MNKD 2018 Proxy Statement

• violates any local, state or federal law involving the commission of a crime other than a minor traffic offense; • is grossly negligent, engages in willful misconduct or breaches a fiduciary obligation to us; • engages in any act that materially compromises his reputation or ability to represent us with investors, customers or the public; or • reaches a mandatory retirement age established by us. Under Mr. Thomson’s agreement, good reason includes, among other things: • a reduction of his annual base salary to a level below his salary as of October 10, 2007; • a material diminution in his position, authority, duties or responsibilities with us, subject to certain limitations; • an order by us to relocate him to an office located more than 50 miles from his current residence and worksite; • any non-renewal of the executive severance agreement by us, on the condition that he may terminate the agreement for good reason only during the 30-day period after he receives notice from us that we intend to terminate the agreement; and • any material violation of the executive severance agreement by us. Under Mr. Thomson’s agreement, he must inform us if he intends to terminate his agreement for good reason. We have 30 days from the date we receive notice of his intent to terminate the agreement for good reason to cure the default. In addition, on October 24, 2017, the Company entered into a transition and separation agreement (the “Transition Agreement”) with Matthew J. Pfeffer, the Company’s former Chief Executive Officer and Chief Financial Officer, regarding the terms of Mr. Pfeffer’s transition and separation from the Company. Pursuant to the Transition Agreement, Mr. Pfeffer provided the Company with a general release of claims and will remain employed with the Company to provide transition and other services through February 1, 2019, subject to his earlier resignation or termination by the Company. Mr. Pfeffer reports to the Company’s principal executive officer during the term of the Transition Agreement, serving in a non-executive capacity. During the term of the Transition Agreement, and in lieu of any severance benefits Mr. Pfeffer may have been entitled to receive pursuant to the terms of his Executive Severance Agreement or Change of Control Agreement with the Company, Mr. Pfeffer will be entitled to receive his current annual base salary of $490,350. Pursuant to the Transition Agreement, Mr. Pfeffer was eligible to receive an annual bonus for 2017 pursuant to the standard bonus compensation structure applicable to the Company’s executive officers, and accordingly received a bonus for 2017 of $79,615. If Mr. Pfeffer remains employed with the Company through February 1, 2019, remains in compliance with the Transition Agreement and all Company policies, and provides the Company with an effective general release of claims within 21 days after that date, the Company will pay Mr. Pfeffer a severance payment in the amount of $345,000. Change of Control Agreements We have entered into change of control agreements with each named executive officer. Each 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. Under the agreements, a change of control will be deemed to occur upon: • any transaction that results in a person or group acquiring beneficial ownership of 50% or more of our voting stock, other than us or one of our employee benefit plans; 64