average shares outstanding Basic and diluted 3,566,207 3,581,476 3,643,780 3,643,616 3,643,504 Shares outstanding 3,566,276 3,566,146 3,643,868 3,643,668 3,643,523 Book value $ 30.20 27.57 24.44 23.85 22.55 Common stock price High $ 63.40 53.90 53.50 40.25 31.31 Low 24.11 30.61 28.88 30.75 24.56 Period-end $ 42.29 53.00 31.66 38.90 31.31 To earnings ratio 20.23 x 19.49 13.08 18.09 13.98 To book value % Performance ratios: Return on average equity 7.12 % 10.35 10.14 9.17 9.65 Return on average assets 0.83 % 1.18 1.08 0.94 0.98 Dividend payout ratio 48.80 % 36.76 39.67 42.79 40.18 Average equity to average assets 11.63 % 11.39 10.63 10.30 10.14 Asset Quality: Allowance for loan losses as a % of: Loans 1.22 % 0.95 1.00 1.05 1.08 Nonperforming loans 1,052 % 2,345 2,691 Nonperforming assets as a % of: Loans and other real estate owned 0.12 % 0.04 0.07 0.66 0.59 Total assets 0.06 % 0.02 0.04 0.35 0.30 Nonperforming loans as % of loans 0.12 % 0.04 0.04 0.66 0.55 Net (recoveries) charge-offs as a % of average loans (0.03) % 0.03 (0.01) (0.09) (0.19) Capital Adequacy (c): CET 1 risk-based capital ratio 17.27 % 17.28 16.49 16.42 16.44 Tier 1 risk-based capital ratio 17.27 % 17.28 16.49 16.98 17.00 Total risk-based capital ratio 18.31 % 18.12 17.38 17.91 17.95 Tier 1 leverage ratio 10.32 % 11.23 11.33 10.95 10.27 Other financial data: Net interest margin (a) 2.92 % 3.43 3.40 3.29 3.05 Effective income tax rate 17.72 % 19.57 19.84 31.67 27.57 Efficiency ratio (b) 64.74 % 61.33 60.57 57.53 56.03 Selected period end balances: Securities $ 335,177 235,902 239,801 257,697 243,572 Loans, net of unearned income 461,700 460,901 476,908 453,651 430,946 Allowance for loan losses 5,618 4,386 4,790 4,757 4,643 Total assets 956,597 828,570 818,077 853,381 831,943 Total deposits 839,792 724,152 724,193 757,659 739,143 Long-term debt - - - 3,217 3,217 Total stockholders’ equity 107,689 98,328 89,055 86,906 82,177 (a) Tax-equivalent. |
Table 3 - Average Balance and Net Interest Income Analysis Year ended December 31 Interest Interest Average Income/ Yield/ Average Income/ Yield/ (Dollars in thousands) Balance Expense Rate Balance Expense Rate Interest-earning assets: Loans and loans held for sale (1) $ 465,378 $ 22,055 4.74% $ 474,259 $ 22,930 4.83% Securities - taxable 234,420 3,932 1.68% 178,410 4,000 2.24% Securities - tax-exempt (2) 63,029 2,343 3.72% 66,628 2,656 3.99% Total securities 297,449 6,275 2.11% 245,038 6,656 2.72% Federal funds sold 30,977 0.41% 20,223 2.09% Interest bearing bank deposits 56,104 0.41% 36,869 2.16% Total interest-earning assets 849,908 28,686 3.38% 776,389 30,804 3.97% Cash and due from banks 13,727 14,037 Other assets 37,010 36,119 Total assets $ 900,645 $ 826,545 Interest-bearing liabilities: Deposits: NOW $ 154,431 0.34% $ 134,430 0.53% Savings and money market 242,485 1,071 0.44% 218,630 0.44% Certificates of deposits 165,120 2,253 1.36% 170,835 2,497 1.46% Total interest-bearing deposits 562,036 3,847 0.68% 523,895 4,176 0.80% Short-term borrowings 1,864 0.48% 1,443 0.49% Total interest-bearing liabilities 563,900 3,856 0.68% 525,338 4,183 0.80% Noninterest-bearing deposits 227,127 203,828 Other liabilities 4,884 3,228 Stockholders' equity 104,734 94,151 Total liabilities and and stockholders' equity $ 900,645 $ 826,545 Net interest income and margin $ 24,830 2.92% $ 26,621 3.43% (1) Average loan balances are shown net of unearned income and loans on nonaccrual status have been included in the computation of average balances. |
Table 4 - Volume and Rate Variance Analysis Years ended December 31, 2020 vs. 2019 Years ended December 31, 2019 vs. 2018 Net Due to change in Net Due to change in (Dollars in thousands) Change Rate (2) Volume (2) Change Rate (2) Volume (2) Interest income: Loans and loans held for sale $ (875) (455) (420) $ 1,164 Securities - taxable (68) (1,010) (51) (69) Securities - tax-exempt (1) (313) (180) (133) (265) (88) (177) Total securities (381) (1,190) (316) (70) (246) Federal funds sold (298) (342) (131) (177) Interest bearing bank deposits (564) (645) Total interest income $ (2,118) (2,632) $ Interest expense: Deposits: NOW $ (187) (255) $ Savings and money market (3) (10) Certificates of deposits (244) (166) (78) (193) Total interest-bearing deposits (329) (424) (156) Short-term borrowings - (11) (5) (6) Long-term debt - - - (46) - (46) Total interest expense (327) (424) (208) Net interest income $ (1,791) (2,208) $ (272) (1) Yields on tax-exempt securities have been computed on a tax-equivalent basis using an income tax rate of 21%. |
Table 5 - Loan Portfolio Composition December 31 (In thousands) Commercial and industrial $ 82,585 56,782 63,467 59,086 49,850 Construction and land development 33,514 32,841 40,222 39,607 41,650 Commercial real estate 255,136 270,318 261,896 239,033 220,439 Residential real estate 84,154 92,575 102,597 106,863 110,855 Consumer installment 7,099 8,866 9,295 9,588 8,712 Total loans 462,488 461,382 477,477 454,177 431,506 Less: unearned income (788) (481) (569) (526) (560) Loans, net of unearned income 461,700 460,901 476,908 453,651 430,946 Less: allowance for loan losses (5,618) (4,386) (4,790) (4,757) (4,643) Loans, net $ 456,082 456,515 472,118 448,894 426,303 Table 6 - Loan Maturities and Sensitivities to Changes in Interest Rates December 31, 2020 1 year 1 to 5 After 5 Adjustable Fixed (Dollars in thousands) or less years years Total Rate Rate Total Commercial and industrial $ 20,829 26,025 35,731 82,585 15,159 67,426 82,585 Construction and land development 25,461 6,160 1,893 33,514 19,915 13,599 33,514 Commercial real estate 19,534 109,706 125,896 255,136 4,798 250,338 255,136 Residential real estate 6,853 23,549 53,752 84,154 30,272 53,882 84,154 Consumer installment 1,981 4,595 7,099 7,037 7,099 Total loans $ 74,658 170,035 217,795 462,488 70,206 392,282 462,488 Table 7 - Allowance for Loan Losses and Nonperforming Assets Year ended December 31 (Dollars in thousands) Allowance for loan losses: Balance at beginning of period $ 4,386 4,790 4,757 4,643 4,289 Charge-offs: Commercial and industrial (7) (364) (52) (449) (97) Commercial real estate - - (38) - (194) Residential real estate - (6) (26) (107) (182) Consumer installment (38) (38) (52) (40) (67) Total charge -offs (45) (408) (168) (596) (540) Recoveries: Commercial and industrial Construction and land development - - - 1,212 Commercial real estate - - - Residential real estate Consumer installment Total recoveries 1,010 1,379 Net recoveries (charge-offs) (154) Provision for loan losses 1,100 (250) - (300) (485) Ending balance $ 5,618 4,386 4,790 4,757 4,643 as a % of loans 1.22 % 0.95 1.00 1.05 1.08 as a % of nonperforming loans 1,052 % 2,345 2,691 Net (recoveries) charge-offs as % of average loans (0.03) % 0.03 (0.01) (0.09) (0.19) Nonperforming assets: Nonaccrual/nonperforming loans $ 2,972 2,370 Other real estate owned - - - Total nonperforming assets $ 2,972 2,522 as a % of loans and other real estate owned 0.12 % 0.04 0.07 0.66 0.59 as a % total assets 0.06 % 0.02 0.04 0.35 0.30 Nonperforming loans as a % of total loans 0.12 % 0.04 0.04 0.66 0.55 Accruing loans 90 days or more past due $ - - - - Table 8 - Allocation of Allowance for Loan Losses December 31 (Dollars in thousands) Amount %* Amount %* Amount %* Amount %* Amount %* Commercial and industrial $ 17.9 $ 12.3 $ 13.3 $ 13.0 $ 11.6 Construction and land development 7.2 7.1 8.4 8.7 9.7 Commercial real estate 3,169 55.2 2,289 58.6 2,218 54.9 2,126 52.7 2,071 51.0 Residential real estate 18.2 20.1 21.5 1,071 23.5 1,107 25.7 Consumer installment 1.5 1.9 1.9 2.1 2.0 Total allowance for loan losses $ 5,618 $ 4,386 $ 4,790 $ 4,757 $ 4,643 * Loan balance in each category expressed as a percentage of total loans. |
Greenville, South Carolina March 9, 2021 AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31 (Dollars in thousands, except share data) Assets: Cash and due from banks $ 14,868 $ 15,172 Federal funds sold 28,557 25,944 Interest bearing bank deposits 69,150 51,327 Cash and cash equivalents 112,575 92,443 Securities available-for-sale 335,177 235,902 Loans held for sale 3,418 2,202 Loans, net of unearned income 461,700 460,901 Allowance for loan losses (5,618) (4,386) Loans, net 456,082 456,515 Premises and equipment, net 22,193 14,743 Bank-owned life insurance 19,232 19,202 Other assets 7,920 6,872 Total assets $ 956,597 $ 827,879 Liabilities: Deposits: Noninterest-bearing $ 245,398 $ 196,218 Interest-bearing 594,394 527,934 Total deposits 839,792 724,152 Federal funds purchased and securities sold under agreements to repurchase 2,392 1,069 Accrued expenses and other liabilities 6,723 4,330 Total liabilities 848,907 729,551 Stockholders' equity: Preferred stock of $ 0.01 par value; authorized 200,000 shares; issued shares - none - - Common stock of $ 0.01 par value; authorized 8,500,000 shares; issued 3,957,135 shares Additional paid-in capital 3,789 3,784 Retained earnings 105,617 101,801 Accumulated other comprehensive income, net 7,599 2,059 Less treasury stock, at cost - 390,859 shares and 390,989 shares at December 31, 2020 and 2019, respectively (9,354) (9,355) Total stockholders’ equity 107,690 98,328 Total liabilities and stockholders’ equity $ 956,597 $ 827,879 See accompanying notes to consolidated financial statements AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Earnings Year ended December 31 (Dollars in thousands, except share and per share data) Interest income: Loans, including fees $ 22,055 $ 22,930 Securities: Taxable 3,932 4,000 Tax-exempt 1,851 2,099 Federal funds sold and interest bearing bank deposits 1,218 Total interest income 28,194 30,247 Interest expense: Deposits 3,847 4,176 Short-term borrowings Total interest expense 3,856 4,183 Net interest income 24,338 26,064 Provision for loan losses 1,100 (250) Net interest income after provision for loan losses 23,238 26,314 Noninterest income: Service charges on deposit accounts Mortgage lending 2,319 Bank-owned life insurance Gain from loan guarantee program - 1,717 Other 1,644 1,880 Securities gains (losses), net (123) Total noninterest income 5,375 5,494 Noninterest expense: Salaries and benefits 11,316 11,931 Net occupancy and equipment 2,511 1,907 Professional fees 1,052 1,014 FDIC and other regulatory assessments Other 4,419 4,664 Total noninterest expense 19,554 19,697 Earnings before income taxes 9,059 12,111 Income tax expense 1,605 2,370 Net earnings $ 7,454 $ 9,741 Net earnings per share: Basic and diluted $ 2.09 $ 2.72 Weighted average shares outstanding: Basic and diluted 3,566,207 3,581,476 See accompanying notes to consolidated financial statements AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income Year ended December 31 (Dollars in thousands) Net earnings $ 7,454 $ 9,741 Other comprehensive income, net of tax: Unrealized net holding gain on securities 5,617 5,730 Reclassification adjustment for net (gain) loss on securities recognized in net earnings (77) Other comprehensive income 5,540 5,822 Comprehensive income $ 12,994 $ 15,563 See accompanying notes to consolidated financial statements AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders’ Equity Accumulated Common Additional other Shares Common paid-in Retained comprehensive Treasury (Dollars in thousands, except share data) Outstanding Stock capital earnings (loss) income stock Total Balance, December 31, 2018 3,643,868 $ 3,779 95,635 (3,763) (6,635) $ 89,055 Net earnings - - - 9,741 - - 9,741 Other comprehensive income - - - - 5,822 - 5,822 Cash dividends paid ($ 1.00 per share) - - - (3,575) - - (3,575) Stock repurchases (77,907) - - - - (2,721) (2,721) Sale of treasury stock - - - Balance, December 31, 2019 3,566,146 $ $ 3,784 $ 101,801 $ 2,059 $ (9,355) $ 98,328 Net earnings - - - 7,454 - - 7,454 Other comprehensive income - - - - 5,540 - 5,540 Cash dividends paid ($ 0.96 per share) - - - (3,638) - - (3,638) Sale of treasury stock - - - Balance, December 31, 2020 3,566,276 $ $ 3,789 $ 105,617 $ 7,599 $ (9,354) $ 107,690 See accompanying notes to consolidated financial statements AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Year ended December 31 (In thousands) Cash flows from operating activities: Net earnings $ 7,454 $ 9,741 Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for loan losses 1,100 (250) Depreciation and amortization 1,666 1,157 Premium amortization and discount accretion, net 2,862 1,853 Deferred tax benefit (330) (153) Net (gain) loss on securities available for sale (103) Net gain on sale of loans held for sale (2,300) (545) Net gain on other real estate owned (52) (59) Loans originated for sale (82,726) (30,407) Proceeds from sale of loans 83,138 28,892 Increase in cash surrender value of bank owned life insurance (442) (437) Income recognized from death benefit on bank-owned life insurance (282) - Net increase in other assets (2,656) (872) Net increase in accrued expenses and other liabilities 2,399 1,807 Net cash provided by operating activities $ 9,728 $ 10,850 Cash flows from investing activities: Proceeds from sales of securities available-for-sale 21,029 36,462 Proceeds from maturities of securities available-for-sale 62,021 55,078 Purchase of securities available-for-sale (177,686) (81,843) (Increase) decrease in loans, net (766) 15,771 Net purchases of premises and equipment (8,355) (1,809) (Increase) decrease in FHLB stock (9) Proceeds from bank-owned life insurance death benefit - Proceeds from sale of other real estate owned Net cash (used in) provided by investing activities $ (102,921) $ 24,085 Cash flows from financing activities: Net increase (decrease) in noninterest-bearing deposits 49,180 (5,430) Net increase in interest-bearing deposits 66,460 5,389 Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase 1,323 (1,231) Stock repurchases - (2,721) Dividends paid (3,638) (3,575) Net cash provided by (used in) financing activities $ 113,325 $ (7,568) Net change in cash and cash equivalents $ 20,132 $ 27,367 Cash and cash equivalents at beginning of period 92,443 65,076 Cash and cash equivalents at end of period $ 112,575 $ 92,443 Supplemental disclosures of cash flow information: Cash paid (received) during the period for: Interest $ 4,055 $ 4,092 Income taxes 2,295 Gain from loan guarantee program - (1,717) Supplemental disclosure of non-cash transactions: Initial recognition of operating lease right of use assets $ - $ Initial recognition of operating lease liabilities - Real estate acquired through foreclosure See accompanying notes to consolidated financial statements AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Auburn National Bancorporation, Inc. (the “Company”) is a bank holding company whose primary business is conducted by its wholly-owned subsidiary, AuburnBank (the “Bank”). |
In determining whether a loss is temporary, the Company considers all relevant information including: ● the length of time and the extent to which the fair value has been less than the amortized cost basis; ● adverse conditions specifically related to the security, an industry, or a geographic area (for example, changes in the financial condition of the issuer of the security, or in the case of an asset-backed debt security, in the financial condition of the underlying loan obligors, including changes in technology or the discontinuance of a segment of the business that may affect the future earnings potential of the issuer or underlying loan obligors of the security or changes in the quality of the credit enhancement); ● the historical and implied volatility of the fair value of the security; ● the payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future; ● failure of the issuer of the security to make scheduled interest or principal payments; ● any changes to the rating of the security by a rating agency; and ● recoveries or additional declines in fair value subsequent to the balance sheet date. |
Accruing Accruing Total 30-89 Days Greater than Accruing Non- Total (In thousands) Current Past Due 90 days Loans Accrual Loans December 31, 2020: Commercial and industrial $ 82,355 - 82,585 - $ 82,585 Construction and land development 33,453 - 33,514 - 33,514 Commercial real estate: Owner occupied 54,033 - - 54,033 - 54,033 Hotel/motel 42,900 - - 42,900 - 42,900 Multifamily 40,203 - - 40,203 - 40,203 Other 117,759 - 117,788 118,000 Total commercial real estate 254,895 - 254,924 255,136 Residential real estate: Consumer mortgage 33,169 1,503 34,812 35,027 Investment property 49,014 - 49,020 49,127 Total residential real estate 82,183 1,509 83,832 84,154 Consumer installment 7,069 7,099 - 7,099 Total $ 459,955 1,858 461,954 $ 462,488 December 31, 2019: Commercial and industrial $ 56,758 - 56,782 - $ 56,782 Construction and land development 32,385 - 32,841 - 32,841 Commercial real estate: Owner occupied 48,860 - - 48,860 - 48,860 Hotel/motel 43,719 - - 43,719 - 43,719 Multifamily 44,839 - - 44,839 - 44,839 Other 132,900 - - 132,900 - 132,900 Total commercial real estate 270,318 - - 270,318 - 270,318 Residential real estate: Consumer mortgage 47,151 1,585 - 48,736 48,923 Investment property 43,629 - 43,652 - 43,652 Total residential real estate 90,780 1,608 - 92,388 92,575 Consumer installment 8,802 - 8,866 - 8,866 Total $ 459,043 2,152 - 461,195 $ 461,382 The gross interest income which would have been recorded under the original terms of those nonaccrual loans had they been accruing interest, amounted to approximately $ thousand and $ thousand for the years ended December 31, 2020 and 2019, respectively. |
(In thousands) Pass Special Mention Substandard Accruing Nonaccrual Total loans December 31, 2020 Commercial and industrial $ 79,984 2,383 - $ 82,585 Construction and land development 33,260 - - 33,514 Commercial real estate: Owner occupied 51,265 2,627 - 54,033 Hotel/motel 35,084 7,816 - - 42,900 Multifamily 36,673 3,530 - - 40,203 Other 116,498 1,243 118,000 Total commercial real estate 239,520 15,216 255,136 Residential real estate: Consumer mortgage 32,518 1,897 35,027 Investment property 48,501 49,127 Total residential real estate 81,019 2,229 84,154 Consumer installment 7,069 - 7,099 Total $ 440,852 18,190 2,912 $ 462,488 December 31, 2019 Commercial and industrial $ 54,340 2,176 - $ 56,782 Construction and land development 31,798 - 1,043 - 32,841 Commercial real estate: Owner occupied 47,865 - 48,860 Hotel/motel 43,719 - - - 43,719 Multifamily 44,839 - - - 44,839 Other 132,030 - 132,900 Total commercial real estate 268,453 1,766 - 270,318 Residential real estate: Consumer mortgage 45,247 2,527 48,923 Investment property 42,331 - 43,652 Total residential real estate 87,578 1,911 2,899 92,575 Consumer installment 8,742 - 8,866 Total $ 450,911 5,913 4,371 $ 461,382 During the fourth quarter of 2019, the Company recognized a gain of $1.7 million resulting from the termination of a Loan Guarantee Program (the “Program”) operated by the State of Alabama. |
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