Pay cut in exchange for stock options deal at struggling Bethesda biotech - 16 Apr 2009

The employees of one small Bethesda pharmaceutical company are taking a big salary hit to help see it through tough times.

In exchange for accepting a 35 percent pay cut, virtually all
executives and other staff at RegeneRx Biopharmaceuticals will receive
options to purchase a total of 698,138 shares of RegeneRx common stock
at 57 cents per share. Non-employee directors are also included in the
pay cuts and stock option deal. Shares were trading at 66 cents
Thursday.

All told, as a result of the stock options, the company expects to
incur a non-cash expense of about $89,000 in each of the final three
quarters. The company has nine full-time and two part-time employees,
according to its annual report, filed Wednesday.

The company — which is developing treatments to repair skin, eye and
cardiovascular tissue, plus a drug for cystic fibrosis — also said it
is raising $600,000 in a stock sale to an affiliate of its largest
shareholder, Sigma-Tau Group. RegeneRx also agreed to issue to the
purchaser warrants to purchase 263,158 additional shares of its common
stock.

"I am pleased our employees agreed to reduce their salaries and that
one of our affiliate stockholders is willing to make an investment of
its capital during this difficult economic period, as well as our
non-employee directors' decision to similarly reduce their cash
compensation," said J.J. Finkelstein, president and CEO, in a statement.

"We have a strong team and it is during times like these that their
commitment is especially recognized," Finkelstein said. "Our cost
cutting measures, along with our existing capital and proceeds from the
Offering, should be sufficient to allow us to

more: Salary Replaced by Equity Compensation.

Posted by Dan Walter

Performensation: Equity Compensation for High Performance Companies.