TABLE OF CONTENTS
Compensation Discussion and Analysis
Executive Summary
The following compensation discussion and analysis describes the material elements of compensation earned in fiscal 2015 by each of the current or former executive officers identified below in the Summary Compensation Table who are referred to collectively as our “Named Executive Officers.” Our Named Executive Officers with respectThe following table sets forth the compensation paid by us during the years ended December 31, 2021 and 2020 to the fiscal year that ended on December 31, 2015 were Richard W. Pascoe, Chief Executive Officer, Secretary and Director, Barbara Troupin, M.D., M.B.A., Senior Vice President, Chief Medical Officer, and Brian T. Dorsey, Senior Vice President, Chief Development Officer.
Objectives of Our Executive Compensation Program
The Compensation Committee believes that executive compensation should be directly linked both to corporate performance and the achievement of objectives that are designed to increase stockholder value. In furtherance of this goal, the Compensation Committee has established the following objectivespersons who served as a foundation for compensation decisions:
| |
• | provide a competitive total compensation package that generally targets the 50th percentile among our peer companies;
|
attract and retain highly qualified executives with the skills and experience required for the achievement of our business goals;
align compensation elements with the Company’s annual goals and long-term business strategies and objectives;
promote the achievement of key strategic and financial performance measures by linking short-term and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals; and
align executives’ incentives and rewards with the creation of stockholder value.
The Compensation Committee has historically focused on compensating executive officers, including Named Executive Officers, with three compensation components: base salary, annual cash incentives and equity-based compensation. The Compensation Committee believes that cash compensation in the form of base salary and an annual cash incentive provides our executives with short-term rewards for success in annual operations, and that long-term compensation through the award of stock options and other equity awards aligns the long term corporate performance objectives of management with those of our stockholders.
2015 Corporate Performance
Our Company’s 2015 accomplishments, guided by our Named Executive Officers (as defined below), included, among other things, the following:
initiated and completed enrollment in its fispemifene Phase 2b clinical trial for the treatment of symptomatic male secondary hypogonadism;
according to IMS Midas, over 633,000 Vitaros® units sold in Europe in 2015 through November;
Vitaros® monthly sales in Europe tracked on a 111,000 monthly unit run rate, which is expected to grow in both existing markets and new markets with additional launches throughout 2016 by our commercialization partners;
completed and reported top-line data on the Phase 2a clinical trial of RayVa for Raynaud's Phenomenon secondary to scleroderma;
licensed the U.S. development and commercialization rights for Vitaros from Allergan plc; and
expanded Vitaros partnerships to include parts of Asia, Eastern Europe and Latin America.
2015 Compensation Programs and Decisions
In line with our executive compensation program’s emphasis on pay for performance, compensation awarded to our Named Executive Officers for 2015 reflected our corporate results and overall compensation philosophy:
Cash Compensation at or Below Median Level of Peers: The increases to our Named Executive Officers’ base salaries during 2015 were modest, and our Named Executive Officers’ target cash compensation remained at or below the median level relative to our peer group of companies, with base salaries remaining below the median.
Pay-for-Performance Annual Incentives: For 2015, our Company focused on certain key business development objectives and objectives related to the optimization of the Vitaros business, business development and operational goals. Our compensation program for 2015 was designed to support the Company’s focus on these areas and together
achievement in these areas represented 100% of our Named Executive Officers’ total bonus opportunity. Based on corporate performance in these areas during 2015, as summarized above, our Compensation Committee determined that our executive officers should be paid their bonuses at 75% of the targeted levels. In addition, our Compensation Committee determined that one-half of each of our during fiscal year 2021 (the “Named Executive Officer’s bonus would be paid in the form of restricted stock units (“RSUs”Officers”), which will vest in February 2017, subject to the Named Executive Officer’s continued employment through such date. The annual bonuses awarded to our Named Executive Officers for 2015 are discussed below under “Annual Cash Incentive.”:
Continued Use of Performance-Based Stock Options Granted in 2015: Our Compensation Committee continued its practice of ensuring that a substantial portion of our Named Executive Officers’ total compensation is awarded in the form of long-term equity incentive awards. As in years past, the annual award was granted in the form of stock options, which are inherently performance-based as they provide value to our executives only if our stock price increases. For 2015, the Compensation Committee also granted a portion of the annual award in the form of performance-based stock options to Messrs. Pascoe, Martin and Cox, the vesting of which is tied to the achievement of key clinical objectives. The long-term equity incentive awards granted to our Named Executive Officers during 2015 are discussed below under “Equity Compensation.”
In light of the Company’s overall performance during 2015, the Compensation Committee believes that the Named Executive Officers’ 2015 compensation was appropriate.
Executive Compensation Best Practices
We regularly review and refine our executive compensation program to ensure that it continues to reflect practices and policies that are aligned with our pay-for-performance philosophy. The following practices and policies we believe are in line with current best practices for aligning executive and shareholder interests and sound corporate governance practices:
Raj Mehra, Ph.D.,
Chairman, Chief Executive Officer, President
| | | 2021 | | | $522,500 | | | $100,000 | | | $10,344,000(4) | | | $4,360,685 | | | $287,375 | | | $11,242 | | | $15,625,802 |
| 2020 | | | $475,000 | | | — | | | — | | | $3,502,863 | | | $237,500 | | | $11,734 | | | $4,227,097 |
Michael Golembiewski
Chief Financial Officer(1)
| | | 2021 | | | $281,667 | | | $25,000 | | | — | | | $720,461 | | | $97,350 | | | $12,917 | | | $1,137,395 |
|
(1)
| | |
Compensation Practice | Apricus Policy |
Pay for Performance | YES | We link pay to performance and stockholder interests by heavily weighting total target direct compensation to the achievement of strong stock price performance and a balanced mix of performance metrics established in advance by our Compensation Committee. |
Annual “Say on Pay” Vote | YES | We seek an annual non-binding advisory vote from our shareholders to approve the executive compensation programs disclosed in our Compensation Discussion and Analysis, tabular disclosure and related narrative in our proxy statement. |
Independent Compensation Consultant | YES | The Compensation Committee retains an independent compensation consultant. |
Annual Compensation Risk Assessment | YES | Each year we perform an assessment of any risks that could result from our compensation plans and programs. |
Limited Perquisites | YES | We provided very limited perquisitesIn connection with Mr. Golembiewski’s promotion to our Chief Financial Officer effective September 1, 2021, his base salary was increased from $275,000 to $295,000. In accordance with SEC guidance, compensation information for Mr. Golembiewski for fiscal year 2020 has not been included in this table because Mr. Golembiewski was not a named executive officer for fiscal year 2020. |
(2)
| Represents the grant date fair value of the option awards, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, excluding the effect of estimated forfeitures. These figures do not reflect the amortized compensation expense or value received by the officer in the year indicated or that may be received by the officer with respect to such equity awards. |
(3)
| Our Named Executive OfficersOfficers’ All Other Compensation in 2015. |
Guaranteed Base Salary Increases or Bonuses | NO | We do not guarantee base salary increases or provided guaranteed minimum annual bonuses. |
Tax Gross-ups | NO | We do not provide tax gross ups2020 and 2021 consist of our matching and profit-sharing contribution to our executives for “excess parachute payments.” |
Repricing or Exchange of Underwater Stock Options | NO | We prohibit option repricing without stockholder approval. |
Single Trigger Change in Control Severance | NO | We do not allow for single-trigger payment of cash severance benefits upon a change in control. Rather, we require double-trigger (or both a change in control and termination of executive’s employment) before any cash severance benefits are paid.retirement savings plan (401(k) Plan). |
Roles in Determining Compensation
Compensation Committee
The Board has delegated to the Compensation Committee the responsibility to ensure that total compensation paid to our executive officers, including the Named Executive Officers, is consistent with our compensation policy and objectives.
The Compensation Committee draws on a number of resources, including input from executive officers, including the Chief Executive Officer, its independent compensation consultant and review of data on peer companies, to make decisions regarding the Company’s executive compensation program. The Compensation Committee retains discretion over base salary, annual cash bonus, equity compensation and other compensation considerations. The Compensation Committee relies upon the judgment of
its members in making compensation decisions, after reviewing the performance of the Company and carefully evaluating an executive’s performance during the year against established goals, operational performance and business responsibilities. In addition, the Compensation Committee incorporates judgment in the assessment process to respond to and adjust for the evolving business environment.
In the first quarter of each year, the Compensation Committee reviews the performance of each of our Named Executive Officers during the previous year. At this time the Compensation Committee also reviews our performance relative to the corporate performance objectives set by the Board for the year under review and makes the final annual incentive payment determinations based on our performance and the Compensation Committee’s evaluation of each Named Executive Officer’s performance for the year under review, if applicable. In connection with this review, the Compensation Committee also reviews and adjusts, as appropriate, annual base salaries for our Named Executive Officers and grants, as appropriate, additional stock option awards to our Named Executive Officers and certain other eligible employees for the then-current fiscal year.
During the fourth quarter of each year our Compensation Committee also reviews the corporate performance objectives for purposes of our annual incentive program for the following year, with such objectives historically being recommended to the full Board for approval. Our Chief Executive Officer, with the assistance and support of our human resources department, aids the Compensation Committee by providing annual recommendations regarding the compensation of all of our Named Executive Officers, other than himself. The Compensation Committee also, on occasion, meets with our Chief Executive Officer to obtain recommendations with respect to our compensation programs and practices generally. The Compensation Committee considers, but is not bound to accept, the Chief Executive Officer’s recommendations with respect to Named Executive Officer compensation. In the beginning of each year, our Named Executive Officers work with our Chief Executive Officer to establish their individual performance goals for the year, if applicable, based on their respective roles within the Company.
Chief Executive Officer
The Chief Executive Officer attends Compensation Committee meetings and works with the Compensation Committee Chair and the compensation consultant to (1) establish individual and Company performance goals for executive officers, excluding the Chief Executive Officer, at the beginning of each year and (2) develop compensation recommendations for executive officers, excluding the Chief Executive Officer, based upon individual and Company performance goals for the current year and individual merit. The Chief Executive Officer’s recommendations are then submitted to the Compensation Committee for review and consideration without the Chief Executive Officer present. The Chief Executive Officer is not present for deliberations and decisions made regarding his compensation.
Compensation Consultant
For 2015 the Compensation Committee retained the services of an external compensation consultant, Radford. The mandate of the consultant was to assist the Compensation Committee in its review of executive and director compensation practices, including the competitiveness of pay levels, executive compensation design and benchmarking with the Company’s peers in the industry. The Compensation Committee, after a review of the factors set forth in Section 10C-1 of the Exchange Act, determined that there was no conflict of interest in retaining Radford during 2015. Radford has not provided any other services to us during 2015 beyond their engagement as an advisor to the Compensation Committee.
Competitive Market Benchmarking
For purposes of setting 2015 executive compensation, the Compensation Committee worked with Radford to establish a list of peer companies for purposes of benchmarking our compensation practices. While, in general, the Compensation Committee strives to set target total target compensation for our Named Executive Officers to be at the 50th percentile among our peer group, the Compensation Committee does not establish compensation levels solely based on benchmarking. Instead, our Compensation Committee relies upon the judgment of its members in making compensation decisions, after reviewing our performance and carefully evaluating a Named Executive Officer’s performance during the year against established goals, leadership qualities, operational performance, business responsibilities, career with our company, current compensation arrangements and long-term potential to enhance stockholder value.
In addition, the Compensation Committee refers to compensation information for comparable companies in making its executive compensation decisions. The peer companies used in determining compensation actions in the 2015 fiscal year were selected by the Compensation Committee with input from Radford on the basis of their similarity to us in terms of competition for talent, phase of development or stage of commercialization (target range for peer group of Phase I, II, III lead candidate or later, including marketed drugs), market capitalization (less than $300 million), minimal product revenues and number of employees (less than 100). As of January 2015, we ranked at the 70th percentile of our 2015 peer group with respect to revenues and the 30th percentile of our 2015 peer group with respect to market capitalization.
The list of peer companies used in determining compensation actions in 2015 consisted of the following 21 publicly-traded companies in the pharmaceutical and biotechnology industries:
|
(4)
| | | | | | |
l | | Adamis Pharmaceuticals | | l | | MediciNova |
l | | Alexza Pharmaceuticals | | l | | MEI Pharma |
l | | Celladon | | l | | Ocera Therapeutics |
l | | CEL-SCI | | l | | Pain Therapeutics |
l | | ChemoCentryx | | l | | Repros Therapeutics |
l | | Cytokinetics | | l | | Sophiris Bio |
l | | Evoke Pharma | | l | | Stemline Therapeutics |
l | | Fate Therapeutics | | l | | Sunesis Pharmaceuticals |
l | | KaloBios Pharmaceuticals | | l | | Threshold Pharmaceuticals |
l | | Lipocine | | l | | Vical |
l | | Mast Therapeutics | | | | Represents the grant date fair value of a performance restricted stock unit award granted to Dr. Mehra on March 15, 2021, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. This figure does not reflect the amortized compensation expense or value received by Dr. Mehra in 2021 or that may be received by Dr. Mehra with respect to such award. On March 8, 2022, prior to its vesting, this award was voluntarily forfeited by Dr. Mehra and cancelled by the Company. |
We expect that theNarrative Disclosure to Summary Compensation Committee will continue to review comparable company data in connection with setting the compensation we offer our Named Executive Officers to help ensure that our compensation programs are competitive and fair. Table
We strive to achieve an appropriate mix between equity incentive awards and cash payments in order to meet our objectives. Any apportionment goal is not applied rigidly and does not control our compensation decisions, and our Compensation Committee does not have any formal policies for allocating compensation between long-term and short-term compensation or cash and non-cash compensation. Because we are an early stage company, we generally pay a higher portion of compensation in the form of equity. The compensation levels of the Named Executive Officers reflect to a significant degree the varying roles and responsibilities of such executives. As a result of the Compensation Committee’s and the Board’s assessment of our Chief Executive Officer’s significant role and responsibilities within our Company, there are significant compensation differentials between him and our other Named Executive Officers.
Implementation of Objectives
In fiscal 2015, our executive compensation program consisted of the following forms of compensation, each of which are described below in greater detail:
base salary;
annual cash incentive;
equity compensation; and
employee benefit program.
Base Salary
Overview
In general, base salaries for our Named Executive Officers are approved by the Compensation Committee and are initially established through arm’s length negotiation at the time the executive is hired, taking into account such executive’s qualifications, experience, prior salary and market pay levels. Base salaries of our Named Executive Officers are approved and reviewed annually by our Compensation Committee and adjustments to base salaries are based on the scope of an executive’s responsibilities, individual contribution, prior experience and sustained performance. Decisions regarding salary increases may take into account an executive officer’s current salary, equity ownership, and the amounts paid to an executive officer’s peers inside our companyCompany by conducting an internal analysis, which compares the pay of an executive officer to other members of the management team. Base salaries are also reviewed in the case of promotions or other significant changes in responsibility. Base salaries are not automatically increased if the Compensation Committee believes that other elements of the Named Executive Officer’sOfficers’ compensation are more appropriate in light of our stated objectives. This strategy is consistent with our intent of offering compensation that is both cost-effective, competitive and contingent on the achievement of performance objectives.
InEffective January 2015, the Compensation Committee approved a1, 2021, Dr. Mehra’s base salary increase forwas increased from $475,000 to $522,500. In connection with Mr. Pascoe of 7%Golembiewski’s promotion to the level shown in the table below. Thisour Chief Financial Officer, effective September 1, 2021, his base salary increase was intendedincreased from $275,000 to bring Mr. Pascoe’s base salary closer in line with the 50th percentile of our peer companies (although it remained below such level even after the increase) and to reward strong performance during 2014.
The base salaries for Dr. Troupin and Mr. Dorsey were set by the Compensation Committee in connection with their commencement of employment in December 2014 and are also below the 50th percentile of our peer companies.
On March 15, 2016, the Compensation Committee approved base salary increases for Mr. Pascoe, Dr. Troupin and Mr. Dorsey, effective April 1, 2016.The following table shows the 2015 salaries for our Named Executive Officers as well as the increased salaries for fiscal 2016:
|
| | | | | | | | | | |
| | | | Annual Base Salary |
Name | | Title | | 2016 | | 2015 |
Richard W. Pascoe | | Chief Executive Officer, Secretary and Director | | $ | 487,396 |
| | $ | 473,200 |
|
Barbara Troupin, M.D., M.B.A. | | Senior Vice President, Chief Medical Officer | | $ | 334,750 |
| | $ | 325,000 |
|
Brian T. Dorsey | | Senior Vice President, Chief Development Officer | | $ | 319,300 |
| | $ | 310,000 |
|
$295,000.Annual Cash Incentive
Overview
The CompanyWe also providesgenerally provide executive officers with annual performance-based cash bonuses, which are specifically designed to reward executives for our overall Company performance in a given year. Corporate goals are established by the Compensation Committee with input from senior management and approved by the full Board. The target annual cash bonus amounts relative to base salary vary depending on each executive’s accountability, scope of responsibilities and potential impact on the Company’s performance.
The Compensation Committee considers the Company’sour overall performance for the preceding fiscal year in deciding whether to award a bonus and, if one is to be awarded, the amount of the bonus. The annual cash bonus for each
TABLE OF CONTENTS
of termination, any unpaidhis earned annual bonus for the calendar year preceding his termination, to the extent that the criteria for the bonus has been met, the average of any bonus paid during each of the three most recent fiscal years prior to termination, full acceleration and vesting of his unvested equity awards, and reimbursement for the cost of continuation of health insurance benefits provided to him immediately prior to the termination (as provided under Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) or other applicable law) for 12 months.
If Mr. Pascoe’s employment is terminated in connection with his death or a permanent disability, Mr. Pascoe or his estate is entitled to a pro rata bonus for the calendar year in which suchthe termination occurs, equal tooccurs. Additionally, the bonus he would have received, to the extent all criteria for such a bonus have been met (with the exceptionvesting of the requirement that he be employed on the date the bonus is to be paid), for the calendar year of termination multiplied by a fraction, the numerator of which is the number of days in such year preceding and including the date of termination, and the denominator of which is 365. Such pro-rata bonus shall be paid at the same time as the bonus would have been paid had Mr. Pascoe remained employed by the Company through the date of payment, but in any event, not later than March 15 of the calendar year following the calendar year for which the bonus is payable. Mr. Pascoe is also entitled to receive any unpaid bonus for the calendar year preceding his termination, to the extent that all criteria for such bonus have been met (with the exception of the requirement that he be employed on the date the bonus is to be paid). Such bonus shall be paid at the same time as the bonus would have been paid had he remained employed by the Company through the date of payment. Additionally, all of his outstanding but unvested equity awards that are scheduled to vest solely subject to continued service or employment shall vest immediately and the expiration date for allaccelerate so that such equity awards shall be extended so that they expire one year after termination duevested to death or permanent disability.
In the event that Mr. Pascoe sufferssame extent as if Dr. Mehra had provided an involuntary termination within the 12-month period following the effective dateadditional 12 months of a change of control, then in addition to all salary and bonuses accrued as ofservice from the date of his termination hetermination. We will also be entitledeither continue to severance benefits. These include (i)provide Dr. Mehra and his dependents coverage under our group health plan at our sole expense or reimburse Dr. Mehra for such coverage for 12 months from the Company shalldate of termination.
The CEO Employment Agreement also provides that if Dr. Mehra experiences a Covered Termination during a Change in Control Period, we will pay to Mr. Pascoe in one lump sumDr. Mehra an amount equal to 1.5 times the greatersum of (A) 12 months ofhis annual base salary and the salary that he was receivingannual bonus earned by Dr. Mehra for the fiscal year immediately prior topreceding the fiscal year in which the termination or (B) 12 monthsoccurs, and a pro-rata portion of the salary that he was receiving immediately prior to the change of control; (ii) the Company shall pay to Mr. Pascoe in one lump sum (A) any unpaidhis earned annual bonus for the calendarfiscal year precedingin which the termination occurs. Additionally, the vesting of any outstanding equity awards that are scheduled to vest solely subject to continued service or employment shall accelerate so that such awards shall be fully vested. We will also either continue to provide Dr. Mehra and his termination, to the extent that all criteriadependents coverage under our group health plan at our sole expense or reimburse Dr. Mehra for such bonus have been met (with the exception of the requirement that he be employed on the date the bonus is to be paid), plus (B) 100% of the average bonus paid by the Company to himcoverage for services during each of the three most recent fiscal years (or such shorter period of time during which he was eligible for a bonus) prior to18 months from the date of the termination; (iii) full acceleration of the vesting of all equity awards held by Mr. Pascoe at the time of the termination, including any options, restricted stock, RSUs or other awards, and (iv) reimbursement for the cost of continuation of health insurance benefits provided to him immediately prior to the termination pursuant to the terms of COBRA or other applicable law for a period continuing until the earlier of 12 months following the termination or the date upon which he is no longer eligible for such COBRA or other benefits under applicable law. In addition, the performance-based stock options granted to Mr. Pascoe in February 2014 and 2015 will vest upon the occurrence of a change in control.termination.
If he is terminated for cause at any time or resigns under circumstances that do not constitute an involuntary termination, then Mr. Pascoe shall not be entitled to receive payment of any severance benefit or any continuation or acceleration of stock option vesting. He will receive payment for all salary accrued as of the date of termination of employment.
Barbara Troupin, M.D., M.B.A.Michael Golembiewski Employment Agreement
On December 12, 2014,January 16, 2019, we entered into an employment agreement with Barbara Troupin, M.D. On April 13, 2016, we entered into anMichael Golembiewski (the “Golembiewski Employment Agreement”), pursuant to which Mr. Golembiewski initially served as our Vice President of Finance. The agreement provides for “at-will” employment transition agreement with Dr. Troupin that superseded her employment agreement. The employment agreement provided that if Dr. Troupin’s employment ended due to an involuntary termination, as such term is defined in her employment agreement, she would have received, in a lump sum payment, 12 monthsand sets forth certain agreed upon terms and conditions of heremployment. Mr. Golembiewski’s initial annual base salary was $200,000 and he was eligible to receive an initial discretionary annual bonus in effect on the datean amount up to 30% of termination, any unpaid bonus for the calendar year preceding her termination, to the extent that the criteria for the bonus had been met, the average of any bonus paid during each of the three most recent fiscal years prior to termination (with any bonus for a partial year of employment annualized for such purpose), full acceleration and vesting of her unvested equity awards, and reimbursement for the cost of continuation of health insurance benefits provided to her immediately prior to the termination (as provided under COBRA or other applicable law) for 12 months.
The employment agreement provided that if Dr. Troupin’s employment was terminated inhis base salary. In connection with her death or a permanent disability, Dr. Troupin or her estate would have been entitledMr. Golembiewski’s promotion to a pro rata target bonus for the calendar year in which such termination occurs. Dr. Troupin would also have been entitledour Chief Financial Officer, effective September 1, 2021, his base salary was increased to receive any accrued but unpaid bonus for the calendar year preceding her termination,$295,000. Effective January 1, 2022, Mr. Golembiewski’s base salary was further increased to the extent that all criteria for such bonus had been met (with the exception of the requirement that she be employed on the date the bonus is to be paid). Such bonus amounts would have been paid in cash in a lump sum following the effectiveness of a general release of claims (or, in the event of her death, within five days following the date of death). Additionally, all of her outstanding but unvested equity awards would have vested immediately and the expiration date for all such equity awards would have been extended so that they expired one year after termination due to death or permanent disability.
Under the employment agreement, in the event that Dr. Troupin suffered an involuntary termination within the 12-month period following the effective date of a change of control, then in addition to all salary and bonuses accrued as of the date of her termination she would have also been entitled to severance benefits. These include (i) the Company would have paid to Dr. Troupin in one lump sum an amount equal to the greater of (A) 12 months of the salary that she was receiving immediately prior to the termination or (B) 12 months of the salary that she was receiving immediately prior to the change of control; (ii) the Company would have paid to Dr. Troupin in one lump sum (A) any unpaid bonus for the calendar year preceding her termination, to the extent that all criteria for such bonus had been met (with the exception of the requirement that she be employed on the date the bonus is to be paid), plus (B) 100% of the average bonus paid by the Company to her for services during each of the three most recent fiscal years (or such shorter period of time during which she was eligible for a bonus) prior to the date of the termination; (iii) full acceleration of the vesting of all equity awards held by Dr. Troupin at the time of the termination, including any options, restricted stock, RSUs or other awards, and (iv) reimbursement for the cost of continuation of health insurance benefits provided to her immediately prior to the termination pursuant to the terms of COBRA or other applicable law for a period continuing until the earlier of 12 months following the termination or the date upon which she is no longer eligible for such COBRA or other benefits under applicable law. In addition, the performance-based stock options granted to Dr. Troupin in February 2015 would have vested upon the occurrence of a change in control.
Under the employment agreement, if she was terminated for cause at any time or voluntarily resigns under circumstances that do not constitute an involuntary termination, then Dr. Troupin would not have been entitled to receive payment of any severance benefit or any continuation or acceleration of stock option vesting. She would have received payment for all salary accrued as of the date of termination of employment.$317,125.
Pursuant to the employment transition agreement, which superseded the employment agreement, Dr. Troupin’s employment with the Company will terminate effective as of May 31, 2016. Pursuant to the employment transition agreement, following her termination of employment and subject to her execution of a general release of claims, Dr. Troupin will be entitled to receive certain severance benefits, including the payment of her annual base salary, an amount equal to her annual bonus for 2015, six months of continued health benefits at Company expense, and full acceleration of all of her outstanding equity awards.
Brian T. Dorsey
On December 1, 2014, we entered into an employment agreement with Brian T. Dorsey. The agreement provides thatGolembiewski Employment Agreement, if Mr. Dorsey’s employment ends due to an involuntary termination, as such term is defined in his agreement, he would receive, in a lump sum payment, 12 months of his annual base salary in effect on the date of termination, any accrued but unpaid bonus for the calendar year preceding his termination (with any bonus for a partial year of employment annualized for such purpose), to the extent that the criteria for the bonus has been met, the average of any bonus paid during each of the three most recent fiscal years prior to termination, and full acceleration and vesting of his unvested equity awards, and reimbursement for the cost of continuation of health insurance benefits provided to him immediately prior to the termination (as provided under COBRA or other applicable law) for 12 months.
If Mr. Dorsey’s employmentGolembiewski is terminated in connection with his death or a permanent disability, Mr. Dorsey or his estate is entitled to a pro rata target bonus for the calendar year in which such termination occurs. Mr. Dorsey is also entitled to receive any accrued but unpaid bonus for the calendar year preceding his termination, to the extent that all criteria for such bonus have been met (with the exception of the requirement that he be employed on the date the bonus is to be paid). Such bonus amounts shall be paid in cash in a lump sum following the effectiveness of a general release of claims (or, in the event of his death, within five days following the date of death). Additionally, all of his outstanding but unvested equity awards shall vest immediately and the expiration date for all such equity awards shall be extended so that they expire one year after termination due to death or permanent disability.
In the event that Mr. Dorsey suffers an involuntary termination within the 12-month period following the effective date of a change of control, then in addition to all salary and bonuses accrued as of the date of his termination he will also be entitled to severance benefits. These include (i) the Company shall pay to Mr. Dorsey in one lump sum an amount equal to the greater of (A) 12 months of the salary that he was receiving immediately prior to the termination or (B) 12 months of the salary that he was receiving immediately prior to the change of control; (ii) the Company shall pay to Mr. Dorsey in one lump sum (A) any accrued but unpaid bonus for the calendar year preceding his termination, to the extent that all criteria for such bonus have been met (with
the exception of the requirement that he be employed on the date the bonus is to be paid), plus (B) 100% of the average bonus paid by the Company to him for services during each of the three most recent fiscal years (or such shorter period of time during which he was eligible for a bonus) prior to the date of the termination; (iii) full acceleration of the vesting of all equity awards held by Mr. Dorsey at the time of the termination, including any options, restricted stock, RSUs or other awards, and (iv) reimbursement for the cost of continuation of health insurance benefits provided to him immediately prior to the termination pursuant to the terms of COBRA or other applicable law for a period continuing until the earlier of 12 months following the termination or the date upon which he is no longer eligible for such COBRA or other benefits under applicable law. In addition, the performance-based stock options granted to Mr. Dorsey in February 2015 will vest upon the occurrence of a change in control.
If he is terminated for cause at any time or if he voluntarily resigns under circumstances that do not constitute an involuntary termination, then Mr. Dorsey shall not be entitled to receive payment of any severance benefit or any continuation or acceleration of stock option vesting and all of his restricted stock awards shall remain subject to all applicable forfeiture provisions and transfer restrictions. He will receive payment for all salary accrued as of the date of termination of employment.
Response to 2015 Say on Pay Vote
In May 2015, we held a stockholder advisory vote on the compensation of our Named Executive Officers, commonly referred to as a say-on-pay vote. Our stockholders approved the compensation of our Named Executive Officers, with over 92% of stockholder votes cast in favor of our 2015 say-on-pay resolution (excluding abstentions and broker non-votes). As we have evaluated our compensation practices and talent needs since that time, we were mindful of the support our stockholders expressed for our compensation philosophy. As a result, the Compensation Committee has decided to generally retain our existing approach to executive compensation for our continuing executives, with an emphasis on short- and long-term incentive compensation that rewards our senior executives for corporate and individual performance, and a continuing emphasis on performance-based equity awards.
In addition, when determining how often to hold a stockholder advisory vote on executive compensation, the Board took into account the strong preference for an annual vote expressed by our stockholders at our 2011 annual meeting. Accordingly, the Board determined that we will hold an advisory stockholder vote on the compensation of our Named Executive Officers every year until the next say-on-pay frequency vote. Accordingly, we have included Proposal 3 related to a stockholder advisory vote on the compensation of our Named Executive Officers in this proxy statement.
Tax and Accounting Considerations
Deductibility of Executive Compensation. In making compensation decisions affecting our executive officers, the Compensation Committee may consider our ability to deduct under applicable federal corporate income tax law compensation payments made to executives. Specifically, the Compensation Committee may consider the requirements and impact of Section 162(m) of the Internal Revenue Code, which limits the tax deductibility to us of compensation in excess of $1.0 million in any year for certain executive officers, except for qualified “performance-based compensation” under the Section 162(m) rules. In setting compensation for executive officers, the deductibility of the compensation under Section 162(m) is only one factor that is weighed and compensation in excess of these limits may be granted, particularly while the Company is in a net operating loss position and is not currently paying income taxes.
Accounting for Share-Based Compensation. In accordance with the Financial Accounting Standards Board’s Accounting Standards Codification 718, we are required to estimate the value for each award of equity compensation at the measurement date using the fair value method and record an expense over the service period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is incurred.
Compensation Committee Report
The Company’s Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 407(e)(5) of Regulation S-K. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the foregoing Compensation Discussion and Analysis be included in this Proxy Statement.
Submitted by the Compensation Committee of the Board of Directors:
Sandford D. Smith (Chair)
Wendell Wierenga, Ph.D.
Kleanthis G. Xanthopoulos, Ph.D.
Summary Compensation Table
The following table sets forth the compensation paid by us during the years ended December 31, 2015, 2014 and 2013 to (1) our principal executive officer during fiscal year 2015 and (2) the other two most highly paid executive officers who were serving as executive officers as of December 31, 2015:
|
| | | | | | | | | | | | | | | | | | | | | | |
Name and Position | | Year | | Salary | | Option Awards (4) | | Non-Equity Incentive Plan Compensation (5) | | All Other Compensation | | Total |
Richard W. Pascoe, Chief Executive Officer, Secretary and Director (1) | | 2015 | | $ | 473,200 |
| | $ | 342,413 |
| | $ | 88,555 |
| | $ | 13,124 |
| | $ | 917,292 |
|
| 2014 | | $ | 453,615 |
| | $ | 463,307 |
| | $ | 170,106 |
| | $ | 11,036 |
| | $ | 1,098,064 |
|
| 2013 | | $ | 335,342 |
| | $ | 1,427,400 |
| | $ | 142,521 |
| | $ | 10,597 |
| | $ | 1,915,860 |
|
Barbara Troupin, M.D., M.B.A., Senior Vice President, Chief Medical Officer (2) | | 2015 | | $ | 325,000 |
| | $ | — |
| | $ | 48,750 |
| | $ | 62,938 |
| | $ | 436,688 |
|
| 2014 | | $ | 1,250 |
| | $ | 242,335 |
| | $ | 375 |
| | $ | — |
| | $ | 243,960 |
|
Brian T. Dorsey, Senior Vice President, Chief Development Officer (3) | | 2015 | | $ | 310,000 |
| | $ | — |
| | $ | 46,500 |
| | $ | 12,938 |
| | $ | 369,438 |
|
| 2014 | | $ | 11,923 |
| | $ | 236,132 |
| | $ | 3,577 |
| | $ | 54,331 |
| | $ | 305,963 |
|
| |
(1) | Mr. Pascoe joined the Company effective March 18, 2013. In 2015, all other compensation includes $10,600 for the Company’s matching and profit sharing contribution to the 401(k) plan and $2,524 in life insurance premiums. |
| |
(2) | Dr. Troupin joined the Company effective December 12, 2014. Dr. Troupin’s all other compensation in 2015 includes $50,000 in relocation expenses, $10,600 for the Company’s matching and profit sharing contribution to the 401(k) plan and $2,338 in life insurance premiums. |
| |
(3) | Mr. Dorsey joined the Company effective December 1, 2014. Mr. Dorsey’s all other compensation in 2015 includes $10,600 for the Company’s matching and profit sharing contribution to the 401(k) plan and $2,338 in life insurance premiums. |
| |
(4) | Represents the grant-date fair value of equity awards, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of valuation assumptions for stock-based compensation, see note 8 to the Company’s audited financial statements filed with our annual report on Form 10-K for the year ended December 31, 2015. These figures do not reflect the amortized compensation expensewithout cause upon, or value received by the officer in the year indicated or that may be received by the officer with respect to such equity awards. With respect to the performance-based options granted to Mr. Pascoe, Dr. Troupin and Mr. Dorsey during 2015, the amounts in these columns include the grant-date fair value of such stock option awards based upon the probable outcome of such conditions, of which none were deemed probable. The full grant date fair value of such performance-based stock options, assuming full achievement of the performance conditions to which such stock options are subject, is as follows: Mr. Pascoe, $137,550; Dr. Troupin, $45,850; and Mr. Dorsey, $45,850. |
| |
(5) | Represents the portion of the 2015 bonus paid in cash made to the above officers. For 2015, at the discretion of the Company’s Compensation Committee, RSUs were granted in satisfaction of one-half of the executives’ 2015 bonus awards. The RSUs were granted on March 15, 2016 under the Company’s 2012 Stock Long Term Incentive Plan. The number of RSUs issued to each executive was determined by dividing the portion of the annual bonus to be paid in the form of RSUs (Mr. Pascoe: $88,555; Dr. Troupin: $48,750; and Mr. Dorsey: $46,500) by the closing price of the Company’s common stock on the date of grant ($1.11). The RSUs will vest on February 15, 2017, subject to the executive’s continued employment with the Company through such vesting date, and therefore are not listed above as compensation during 2015. |
Grants of Plan-Based Awards
The following table sets forth certain information regarding grants of plan-based awards to the Named Executive Officers during fiscal 2015:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | Option Awards: Number of Securities Underlying Options Granted (2) | | Exercise Price of Option Awards | | Grant Date Fair Value of Stock and Option Awards (3) |
Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Target (#) | | | | |
Richard W. Pascoe | | 1/29/2015 | | $ | — |
| | $ | 236,600 |
| | $ | — |
| | — |
| | | 300,000 |
| | $ | 1.43 |
| | $ | 342,413 |
|
| 1/29/2015 | | | | | | | | 45,000 |
| (4) | | — |
| | $ | 1.43 |
| | $ | — |
|
| 1/29/2015 | | | | | | | | 60,000 |
| (5) | | — |
| | $ | 1.43 |
| | $ | — |
|
| 1/29/2015 | | | | | | | | 45,000 |
| (6) | | — |
| | $ | 1.43 |
| | $ | — |
|
Barbara Troupin, M.D., M.B.A. | | 1/29/2015 | | $ | — |
| | $ | 130,000 |
| | $ | — |
| | 15,000 |
| (4) | | — |
| | $ | 1.43 |
| | $ | — |
|
| | 1/29/2015 | | | | | | | | 20,000 |
| (5) | | — |
| | $ | 1.43 |
| | $ | — |
|
| | 1/29/2015 | | | | | | | | 15,000 |
| (6) | | — |
| | $ | 1.43 |
| | $ | — |
|
Brian T. Dorsey | | 1/29/2015 | | $ | — |
| | $ | 124,000 |
| | $ | — |
| | 15,000 |
| (4) | | — |
| | $ | 1.43 |
| | $ | — |
|
| | 1/29/2015 | | | | | | | | 20,000 |
| (5) | | — |
| | $ | 1.43 |
| | $ | — |
|
| | 1/29/2015 | | | | | | | | 15,000 |
| (6) | | — |
| | $ | 1.43 |
| | $ | — |
|
| |
(1) | Represents the target bonus awards under our annual incentive plan as described above under “Annual Cash Incentive.” |
| |
(2) | Except as otherwise noted, all stock options have a term of ten years from the date of grant and vest over four years, with 25% of the shares subject to the options vest on the first anniversary of the date of grant and the remainder vest in 36 monthly thereafter. For a description of the accelerated vesting provisions applicable to the stock options granted to the Named Executive Officers, see “Payments Upon Termination or Change in Control” above. |
| |
(3) | This column reflects the aggregate grant date fair value of equity awards granted in 2015 and calculated in accordance with FASB ASC 718, excluding the effect of estimated forfeitures. For a discussion of valuation assumptions for stock-based compensation, see note 8 to the Company’s audited financial statements filed with our annual report on Form 10-K for the year ended December 31, 2015. These figures do not reflect the amortized compensation expense or value received by the officer in the year indicated or that may be received by the officer with respect to such equity awards. With respect to the performance-based options granted to Mr. Pascoe, Dr. Troupin, and Mr. Dorsey during 2015, the amounts in these columns include the grant-date fair value of such stock option awards based upon the probable outcome of such conditions. The full grant date fair value of such performance-based stock options, assuming full achievement of the performance conditions to which such stock options are subject, is set forth in the footnotes to the Summary Compensation Table above. |
| |
(4) | Represents performance-based stock options that vest if the Last Patient Out in a Phase 3 development program occurs on or before December 31, 2017. In the event such performance objective is achieved, the option shall vest 100% of the underlying shares on December 31, 2017. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control. |
| |
(5) | Represents performance-based stock options that vest if the Company successfully completes the fispemifene Phase 2b clinical trial in secondary hypogonadism by June 30, 2016, the results of which support moving into Phase 3 trials. In the event such performance objective is achieved, the option shall vest 100% of the underlying shares on June 30, 2016. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control. |
| |
(6) | Represents performance-based stock options that vest if the filing of an NDA for RayVa occurs on or before December 31, 2017. In the event such performance objective is achieved, the option shall vest 100% of the underlying shares on December 31, 2017. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control. |
Outstanding Equity Awards as of December 31, 2015
The following table shows information regarding our outstanding equity awards as of December 31, 2015 for the Named Executive Officers:
|
| | | | | | | | | | | | | | | |
| | Option Awards (1) |
Name | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Non-Exercisable (#) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date |
Richard W. Pascoe | | 618,750 |
| | 281,250 |
| | — |
| | $ | 2.51 |
| | 3/18/2023 |
| | 72,328 |
| | 85,480 |
| | — |
| | $ | 2.36 |
| | 2/6/2024 |
| | 62,875 |
| | 25,875 |
| (2) | — |
| | $ | 2.38 |
| | 2/20/2024 |
| | — |
| | — |
| | 35,500 |
| (3) | $ | 2.38 |
| | 2/20/2024 |
| | — |
| | 300,000 |
| | — |
| | $ | 1.43 |
| | 1/29/2025 |
| | — |
| �� | — |
| | 45,000 |
| (4) | $ | 1.43 |
| | 1/29/2025 |
| | — |
| | — |
| | 60,000 |
| (5) | $ | 1.43 |
| | 1/29/2025 |
| | — |
| | — |
| | 45,000 |
| (6) | $ | 1.43 |
| | 1/29/2025 |
Barbara Troupin, M.D., M.B.A. | | 75,000 |
| | 225,000 |
| | — |
| | $ | 1.16 |
| | 12/12/2024 |
| | — |
| | — |
| | 15,000 |
| (4) | $ | 1.43 |
| | 1/29/2025 |
| | — |
| | — |
| | 20,000 |
| (5) | $ | 1.43 |
| | 1/29/2025 |
| | — |
| | — |
| | 15,000 |
| (6) | $ | 1.43 |
| | 1/29/2025 |
Brian T. Dorsey | | 75,000 |
| | 225,000 |
| | — |
| | $ | 1.13 |
| | 12/1/2024 |
| | — |
| | — |
| | 15,000 |
| (4) | $ | 1.43 |
| | 1/29/2025 |
| | — |
| | — |
| | 20,000 |
| (5) | $ | 1.43 |
| | 1/29/2025 |
| | — |
| | — |
| | 15,000 |
| (6) | $ | 1.43 |
| | 1/29/2025 |
| |
(1) | Except as otherwise noted, all stock options have a term of ten years from the date of grant and vest over four years, with 25% of the shares subject to the options vest on the first anniversary of the date of grant and the remainder vest in 36 monthly thereafter. For a description of the accelerated vesting provisions applicable to the stock options granted to the Named Executive Officer, see “Payments Upon Termination or Change in Control” above. |
| |
(2) | Pipeline Build. Represents performance-based stock options that vest based on the Company’s initiation of one or more Phase II or later clinical trials of assets approved by the Board (each, a “Qualifying Trial”) on or before December 31, 2015, as follows: (1) 25% of the underlying shares will vest upon the First Vesting Date (e.g., the enrollment of the first patient in the first Qualifying Trial) and 1/96th of the total number of shares subject to the option will vest monthly thereafter over a 24-month period so that the option will be vested and exercisable with respect to 50% of the total number of shares of stock underlying the stock option on the second anniversary of the First Vesting Date, provided that the executive does not have a termination of employment prior to any such vesting date, and (2) 25% of the underlying shares will vest upon the Second Vesting Date (e.g., the enrollment of the first patient in the second Qualifying Trial), and 1/96th of the total number of shares subject to the option will vest monthly thereafter over a 24-month period so that the option will be vested and exercisable with respect to 100% of the total number of shares of stock underlying the stock option on the second anniversary of the Second Vesting Date, provided that the executive does not have a termination of employment prior to any such vesting date. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control. In December 2014, the Compensation Committee determined that the “First Vesting Date” for the foregoing options had occurred as a result of the randomization and first dosing of the first RayVa Phase 2a patient in December 2014. As a result, a portion of the stock option award vested and a portion became subject solely to time-based vesting, as described above, on such date. In May 2015, the Compensation Committee determined that the “Second Vesting Date” for the foregoing options had occurred as a result of the randomization and first dosing of the first fispemifene patient in May 2015. As a result, a portion of the stock option award vested and a portion became subject solely to time-based vesting, as described above, on such date.
|
| |
(3) | Room Temperature Product. Represents performance-based stock options that vest if the Company receives marketing authorization for a room temperature formulation or dispenser device for Vitaros by December 31, 2016. In the event such performance objective is achieved, the option shall vest with respect to 50% of the underlying shares on the date of receipt of such marketing authorization, and the remaining 50% will vest monthly over the next two years following the achievement
|
of such goal, provided that the executive does not have a termination of employment prior to any such vesting date. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control.
| |
(4) | LPO in Phase 3 Program. Represents performance-based stock options that vest if the last patient out in a Phase 3 development program occurs on or before December 31, 2017. In the event such performance objective is achieved, the option shall vest 100% of the underlying shares on December 31, 2017. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control.
|
| |
(5) | Fispemifene Phase 2b. Represents performance-based stock options that vest if the Company successfully completes the fispemifene Phase 2b clinical trial in secondary hypogonadism by June 30, 2016, the results of which support moving into Phase 3 trials. In the event such performance objective is achieved, the option shall vest 100% of the underlying shares on June 30, 2016. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control.
|
| |
(6) | RayVa NDA. Represents performance-based stock options that vest if the Company is able to file an NDA for RayVa on or before December 31, 2017. In the event such performance objective is achieved, the option shall vest 100% of the underlying shares on December 31, 2017. Notwithstanding the foregoing, 100% of the shares subject to the option will accelerate and vest in full immediately prior to the occurrence of a change in control.
|
Option Exercises and Stock Vested
There were no stock awards that vested in fiscal 2015 held by the Named Executive Officers. None of our Named Executive Officers exercised options during fiscal 2015.
Pension Benefits
We do not have a defined benefit plan. Our Named Executive Officers did not participate in, or otherwise receive any special benefits under, any pension or defined benefit retirement plan sponsored by us during fiscal 2015.
Non-Qualified Deferred Compensation
During 2015, our Named Executive Officers did not contribute to, or earn any amount with respect to, any defined contribution or other plan sponsored by us that provides for the deferral of compensation on a basis that is not tax-qualified.
Potential Payments upon Termination or Change of Control
The following table sets forth information regarding payments that would be made to Mr. Pascoe, Dr. Troupin and Mr. Dorsey in four scenarios: (1) upon an involuntary termination prior to a change in control; (2) upon termination as a result of the executive’s disability or death; (3) upon an involuntary termination within 12 months following, a change of control, we will pay to Mr. Golembiewski an amount equal to his then current monthly salary for a period of three months following his employment termination date as severance; provided that Mr. Golembiewski has (i) returned to us all our property in control;his possession, and (4) upon(ii) executed and delivered to us a change in control (without an involuntary termination). The table assumesgeneral release of all claims that the termination of employmenthe may have against us or change in control, as applicable, occurred on December 31, 2015 and does not include payments earned but not paid to the employee as of that date, such as accrued salary and unpaid vacation amounts. Base salary information is based on the salaries in effect as of December 31, 2015. The closing price per share of our Common Stock on The NASDAQ Capital Market on December 31, 2015 (which was the last business day of fiscal 2015) was $0.99.persons affiliated with us.
|
| | | | | | | | | | | | | | | | | | |
Name | | Benefit Type | | Payment in the Event of an Involuntary Termination Prior to a Change in Control | | Payment in the Event of a Termination by the Company following Disability or Death | | Payment in the Event of an Involuntary Termination Within 12 Months Following a Change in Control | | Payment in the Event of a Change in Control Without Termination |
Richard W. Pascoe | | Base Salary (1) | | $ | 473,200 |
| | $ | — |
| | $ | 473,200 |
| | $ | — |
|
| | Bonus | | $ | 175,874 |
| (2) | $ | 236,600 |
| (3) | $ | 175,874 |
| (2) | $ | — |
|
| | Benefits (4) | | $ | 34,733 |
| | $ | — |
| | $ | 34,733 |
| | $ | — |
|
| | Option Acceleration (5) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
Barbara Troupin, M.D., M.B.A. | | Base Salary (1) | | $ | 325,000 |
| | $ | — |
| | $ | 325,000 |
| | $ | — |
|
| | Bonus | | $ | 97,500 |
| (2) | $ | 130,000 |
| (3) | $ | 97,500 |
| (2) | $ | — |
|
| | Benefits (4) | | $ | 11,107 |
| | $ | — |
| | $ | 11,107 |
| | $ | — |
|
| | Option Acceleration (5) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
Brian T. Dorsey | | Base Salary (1) | | $ | 310,000 |
| | $ | — |
| | $ | 310,000 |
| | $ | — |
|
| | Bonus | | $ | 93,000 |
| (2) | $ | 124,000 |
| (3) | $ | 93,000 |
| (2) | $ | — |
|
| | Benefits (4) | | $ | 34,733 |
| | $ | — |
| | $ | 34,733 |
| | $ | — |
|
| | Option Acceleration (5) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
19 | |
(1) | Reflects 12 months of base salary for each Named Executive Officer, payable in cash in a lump sum. |
| |
(2) | For Mr. Pascoe, the amount reflects the average of his annual bonuses for 2013, 2014 and 2015 (with his 2013 annual bonus annualized for such purpose). For Dr. Troupin and Mr. Dorsey, the amount reflects the actual value of their bonuses for 2015. For 2015, the annual bonus amounts were calculated including the portion of the bonus paid in the form of RSUs. These amounts are payable in cash in a lump sum. |
| |
(3) | Reflects actual annual bonus for 2015. These amounts are payable in cash in a lump sum. |
| |
(4) | Reflects the value of 12 months of health benefits continuation. On April 13, 2016, Dr. Troupin and the Company entered into an employment transition agreement pursuant to which, among other things, Dr. Troupin agreed to receive six months of health benefits continuation. |
| |
(5) | The value of accelerated vesting equals the difference (if positive) between the option exercise price and the last reported stock price for fiscal 2015 ($0.99), multiplied by the number of options that would have been accelerated upon a change of control occurring on December 31, 2015. Since all of the options held by our Named Executive Officers as of December 31, 2015 had exercise prices in excess of the closing price per share of our Common Stock on such date, no value is attributed to such acceleration in the table above. |
TABLE OF CONTENTS
We have adopted a non-employee director compensation policy pursuant to which our non-employee directors are eligible to receive cash and equity compensation. During 2015, each
On March 20, 2019, the Compensation Committee approved a non-employee director was entitled to receivecompensation policy governing the compensation for our non-employee directors (the “Non-Employee Director Compensation Policy”), authorizing the payment of an annual cash retainer of $40,000 with additional annual cash retainers for the chairs of our various Board committees in the following amounts: $15,000 for the chair of the Audit Committee, $12,000 for the chair of the Compensation Committee and $8,000 for the chair of the Corporate Governance/Nominating Committee. Additionally, non-chair members of these committees will receive additional annual cash retainers in the following amounts: $7,000 for members of the Audit Committee, $5,000 for members of the Compensation Committee and $3,000 for members of the Corporate Governance/Nominating Committee. The Chairman ofservice on the Board, is also entitled to receivean annual retainer of an additional annual cash retainer of $40,000 per year, payable in cash.
In February 2016, our Board approved an amendment tofor service as the equity component of our non-employee director compensation policy. Prior to such date, any non-employee director who was first elected to the Board was granted an option to purchase 50,000 shares of our common stock on the date of his or her initial election to the Board and thereafter on the first trading day of each calendar year, each non-employee director was eligible to receive an option to purchase 25,000 shares of common stock (or, in the case of our Chairman of the Board, an option to purchase 50,000 sharesannual retainer of common stock). Pursuant to$15,000 for service as the amendmentChair of the Audit Committee, an annual retainer of $7,000 for service as a member of the Audit Committee (excluding the Chair of the committee), an annual retainer of $12,000 for service as the Chair of the Compensation Committee, an annual retainer of $5,000 for service as a member of the Compensation Committee (excluding the Chair of the committee), an annual retainer of $8,000 for service as the Chair of the Corporate Governance/Nominating Committee and an annual retainer of $3,000 for service as a member of the Corporate Governance/Nominating Committee (excluding the Chair of the committee), and equity compensation in February 2016, any non-employee director who is first elected to the Board will be grantedform of an option to purchase 60,00024,000 shares of our common stockCommon Stock upon election or appointment to the Board (the “Initial Grants”) and an annual option to purchase 16,000 shares of our Common Stock (the “Annual Grants”). The Initial Grants vested at rate of one-third of the shares subject to the option on the one-year anniversary of the date of his or her initial election to the Boardgrant and the annual option grant was increased to 35,000 options (the annual grant in the case of our Chairman1/36th of the Board was unchanged and was also an option to purchase 50,000 shares of common stock prior to the amendment). Initial awards vest over three years in 36 equal monthly installments. Annual
awards vest over one year in 12 equal monthly installments, subject to the director’s continuing serviceoption on a monthly basis over the following 24 months. The Annual Grants will vest at a rate of 1/12th per month from the date of grant.
As previously disclosed, on March 15, 2021, the Compensation Committee revised our Board on those dates. All initial andNon-Employee Director Compensation Policy, effective as of April 1, 2021, to increase the cash portion of the annual awardsretainer payable to our non-employee directors will vest in full in the event of a change in control.
On April 5, 2016, our Board approved an amendmentand to the cash component of our non-employee director compensation policy. Prior to such date, the annual retainers were payable in cash. Pursuant to the amendment, the annual retainers shall be paid by the Company in quarterly installments as follows: (x) seventy-five percent (75%) of the retainer payable to a non-employee director for a calendar quarter shall be paid in cash within fifteen days following the end of such calendar quarter; and (y) twenty-five percent (25%) of the retainer payable to a non-employee director for a calendar quarter shall be paid in the form of fully vested shares of the Company’s common stock granted automatically on the last day of such calendar quarter pursuant to the Company’s 2012 Stock Long Term Incentive Plan (the “2012 Plan”), withincrease the number of shares of our Common Stock issuable to our non-employee directors pursuant to the Company’s common stockInitial Grant and the Annual Grants. Effective April 1, 2021, our non-employee directors are entitled to be issued calculated by dividingan annual retainer of $40,000 for service on the amount payable to such non-employee director divided byBoard, an annual retainer of an additional $40,000 for service as the closing price per shareChairman of the Company’s commonBoard, an annual retainer of $15,000 for service as the Chair of the Audit Committee, an annual retainer of $7,500 for service as a member of the Audit Committee (excluding the Chair of the committee), an annual retainer of $12,000 for service as the Chair of the Compensation Committee, an annual retainer of $6,000 for service as a member of the Compensation Committee (excluding the Chair of the committee), an annual retainer of $8,000 for service as the Chair of the Corporate Governance/Nominating Committee and an annual retainer of $4,000 for service as a member of the Corporate Governance/Nominating Committee (excluding the Chair of the committee), and equity compensation in the form of an option to purchase 42,000 shares of our Common Stock (subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions) upon election or appointment to the Board and an annual option to purchase 35,000 shares of our Common Stock (subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions). The Initial Grants will vest at rate of one-third of the shares subject to the option on the last dayone-year anniversary of the calendar quarterdate of grant and 1/36th of the shares subject to which such payment relates.the option on a monthly basis over the following 24 months. The Annual Grants will vest at a rate of 1/12th per month from the date of grant.
Non-Employee Director Compensation for 20152021
Below is a summary of the non-employee director compensation earnedpaid in fiscal 2015:2021:
Richard W. Pascoe | | | $40,000 | | | $18,035 | | | $58,035 |
Brian Lian, Ph.D. | | | $67,377 | | | $18,035 | | | $85,412 |
Daniel J. O’Connor, J.D. | | | $60,753 | | | $18,035 | | | $78,788 |
Margaret Dalesandro, Ph.D.(3) | | | $17,214 | | | $77,284 | | | $94,498 |
Judith Dunn, Ph.D.(4) | | | $33,916 | | | $18,035 | | | $51,951 |
|
| | | | | | | | | | | | | | | | |
Name | | Cash Compensation | | Option Grants (1)(2) | | Other Compensation | | Total |
Kleanthis G. Xanthopoulos, Ph.D. | | $ | 80,000 |
| | $ | 39,743 |
| | $ | — |
| | $ | 119,743 |
|
Rusty Ray | | $ | 56,250 |
| | $ | 19,872 |
| | $ | — |
| | $ | 76,122 |
|
Deirdre Y. Gillespie, M.D. (3) | | $ | 62,000 |
| | $ | 19,872 |
| | $ | — |
| | $ | 81,872 |
|
Paul V. Maier | | $ | 58,000 |
| | $ | 19,872 |
| | $ | — |
| | $ | 77,872 |
|
Wendell Wierenga, Ph.D. | | $ | 45,000 |
| | $ | 19,872 |
| | $ | — |
| | $ | 64,872 |
|
Sandford D. Smith | | $ | 43,750 |
| | $ | 19,872 |
| | $ | — |
| | $ | 63,622 |
|
(1)
| Includes the value of the annual retainers payable to our non-employee directors. |
(1)(2)
| This column reflectsRepresents the aggregate grant date fair value of equity awardsthe stock options granted in 2015 and calculated2021, computed in accordance with FASB ASC 718, excluding the effect of estimated forfeitures. For a discussion of valuation assumptions for stock-based compensation, see note 8 to the Company’s audited financial statements filed with our annual report on Form 10-K for the year ended December 31, 2015. These figures do not reflect the amortized compensation expense or value received by the director in the year indicated or that may be received by the director with respect to such equity awards. |
| |
(2) | Topic 718. As of December 31, 2015,2021, each of our non-employee directors held stock options to purchase the following number of shares of our Common Stock: Dr. Xanthopoulos,common stock: Mr. Pascoe, options to purchase 132,00045,832 shares; Mr. Ray,Dr. Lian, options to purchase 82,00056,000 shares; Dr. Gillespie,Mr. O’Connor, options to purchase 82,00056,000 shares; Mr. Maier,and Dr. Dalesandro, options to purchase 91,000 shares; Dr. Wierenga, options to purchase 125,000 shares; and Mr. Smith, options to purchase 110,00042,000 shares. |
| |
(3)
| Dr. GillespieDalesandro was appointed to our Board on September 1, 2021. |
(4)
| Dr. Dunn resigned from theour Board effective as of April 5, 2016.September 1, 2021. |
Risk Management and Mitigation
In reviewing our compensation structure in fiscal 2015, the Compensation Committee also considered how the Company’s compensation policies may affect the Company’s risk profile and whether compensation policies and practices may encourage risk-taking by employees. More specifically, the Compensation Committee considered the general design philosophy of the Company’s policies for employees whose conduct would be most affected by incentives established by compensation policies. In considering these issues, the Compensation Committee concluded that the use of performance-based bonuses and long-term equity awards did not appear to create undue risks for the Company or encourage excessive risk-taking behavior on the part of Named Executive Officers.
With respect to bonus awards, the amount of our Named Executive Officers’ individual awards depends exclusively on overall Company performance, which reduces the incentive for an individual to take undue risks in an effort to increase the amount of his or her bonus award for a particular year. The Company’s performance goals are reviewed and approved by the Compensation Committee in the early part of each fiscal year and are considered to be generally of the nature that would not encourage or reward excessive risk taking. Additionally, the Compensation Committee monitors the Company’s performance throughout the year and may intervene where actions by executive officers in pursuit of performance goal attainment appear to lead to undue risk.
With respect to equity awards, these awards typically vest over several years, meaning that long-term value creation, contrasted with short-term gain, presents the best opportunity for employees to profit from these awards. To the extent that performance-based equity awards are used, the events that trigger vesting are expected to be realized several years in the future. The Company has not historically used claw-back provisions or imposed holding periods for vested awards, although the Compensation Committee may consider whether such mechanisms might be appropriate in the future to mitigate risk. Additionally, the use of financial-based performance metrics to determine employee compensation may subject those payouts to claw-back penalties under the Dodd-Frank Act, to the extent that there is a subsequent restatement of the financial measure that was used to determine a payout.
TABLE OF CONTENTS
EQUITY COMPENSATION PLAN INFORMATION Equity Compensation Plan Information
The following table gives information as of December 31, 20152021 about shares of our Common Stock that may be issued upon the exercise of options warrants and rightsor vesting of restricted stock units under all of our existing equity compensation plans:
Equity compensation plans approved by security holders(3)(4) | | | 9,336,477 | | | $2.67 | | | 1,405,011 |
Equity compensation plans not approved by security holders(5) | | | 368,943 | | | $1.37 | | | 2,111,814 |
Total | | | 9,705,420 | | | $2.60 | | | 3,516,825 |
|
| | | | | | | | | | | | | | |
Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | | | Weighted-average exercise price of outstanding options, warrants and rights (b) | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | |
Equity compensation plans approved by security holders | | 4,053,605 |
| | (1) | | $ | 1.95 |
| | 2,534,252 |
| | (2) |
Equity compensation plans not approved by security holders | | — |
| | | | — |
| | — |
| | |
Totals | | 4,053,605 |
| | | | $ | 1.95 |
| | 2,534,252 |
| | |
(1)
| |
(1) | Consists of the weighted average exercise price of outstanding options outstanding as of December 31, 2015 under The NexMed Inc. Stock Option and Long Term Incentive Plan, The NexMed, Inc. 2006 Stock Incentive Plan (the “2006 Plan”) and the 2012 Plan. 2021, excluding Dr. Mehra’s PRSU since it does not have an exercise price. |
(2)
| |
(2) | Consists entirely of 1,362,832 and 1,171,420 shares of Common Stock that remain available for future issuance under the Inducement Plan, the 2020 Employee Stock Purchase Plan (the “ESPP”) and the Amended and Restated 2012 Plan as of December 31, 2015,2021. |
(3)
| Consists of options outstanding as of December 31, 2021 under theAmended and Restated 2012 Plan and the NexMed, Inc. 2006 Stock Incentive Plan, respectively.and shares of Common Stock that remain available for future issuance under the ESPP, including the PRSU granted to Dr. Mehra in March 2021, which was outstanding as of December 31, 2021, but voluntarily forfeited by Dr. Mehra and cancelled on March 8, 2022. |
(4)
| The number of shares of Common Stock available for issuance under the Amended and Restated 2012 Plan will increase automatically on January 1st of each year, beginning January 1, 2020 and ending on (and including) January 1, 2029 by the lesser of (a) 4% of the number of shares of Common Stock issued and outstanding on a fully-diluted basis as of the close of business on the immediately preceding December 31, and (b) a number of shares of Common Stock set by the Board on or prior to each such January 1. On January 1, 2021 and each January 1 thereafter through January 1, 2030, the number of shares available for issuance under the ESPP shall be cumulatively increased by the lesser of (i) 1% of the number of shares of Common Stock issued and outstanding on the immediately preceding December 31, and (ii) such number of shares as determined by the Board or the Compensation Committee. |
(5)
| Consists of the Inducement Plan and the Seelos Therapeutics, Inc. 2016 Equity Incentive Plan. |
TABLE OF CONTENTS
REPORT OF THE AUDIT COMMITTEE
The Audit Committee evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit Committee operates under a written Audit Committee Charter that has been adopted by the Board, a copy of which is available on the Company’s website at www.apricusbio.comwww.seelostherapeutics.com/corporate-governance/. All members of the Audit Committee currently meet the independence and qualification standards for Audit Committee membership set forth in the listing standards provided by NASDAQNasdaq Rules and applicable SEC rules.
The Audit Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit Committee’s members in business, financial and accounting matters.
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2021. This review included a discussion of the quality and the acceptability of the Company’s financial reporting, including the nature and extent of disclosures in the financial statements and the accompanying notes. The Audit Committee also reviewed the progress and results of the testing of the design and effectiveness of itsthe Company’s internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002.
Throughout the year, the Audit Committee monitors matters related to the independence of the Company’s independent registered public accounting firm. As part of its monitoring activities, the Audit Committee reviews the relationships between the independent registered public accounting firm and the Company. After reviewing the relationships and discussing them with both management and the Company’s independent registered public accounting firm, the Audit Committee discussed the independent registered public accounting firm’s overall relationship with the Company, as well as its objectivity and independence. Based on its review, the Audit Committee is satisfied with the auditors’independent registered public accounting firm’s independence.
The Audit Committee has received the written disclosures and the letter from the Company’s independent registered public accounting firm also has confirmed to the Committee in writing, as required by applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”“PCAOB”) regarding itsindependent registered public accounting firm’s communications with the Audit Committee concerning independence, that, in its professional judgment, it isand has discussed with the Company’s independent ofregistered public accounting firm the Company under all relevant professional and regulatory standards.independent registered public accounting firm’s independence.
The Audit Committee also reviewed with the Company’s independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards, including Statement on Auditing Standards No. 16, as adopted by the PCAOB.applicable requirements of the PCAOB and the SEC.
In addition to the matters specified above, the Audit Committee discussed with the Company’s independent registered public accounting firm the overall scope, plans and estimated costs of their audit. The Audit Committee met with the independent registered public accounting firm periodically, with and without management present, to discuss the results of the independent registered public accounting firm’s examinations, the overall quality of the Company’s financial reporting and the independent registered public accounting firm’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports.
TABLE OF CONTENTS
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2021.
|
|
| Submitted by the Audit Committee of the Board of Directors |
| | | |
Paul V. Maier | | | Brian Lian, Ph.D. (Chair) |
Deirdre Y. Gillespie, M.D. | | | Margaret Dalesandro, Ph.D. |
Rusty Ray | | | Richard W. Pascoe |
| | | Daniel J. O’Connor* |
*
| Served on the Audit Committee until February 2022. |
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to “incorporate by reference” information into this document. This means that the Company can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this document, except for any information that is superseded by information that is included directly in this document or in any other subsequently filed document that also is incorporated by reference herein.
This document incorporates by reference our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which was filed previously with the SEC and contains important information about the Company and its financial condition, including information contained in our such annual report under the captions “Financial Statements and Supplementary Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Changes in and Disagreements with Accountants on Accounting and Financial Disclosure,” and “Quantitative and Qualitative Disclosures about Market Risk.”
The Company will amend this proxy statement to include or incorporate by reference any additional documents that the Company may file with the Securities and Exchange Commission under Section 13(a), 13(e), 14, or 15(d) of the Exchange Act after the date of this document to the extent required to fulfill our disclosure obligations under the Exchange Act.
Copies of the 2015 Annual Report accompany this proxy statement. This proxy statement and the Company’s 2015 Annual Report are available on the Internet at www.apricusbio.com. These documents are also included in our SEC filings, which you can access electronically at the SEC’s website at http://www.sec.gov.
TABLE OF CONTENTS
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Review and Approval of Transactions with Related Persons
Our Board has adopted a written policy and procedures for review, approval and monitoring of transactions involving our Companyus and “related persons” (directors, director nominees, executive officers and stockholders owning 5% or greater of our outstanding Common Stock and immediate family members of any of the foregoing). The policy covers any related person transaction that meets the minimum threshold for disclosure in our proxy statement under our policy addressing the relevant SEC rules (generally, transactions involving amounts exceeding the lesser of $120,000 in which a related person has a direct or indirect material interest). Related person transactions must be approved by the Board or by the Audit Committee of the Board consisting solely of independent directors, which will approve the transaction if they determine that it is in our best interests. The Board or the Audit Committee will periodically monitor the transaction to ensure that there are no changes that would render it advisable for us to amend or terminate the transaction.
Transactions with Related Persons
The severance arrangementsemployment agreements we have entered into with each of our executive officersNamed Executive Officers provide for severance benefits in specified circumstances, as well as benefits in connection with a change in control. See “Payments Uponthe section of this Proxy Statement titled “Executive Compensation - Payments upon Termination or Change In Control.”in Control” for additional information about these arrangements.
Our Bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the laws of the State of Nevada. Further, we have entered into indemnification agreements with each of our directors and officers, and we have purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.
TABLE OF CONTENTS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERSThe following table sets forth information with respect to the beneficial ownership, as of the Record Date,March 25, 2022, of Common Stock by (a) each of our Named Executive Officers and current directors individually, (b) our current directors and executive officers as a group and (c) each holder of more than 5% of the Company’sour outstanding Common Stock.
Beneficial ownership and percentage ownership are determined in accordance with the Rule 13d-3 of the Exchange Act. Under these rules, shares of common stockCommon Stock issuable under stock options or warrants that are exercisable within 60 days of the Record DateMarch 25, 2022 are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or warrant(s), but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over their shares of Common Stock, except for those jointly owned with that person’s spouse.
|
| | | | | | |
Name and Address of Beneficial Owner (1) | | Number of Shares Beneficially Owned | | Percentage of Class (%) (2) |
|
Sarissa Capital Management LP, 660 Steamboat Road, Greenwich, CT 06830 (3) | | 21,203,577 |
| | 30.95 | % |
Aspire Capital Fund, LLC, 155 North Wacker Drive, Suite 1600, Chicago, IL 60606 (4) | | 6,102,228 |
| | 9.68 | % |
| | | | |
Directors and Executive Officers | | | | |
Richard W. Pascoe (5) | | 1,029,787 |
| | 1.64 | % |
Kleanthis G. Xanthopoulos (6) | | 213,022 |
| | * |
|
Rusty Ray (7) | | 131,112 |
| | * |
|
Deirdre Y. Gillespie, M.D. (8) | | 122,433 |
| | * |
|
Brian T. Dorsey (9) | | 116,250 |
| | * |
|
Wendell Wierenga, Ph.D. (10) | | 112,352 |
| | * |
|
Barbara Troupin, M.D., M.B.A. (11) | | 106,250 |
| | * |
|
Paul V. Maier (12) | | 105,583 |
| | * |
|
Sandford D. Smith (13) | | 101,870 |
| | *
|
|
All current executive officers and directors as a group (nine persons) (14) | | 2,038,659 |
| | 3.21 | % |
BlackRock, Inc.(2) | | | 6,563,054 | | | 6.2% |
| | | | | | |
Directors and Named Executive Officer(3)
| | | | | | |
Raj Mehra, Ph.D.(4) | | | 4,868,677 | | | 4.5% |
Michael Golembiewski(5) | | | 392,617 | | | * |
Daniel J. O’Connor, J.D., Director(6) | | | 83,666 | | | * |
Brian Lian, Ph.D., Director(6) | | | 83,666 | | | * |
Richard W. Pascoe, Director(7) | | | 78,737 | | | * |
Margaret Dalesandro, Ph.D., Director(6) | | | 11,666 | | | * |
All current executive officers and directors as a group (six persons)(8) | | | 5,519,029 | | | 5.1% |
|
*
| |
* | LessDenotes less than one percent. |
(1)
| Percentage ownership is calculated based on a total of 105,590,773 shares of Common Stock issued and outstanding as of March 25, 2022. |
(2)
| BlackRock, Inc. (“BlackRock”) filed a Schedule 13G on February 4, 2022, reporting that it had sole voting power with respect to 6,416,023 shares, sole dispositive power with respect to 6,563,054 shares and beneficial ownership of an aggregate of 6,563,054 shares in its capacity as a parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G) under the Exchange Act. BlackRock’s address is 55 East 52nd Street, New York, New York 10055. |
(3)
| Unless otherwise indicated, the address for each of our executive officers and directors is c/o 11975 El Camino Real, Suite 300 San Diego, California, 92130.Park Avenue, 2nd Floor, New York, NY 10022. |
(4)
| |
(2) | Percentage ownership is calculated based on a total of 61,778,121Represents (i) 3,013,262 shares of Common Stock issuedheld directly by Dr. Mehra, and outstanding as of the Record Date. |
| |
(3) | Represents(ii) 1,855,415 shares of Common Stock beneficially owned by Sarissa Capital Management LP (“Sarissa Management”) at March 3, 2016, as indicated in the entity’s Schedule 13D/A filed with the SEC on March 7, 2016. The shares of Common Stock are owned by Sarissa Management, Alexander J. Denner, the Chief Investment Officer of Sarissa Management, Sarissa Capital Offshore Master Fund LP and Sarissa Capital Domestic Fund LP. Sarissa Management’s beneficial ownership includes warrants to purchase up to 6,724,525 shares.
|
| |
(4) | Represents shares of Common Stock beneficially owned by Aspire Capital Fund, LLC at February 13, 2015, as indicated in the entity’s Schedule 13G/A filed with the SEC on that date, plus 2,556,819 shares and 1,278,409 warrant shares delivered pursuant to a certain subscription agreement entered into by and between the Company and Aspire Capital Fund, LLC, dated January 12, 2016. Aspire’s beneficial ownership includes warrants to purchase up to 1,278,409 shares. |
| |
(5) | Includes 965,287 shares issuable upon exercise of stock options and 17,500 shares issuable upon exercise of warrantsthat are exercisable within 60 days of the Record Date.March 25, 2022. |
(5)
| |
(6) | Includes 148,666Represents (i) 78,487 shares of Common Stock held directly by Mr. Golembiewski, and (ii) 314,130 shares of Common Stock issuable upon exercise of stock options that are exercisable within 60 days of the Record Date and 64,356March 25, 2022. |
(6)
| Comprised solely of shares of Common Stock held jointly in a trust. |
| |
(7) | Includes 90,333 shares issuable upon exercise of stock options and 2,500that are exercisable within 60 days of March 25, 2022. |
(7)
| Represents (i) 5,180 shares of Common Stock held directly by Mr. Pascoe, (ii) 59 shares of Common Stock issuable upon exercise of warrants that are exercisable within 60 days of the Record Date. |
| |
(8) | Includes 107,000March 25, 2022, and (iii) 73,498 shares of Common Stock issuable upon exercise of stock options that are exercisable within 60 days of the Record Date.March 25, 2022. |
(8)
| |
(9) | Includes 106,250Comprised of shares issuable upon exercisebeneficially owned by each of stock options exercisable within 60 days of the Record Date.our directors and current executive officers. |
| |
(10) | Includes 87,502 shares issuable upon exercise of stock options exercisable within 60 days of the Record Date. |
| |
(11) | Includes 106,250 shares issuable upon exercise of stock options exercisable within 60 days of the Record Date and 24,850 shares of Common Stock held jointly in a trust. |
| |
(12) | Includes 99,333 shares issuable upon exercise of stock options exercisable within 60 days of the Record Date. |
| |
(13) | Includes 70,520 shares issuable upon exercise of stock options exercisable within 60 days of the Record Date. |
| |
(14) | Includes 1,781,141 shares issuable upon exercise of stock options and 20,000 shares issuable upon exercise of warrants exercisable within 60 days of the Record Date. |
TABLE OF CONTENTS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our executive officers, directors and persons who beneficially own greater than 10% of a registered class of its equity securities to file certain reports with the SEC with respect to ownership and changes in ownership of the Common Stock and our other equity securities.
To the Company’s knowledge, based solely on our review of the copies of such reports filed with the SEC, our officers, directors and greater than 10% stockholders timely complied with these Section 16(a) filing requirements during the fiscal year ended December 31, 2015, except that each of our non-employee directors filed one late Form 4 on January 26, 2015, in connection with the annual stock option grants as of the first trading day of 2015.
STOCKHOLDER PROPOSALS
Stockholder proposals will be considered for inclusion in the Proxy Statement for the 20172023 annual meeting in accordance with Rule 14a-8 under the Exchange Act, if they are received by theour Company’s Secretary, on or before December 9, 2016.16, 2022.
Stockholders who intend to present a proposal or director nominee at the 20172023 annual meeting of stockholders without inclusion of such proposal in our proxy materials for the 20172023 annual meeting are required to provide notice of such proposal within the time periods and in the manner set forth in our bylawsBylaws and the Charter of the Corporate Governance/Nominating Committee, a copy of which is available on our corporate website at www.apricusbio.comwww.seelostherapeutics.com/corporate-governance/. Proposals of business to be conducted at the 20172023 annual meeting other than nominations for election of directors, must be submitted between February 19, 20172023 and March 21, 2017,2023, which are 90 and 60 days prior to the first anniversary of the 20162022 annual meeting, provided, however, that in the event that the date of the pending annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, such submission must be delivered not earlier than the 90th day prior to such pending annual meeting and not later than the close of business on the later of the 60th day prior to such pending annual meeting or the 10th day following the day on which a public announcement of the date of such annual meeting is first made. Director nominees must be submitted between December 9, 2016 and January 8, 2017, which are 120 and 90 days prior to the anniversary of the mailing date of the proxy materials for the 2016 Annual Meeting, provided that if the date of the 2017 annual meeting is advanced by more than 30 days or delayed by more than 60 days, notice must be delivered within 10 days after announcement of the 2017 annual meeting date is first made. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.
Proposals and notices of intention to present proposals at the 20172023 annual meeting should be addressed to the Secretary of Apricus Biosciences,Seelos Therapeutics, Inc., 11975 El Camino Real, Suite 300 San Diego, California, 92130.Park Avenue, 2nd Floor, New York, NY 10022.
DELIVERY OF PROXY MATERIALS
In some cases, only one copy of this Proxy Statement or our 20162021 Annual Report is being delivered to multiple stockholders sharing an address unless we have received contrary instructions from one or more of the stockholders. We will deliver promptly, upon written or oral request, a separate copy of this Proxy Statement or such Annual Report to a stockholder at a shared address to which a single copy of the document was delivered. Stockholders sharing an address who are receiving multiple copies of proxy statements or annual reports may also request delivery of a single copy. To request separate or multiple delivery of these materials now or in the future, a stockholder may submit a written request to the Secretary of Apricus Biosciences,Seelos Therapeutics, Inc., 11975 El Camino Real, Suite 300 San Diego, California, 92130Park Avenue, 2nd Floor, New York, New York 10022 or an oral request at (858) 222-8041.call (646) 293-2100. Please make your request no later than May 1, 20162022 to facilitate timely delivery.