MNKD 2018 Proxy Statement

77,060 shares; Kent Kresa, 61,380 shares; David H. MacCallum, 68,541 shares; Henry L. Nordhoff, 68,541 shares; and James Shannon 50,282 shares. (2) These amounts reflect the grant date fair value of all restricted stock awards to non-employee directors in 2017. Restricted stock units are valued based on the market price on the grant date. Reference Note 13 “Stock award plans” in the notes to our financial statements for the period ended December 31, 2017, included in Part IV of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 27, 2018, which identifies the assumptions made in the valuation of restricted stock awards. Restricted stock awards granted to non-employee directors vest annually over a period of three years. As of December 31, 2017, our non-employee directors had restricted stock grants outstanding to receive 154,159 shares of our common stock as follows: Ronald J. Consiglio, 32,259 shares; Michael A. Friedman, M.D. 4,031 shares; Kent Kresa, 36,395 shares; David H. MacCallum, 25,285 shares; Henry L. Nordhoff, 25,783 shares; and James Shannon 18,406 shares. For 2017, Mr. Consiglio, Mr. Nordhoff and Dr. Friedman elected to receive their annual retainer in cash. Non-Employee Director Compensation Program Pursuant to our non-employee director compensation program (the “director compensation plan”) in effect in 2017, each of our non-employee directors receives an annual retainer of $50,000 for service on the Board of Directors. The chair of the Nominating and Corporate Governance Committee receives, in addition to the annual retainer, a retainer of $5,000 per year for his or her service as the Nominating and Corporate Governance Committee chair and non-chair Nominating and Corporate Governance Committee members receive an additional retainer of $5,000 per year. The chair of the Compensation Committee receives, in addition to the annual retainer, a retainer of $12,500 per year for his or her service as the Compensation Committee chair and non-chair Compensation Committee members receive an additional retainer of $7,500 per year. The chair of the Audit Committee receives, in addition to the annual retainer, a retainer of $15,000 per year for his or her service as the Audit Committee chair and non-chair Audit Committee members receive an additional retainer of $10,000 per year. Our non-employee directors do not receive fees for attending Board or committee meetings. Additionally, the Chairman receives an additional annual retainer of $32,500. As of a result of Mr. Kresa’s appointment to the position of Chairman of the Board in February 2016, we do not currently have a lead independent director and expect to keep the lead independent director position vacant for so long as the Chairman and Chief Executive Officer positions continue to be occupied by separate individuals. The members of the Board of Directors are also eligible for reimbursement for their expenses incurred in attending Board of Directors meetings in accordance with Company policy. Non-employee directors have an option to receive their annual retainer in cash or common stock of the Company. If a non-employee director elects to receive his annual retainer in common stock, two awards of restricted stock units will be granted. One of these awards will consist of that number of shares that equals 100% of the annual retainer, based on the closing price on the day immediately prior to the grant date. This award will vest (i.e., the shares will be delivered) on the earliest to occur of (i) the retirement or removal of the non-employee director from the Board of Directors; (ii) his or her death; or (iii) five years from the grant date. The other award will consist of that number of shares that equals 15% of the annual retainer, based on the same closing price. This award will vest upon the earliest to occur of (i) the retirement or removal of the non-employee director from the Board of Directors, provided that such retirement or removal occurs more than one year after the grant date; (ii) his or her death; or (iii) five years from the grant date. Non-employee directors who elect not to participate in this program will receive the full annual retainer shortly after the date of the stockholder meeting. Each non-employee director of the Company also receives annual equity awards under the 2013 Plan. Only non-employee directors of the Company or an affiliate of such directors (as defined in the Code) are eligible to receive equity awards pursuant to the director compensation program. Options granted under the 2013 Plan pursuant to the director compensation program are intended by the Company not to qualify as incentive stock options under the Code. 45