MNKD 2018 Proxy Statement

(3) Per SEC rules, the intrinsic value of accelerated unvested stock options shown in the table above was calculated using the closing price of our common stock of $2.32 on December 31, 2017. The intrinsic value is the aggregate spread between $2.32 and the exercise price of the accelerated options, if less than $2.32. Accelerated options with exercise prices equal or greater than $2.32 have no intrinsic value. Each of the named executive officer also has an extended exercise period ending on the earlier of 18 months following the triggering event or the end of the original term of the option. There is no fair value calculated for this extended exercise period. (4) Represents estimated current value of payments and benefits payable upon termination without cause or resignation for good reason following a change of control. The terms of change of control agreements with our named executive officers are detailed under the heading “Change of Control Agreements” below. Executive Severance Agreements We have entered into an executive severance agreement with Mr. Thomson. This agreement is for a period of two years and will be automatically renewed for additional one-year periods unless either party gives notice to terminate the agreement at least 90 days prior to the end of its initial term or any subsequent term. The agreement provides that Mr. Thomson is an “at will” employee and that his employment with us may be terminated at any time by him or by us. Under the agreement, in the event we terminate Mr. Thomson’s employment without cause (as defined below) or he terminates his employment with us for good reason (as defined below), then he is generally entitled to receive the following: • the portion of his annual base salary earned through the termination date that was not paid prior to his termination, if any; • any compensation previously deferred by him and any accrued paid time-off to which he is entitled under our policy; • on the condition he executes and does not revoke a general release and settlement agreement, or release, in favor of us, then he will become entitled to receive: • his annual base salary on the date of termination for a period of 18 months following his termination, subject to certain limitations; • an amount equal to the average annual bonus received by him for the three years prior to his termination (or the prior period up to three years during which he was one of our executive officers and received a bonus); • in the event he met the performance criteria for earning an annual bonus prior to his termination, a portion of the annual bonus earned for the year based on the number of days worked during the year; • in the event that he did not meet the performance criteria for earning an annual bonus prior to his termination, but the Board determines that all such criteria could have been satisfied if he remained employed for the full fiscal year, then a portion of his average annual bonus for the three years prior to his termination, based on the number of days worked during the year; and • health insurance and, under certain circumstances, life, disability and other insurance benefits for a period expiring on the earlier of 18 months following his termination or until he qualifies for related benefits from another employer. In addition, the executive severance agreements provide that, on the condition that Mr. Thomson executes and does not revoke a release, each vested stock option held by him on the date of termination will be exercisable for a period ending on the earlier of 18 months following that date or the end of the original term of the option. Under his agreement, Mr. Thomson may be terminated for cause if he, among other things: • refuses to carry out or satisfactorily perform any of his lawful duties or any lawful instruction of our Board of Directors or senior management; 63